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Should The Government Set The Price Of Rent

How do I know the government set price of a property?

I’m not sure what country you are asking about. In the USA the government does not set a price on privately owned property. The asking price, if it is for sale, is set by the seller, and the sale price is whatever price is agreed upon between the buyer and seller.The government, at the county level, does set a valuation for property tax purposes. This valuation is bases upon recent sales data for similar homes in close proximity. These valuations are really not a true reflection of what the sale price might be.The only times that a government might set a price would be if they were selling off government owned property that they no longer needed or if they were claiming private property for some public use under eminent domain. Even in those cases the government would probably hire a professional appraiser to set a sale price.

If the government imposes rent control?

E. None of the above

Economics Micro Question: If the government sets out to help low-income people by establishing a maximum...?

If the government sets out to help low-income people by establishing a maximum amount that can be paid for rent:
Answer
A.
the quality of rental units will be inefficiently high.
B.
in the long run more rental units will appear.
C.
a price floor has been set and a shortage of rental units may occur.
D.
a price ceiling has been set and a shortage of rental units may occur.

Why don't governments put a price ceiling on goods instead of a minimum wage?

Price ceilings and floors are used for goods too. And as some other posters have already mentioned, rent control is one example. With a price ceiling, the government is attempting to keep prices lower by limiting the maximum amount businesses can charge. So it’s designed to protect consumers from being gouged. And as some have pointed out, there are consequences of establishing a price ceiling. Rent control is an example of a price ceiling. The goal being to prevent rents from being “too high” and renters being gouged. So you’re setting the price below equilibrium because the market failure has it too high.But with regards to minimum wage, that’s not a price ceiling, but rather a price floor. So here, government is looking to protect workers from being taken advantage of by being underpaid. And setting minimum price higher because it’s too low. So it’s the exact opposite from the price ceiling set with rent control. Government is setting the price above equilibrium because the market failure has undervalued it, making the price too low.The graphic below that I put together will show you the difference. And the consequences from setting a price floor or price ceiling.So with rent control, you’ll have demand exceeding supply. That means more renters want the lower-priced units but those who rent to others not having as many units available due to the lower price. Thus, there will be a shortage of rental units.And with minimum wage, you’ll have supply exceeding demand. That means more workers wanting the higher pay but firms less willing to have as many workers at that level. So it’ll be excess supply, meaning more workers than firms are willing to hire.FYI, it’s not unusual for students and others to mix up price floors and ceilings. Something I’ve mentioned and explained why in my economics classes.

Is raising the price of rent ethical?

It’s not only ethical, it’s essential.A landlord decides how much income he needs from a house. Then he figures up all the monthly expenses, taxes, insurance, expected maintenance, lawn care, etc.So he takes his expenses, adds his profit and arrives at the rent.His expenses don’t remain constant, but if he uses a long-term lease, the amount of rent coming in does remain constant.That is, until the lease expires or is renewed.Rent to a new tenant OR renewal to the same tenant will reflect that unless there is some special circumstance.Taxes and insurance typically go up every year, and that doesn’t necessarily mean the tax rate which always makes the TV news. A quieter, less regulated way to do it is to raise assessments.Tax rate where I live is set by voters, and hasn’t changed in six or seven years. However, that house has been assessed several times.Nothing about that house has changed… no room additions, patios, driveways, etc. but the county said it was worth $92k in 2015 and that it’s worth $122k today.And aside from that, there’s a thing called “Market Value”.If the house could be rented for $1300/mth, but the landlord has been renting for $1000/mth, is it ethical to expect him to keep renting for $1000?Actually, some landlords will deliberately rent below market value to the right tenant.If they get someone in there who has never given them a problem of any kind (including too many late rents), and maintains the property the way the landlord would if they were living there themselves, they will often go to some pains to keep that tenant.That may include leaving the rent at $1000 when they know it would take about a week to find someone else who would pay the $1300 they could be getting. instead.

Rent controls set a price ceiling below the equilibrium price and therefore:?

quantity supplied exceeds the quantity demanded.

quantity demanded exceeds the quantity supplied.

a surplus of rental units will result.

poor people will obviously be helped.

Rent control: Good or bad?

I do not see rent control as good and I do not think government should set prices for property owners because:

-Rent control hurts people that have recently moved to a new town.
-Property owners will not construct property for normal individuals as the prices that they can set for property will be regulated.
- Due to rent control property owners construct apartments that are too expensive for government to limit the price on these apartments.
- Rent control is an unnatural way of lowering housing costs. The only way for housing costs to be natural is for the government to not get involved.
- Tenants with low incomes are unable to pay landlords and as a result they are kicked out which adds to the number of homeless and increases poverty.
- Rent control is not good for landlords and individuals with low incomes
Good:
-Rent control makes housing affordable for people who cannot pay high prices
- Controlling prices of housing ensures that landlords from being dishonest and charging absurdly high prices thus causing less available housing
-
In overall I think rent control brings more negatives than positives.

What do you think of rent control?

What is a price ceiling?

A Price Ceiling is a government-imposed limit on how high a price can be charged on a product. For a price ceiling to be effective, it must differ from the free market price. In the graph at right, the supply and demand curves intersect to determine the free-market quantity and price.

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