Eric Shannon 2/1/2017
Microeconomics Essay 1
Rent Control & Minimum Wage
The reason that rent control was established was to act as a buffer to help keep the
negotiation power between landlords and their residents fair. Controls on the price of rents is
used in residential housing, agricultural tenancies, and business tenancies and it functions as a
price ceiling making it so the landlord cannot charge too much for the housing. Some of the
negative effects of rent control can be things like: The inhibition to start construction, the
deterioration of existing housing, reduced property tax, and reduced customer mobility. Rent
control inhibits construction because it allows the houses to drop below the market price,
which then in turn reduces the profitability of rental housing and then effectively lowers the
