6

Direct Effects of
Undermaintenance and
Deterioration

C. Peter Rydell

Kevin Neels

Chapter 2 concluded on a note of concern regarding the reluctance of investors to enter the rental housing industry in the face of rent control. Considering the alternatives, such reluctance would be rational in financial terms, and in the long run could threaten to make worse the very housing shortage that gave rise to controls in the first place. This chapter deals with the response of owners and managers who are already in the rental housing business at the time rent controls are introduced. As in the case of cautious investors, current owners can be expected to compensate for real or perceived financial losses. Reacting to revenue reductions by reducing maintenance expenditures, their behavior would gradually eliminate the initial price reduction benefits. Insofar as this behavior holds, rent control may be found to have transferred the social benefits associated with housing to some households in the short run, at the expense of other households in the long run. Of interest in this regard is the analytical challenge that faces anyone who chooses to investigate such an exchange of benefits.

Rent control laws differ greatly, but they have the common feature that they limit the amount by which rents can increase. As a consequence, rents of controlled dwellings are less than they would be in the absence of rent control. The difference between the market rent caused by rent control and the anticipated rent without rent control is defined as rent reduction.

Landlords who elect to stay in business can respond to the rent reduction in two ways. First, they can operate their properties the same as they would without controls. In that case, tenants will

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited page

Bookmark this page
The Rent Control Debate
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen
/ 148

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?