A
Alpha9
Member
"The imposition of legislation that forbids landlords to increase rents will...
D lead to lower rents and fewer people living in rented houses."
Are you sure?
Imposing a ban on rent increases is not the same as a rent cap (which would, I agree, force landlords charging over the cap to (reduce rents or) leave the market, so leading to lower rents and fewer tenants). If a ban on rent increases were imposed, no landlord would reduce their rent: surely only those charging too low a rent (to cover future cost increases) will gradually leave the market, leaving those making higher profits.
I think this would cause the supply curve to shift left: fewer landlords at any given price. And, over time, this shift left would continue.
Hence fewer tenants, but higher rents.
Am I missing something?
D lead to lower rents and fewer people living in rented houses."
Are you sure?
Imposing a ban on rent increases is not the same as a rent cap (which would, I agree, force landlords charging over the cap to (reduce rents or) leave the market, so leading to lower rents and fewer tenants). If a ban on rent increases were imposed, no landlord would reduce their rent: surely only those charging too low a rent (to cover future cost increases) will gradually leave the market, leaving those making higher profits.
I think this would cause the supply curve to shift left: fewer landlords at any given price. And, over time, this shift left would continue.
Hence fewer tenants, but higher rents.
Am I missing something?