Aspects of Price for Rental Housing

Suppose that college students in your town persuaded the town council to enact a law setting the maximum price for rental housing at $400 per month. Will this help or hurt college students who rent housing?

In your answer, address how this price ceiling will affect:

  • the quality of rental housing;
  • the amount of rental housing available;
  • the incentive of landlords to maintain their properties;
  • the amount of racial, gender, and other types of discrimination in the local rental housing market;
  • the ease with which students will be able to find housing;
  • whether a black housing market would develop.

What is the difference between a price ceiling and a price floor? If a price ceiling for good is set below the market equilibrium, what will happen to the quality and future availability of the good? Explain.