Question

Unless they.are used as strictly temporary measures, rent-control ordinances (municipal regulations placing limits on rent increase) have several negative effects for renters. One of these is that the controls will bring about a shortage of rental units. This disadvantage for renters occurs over the long run, but the advantage-smaller rent increases - occurs immediately. In many municipalities, especially in all those where tenants of rent-control units have a secure hold on political power and can get rent-control ordinances enacted or repealed, it is invariably the desire for short-term gain that guides those tenants in the exercise of that power. If the statements above are true, which one of the following can be properly inferred from them ?

• A. It is impossible for landlords to raise rents when rent controls are in effect.
• B. In many municipalities, rent-control ordinances are repealed as soon as shortages of rental units arise.
• C. In many municipalities there is now, or eventually wiII be, a shortage of rental units.
• D. In the long term, a shortage of rental units will raise rents substantially.

Answer 1

The correct option is C In many municipalities there is now, or eventually wiII be, a shortage of rental units.

Option (c) is correct as there indeed will eventually be a shortage of rental units in many municipalities, which will happen due to imposition of rent controls.