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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.