New York City Rent Control Case Study

1. What do you think New York City officials hoped would happen when they first imposed rent controls? New York City officials hoped that by conducing the first imposed rent controls in order to prevent higher rent on housing. New York City began rent control after World War 1. The reason for this rent control was to keep rents from rising from the equilibrium levels since the quantity demanded at the ceiling at that time, exceeded the quantity supplied.
2. Why did real estate developers build fewer apartments in rent controlled areas?
The reason why real estate developers built less apartments in rent controlled area for the reason of rent controls. Builders in New York City had completed nearly thirty thousand housing units a year and ninety housing units in the peak year. As a result of the rent controls, builders stopped building homes which dropped construction down.
3. Why did rents rise in the non-controlled areas?
The reason why rent rose in the non-controlled area was due to excess demand for housing in the rent controlled sector which spilled into the free market sector. The demand for non-controlled areas was high and it raised rents in the free market sector which made apartments more attractive to live in.

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In my opinion, the rich tenants can afford to pay more on rent, while the poor cannot. Another suggestion New York City can do to correct this unfairness is by removing rent controls because rent control promotes housing discrimination. Rent controls forces housing providers to look to income and credit, choosing among competing consumers. Basically, being bias in the section process against individuals with lower incomes. In order to balance needs of current tenants, future tenants, and landlords is increase housing supply. By the supply of affordable housing to needy