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Chapter 3: Problem 12

Rent control will probably be unnecessary at a time of A. high unemployment. B. an oversupply of renters. C. an oversupply of rental housing. D. declining stock prices. E. high single-unit home construction.

Short Answer

Expert verified
The correct answer is C. An oversupply of rental housing.

Step by step solution

01

Identify situations leading to the necessity for rent control

Rent control becomes necessary when the demand for rental housing exceeds the supply. This could be due to a variety of factors, such as a growing population, loss of housing due to natural disasters, or economic factors that make home ownership less accessible. In these situations, landlords can potentially charge exorbitant rents due to the high demand, thus the government steps in with rent control policies to protect renters.
02

Analyze the provided options

We need to look for a situation where the supply of rental housing exceeds the demand. High unemployment (Option A), an oversupply of renters (Option B), declining stock prices (Option D), and high single-unit home construction (Option E) are all situations that could increase the demand for rental housing or decrease the supply, potentially leading to a necessity for rent control.
03

Select the correct option

An oversupply of rental housing (Option C) means that there are more rental units available than there are renters. This would lead to competition among landlords to secure tenants, potentially driving down rental prices. Therefore, rent control would most likely be unnecessary in this situation.

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Most popular questions from this chapter

9\. A. The dentist is across from the optometrist. B. The surgeon sits across from the general practitioner. C. Doug is the optometrist. D. The surgeon sits across from a man. E. Carla is the dentist.

The purpose of most rent-control ordinances is to A. encourage housing construction. B. prevent unfair rent increases. C. encourage home buying rather than renting. D. prevent landlord profits. E. terminate a shortage of rental housing.

Opponents of rent control are likely to use all of the following arguments EXCEPT: A. Rent control is an interference in the market. B. Decontrol is usually followed by much higher rents. C. Rent control depresses the construction of new rental housing. D. In cities with little available building land, rent control minimizes the loss of consumer's surplus. E. Rent control deprives an owner of the free use of his or her property.

Supporters of the case for rent control are likely to use all of the following arguments EXCEPT: A. Rent control encourages the rate of conversion of rental property to condominiums. B. Many landlords are greedy for high profits. C. The burden of large rent increases falls most heavily on those with low incomes. D. Without controls, a tenant who cannot pay increased rent must pay moving costs. E. Rents are more likely to rise when rental properties are in short supply and renters are abundant.
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