Module 6: Rent Controls and Housing Subsidies

Reading : Chapter 11: Bankrupt Landlords, from Sea to Shining Sea (19th edition: Chapter 11, 20th edition: Chapter 10)

THIS IS LINK OF PODCASTS :

Section 8 Vouchers Help the Poor - But Only if Housing is Available: Link and Transcript

http://www.npr.org/2017/05/10/527660512/section-8-vouchers-help-the-poor-but-only-if-housing-is-available

Podcast Episode #259 Real Estate Investing News: Rent Control Wars in California

https://www.realwealthnetwork.com/learn/news/rent-control-wars-california/

Answer the following questions based on the Reading: Bankrupt Landlords, from Sea to Shining Sea and the housing subsidies podcasts in Module 6:

1. Consider an apartment would rent for $2000 but the government restricts the rent to $700. What are the three adverse effects of implementing rent controls? Use a supply and demand framework to explain these impacts in the market.
2. Using the numerical example in question 1, explain where the size of the monetary payments from subsidies or "key-money payments" made to landlords come from.
3. If the government uses a subsidy to pay the difference between the lower rent price and the equilibrium price, such as with section 8 housing, what problem of rent control is avoided? Which problem still persists and why?
4. Consider using tax breaks as a subsidy to build new public housing units. What impactshould this have in the market? Explain using a supply and demand framework.

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