#7. The Rent Is Too Damn Low!
Rent control may sound like a good idea, but it sure isn’t for some people. People have been hornswoggled by politicians into believing that government caps on apartment rental rates help poor tenants, but let’s just see what happens with rent control when it’s instituted.
The first inevitable consequence is that there’s a housing shortage. When government intervenes in the marketplace, the tenants will begin renting more apartments. Prices are signals, and when the free market sets the prices for an apartment, the demand will rise to meet the supplies. But when the supply prices are artificially lowered by government, people will naturally want to rent more units, decreasing the available supply.
Landlords are then incentivized to rent out fewer units. After all, why rent out more units if you’re going to lose out on money?
“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from regard to their own interest. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow citizens.” -Adam Smith