Slide Set 3 Rent Ceilings.pptx

Slide Set 3 Rent Ceilings.pptx - Rent Ceilings Housing...

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Rent Ceilings
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Housing Markets and Rent Ceilings Are there enough apartments on or close to campus for Temple students? Are the rents too high? Should there be rent ceilings for apartments rented to students? Why or why not?
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A Housing Market with a Rent Ceiling A price ceiling or price cap is a regulation that makes it illegal to charge a price higher than a specified level. When a price ceiling is applied to a housing market it is called a rent ceiling . If the rent ceiling is set above the equilibrium rent, it has no effect. The market works as if there were no ceiling. But a rent ceiling set below the equilibrium rent creates problems
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$700 1000 800 Rent per month Q (thousands) S D $500 1200
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Housing Markets and Rent Ceilings Effects of rent ceilings Depends on the neighborhood Consider a high-income location vs. a low-income location Landlords do less routine maintenance Properties deteriorate more rapidly Units that are in good repair are a real bargain
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