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(Case and Fair, modified) One way the government increases the amount of housing available to low-income households is by providing subsidies to developers who build
(Case and Fair, modified) One way the government increases the amount of housing available to low-income households is by providing subsidies to developers who build this housing (this is called a "Low Income Housing Tax Credit." An alternative is to provide households with vouchers that can be used like cash to rent housing (called "Housing Choice Vouchers"). A) Illustrate the effect of each policy on the price and quantity of housing in the short run, using (separate) supply/demand curves. B) In which case are private landlords better off? In which case are they worse off? C) In the long run private landlords will enter profitable markets. Under which alternative (vouchers, government builds public housing) is this more likely to occur? On a separate supply/demand graph, illustrate the effect of entry on the price and quantity of rental housing in the long run
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