Question

When cities pass laws limiting the rent landlords can charge on apartments, the laws usually apply to existing buildings and exempt any buildings not yet built. Advocates of rent control argue that this exemption ensures that rent control does not discourage the construction of new housing. Evaluate this argument in light of the time-inconsistency problem.

Answer 1

This argument can easily be linked with the famed time inconsistency problem where the main argument at present is that rent control does not discourage the construction of new housing. This can get to encourage more and more construction to take place in the city and keeping the ecological factors in view, this might not be a good sign at a point of time in the future where impositions have to be given on constructions and at that time the lawyers argue that rent control on constructions can be a rational decision which is not the case previously. In this way, it can be related to  time-inconsistency problem on the whole.