Question

Many cities are implementing rent control due to rapidly escalating rents, forcing long term renters out of their housing. Using supply and demand analysis, explain what happens to the market for rental housing in these cities. What will happen to the available housing in these cities versus the demand for housing? Who gains and who loses?

What other options are available to solve housing shortages? How might they affect the available supply of rental housing?

Answer 1

Due to the continuous increase in the population in the cities, the problems with the housing rentals keep on increasing where with the increase in the demand, the cost of the rentals keep on increasing and with that the supply remains constant. In this process, the rent keeps on increasing and ultimately the owners gain and tenants lose on the whole. The setup of housing colonies along with the company establishment at a particular company can get to solve the problems of housing shortages to a greater extent on the whole. This can get to normal the supply of housing and this can eventually solve the problem on the whole.