Boston Price Floor

A price ceiling is a government-levied maximum rate for a product or good. When a price ceiling inflicted by the government is more than retail equilibrium price, the price ceiling has no effect on the market or economy. This is because it does not obstruct supply, nor does it boost the demand. A different effect transpires if the government imposes a price ceiling below the market’s equilibrium rate. The suppliers will no longer be capable of charging the price that the market mandates, but they are required to meet the maximum price determined by the government’s price ceiling. When the demand rises beyond the capability to supply, shortages ensue. This leads to rationing of the product, causing some consumers to experience longer lines to obtain the product. In a worse case, there would be no products available for the consumer to buy.

In short, lack of motivation in exchange for more red tape causes investors and landlords to move towards more profitable options. This movement of money and resources tends to negatively impact people trying to find a place to live, most notably the poor. The National Multi Housing Council (NMHC) states that prospective customers must pay finder fees to find a rental property due to a presumably growing scarcity of available housing. As if this were not bad enough, in some communities rental properties are handed down to friends and family, so they never quite leave the market. In order to obtain housing, new consumers are forced to pay “key money” and other fees. These costs tend to impact young, single, and poor families the most.

Sports teams are switching to a variable-pricing strategy for tickets so that they can get a higher profit on games with record attendance numbers. They feel the need to do so because the marginal costs, such as construction payment and players’ salaries, did not equal to the marginal revenue, since attendance was severely dropping. To pay for the marginal cost, the sports team needed to capitalize on things that they were sure of, like increasing attendances to games between major sporting rivals.

Rent control first appeared in the United States in the early 1900s as a way of dealing with exorbitant rent prices brought about by wartime housing emergencies and tight housing markets. During this time, rent control was handled by the federal government. In the late 1940’s, the federal rent control system was gradually scaled back

In 2011, the Los Angeles Human Right to Housing Collective joined together with citywide residents to protest unfair housing practices, and increasing rents at Los Angeles City Hall. Over the past four years, Los Angeles residents have seen rapid increases in rent, which is leading to more and more people moving out of L.A. in the hopes of finding more affordable living arrangements. The three percent rental increases that Los Angeles residents are accustomed to have been climbing this past year, and in 2016 many Angelenos could be seeing a four or maybe even five percent cost of living increase. Studies from the U.S. Census will show that Los Angeles renters occupy not even 50 percent of Los Angeles county housing units. In comparison to the percentage LA renters are taking home per paycheck, it is now becoming more affordable to buy property in Los Angeles, rather than rent.

This is a result of a demand shift to the left related to a lack of available tenants for the apartments. The property management company has to decrease rental rates allowing the quantity supplied to decrease as well (University of Phoenix, 2012), creating a downward swing in the supply curve. The price of rentals decreased to create less quantity that is available for rent creating equilibrium and a decrease in surplus. This is a difficult decision to lower price significantly but will continue to create revenue for the property management company while decreasing supply of vacancy.

However, when the equilibrium price is beyond the expectation of a fair market value, for reasons of political or social concerns governments will intervene in the market and establish limits on such things as wages, apartment rents, electricity, or agricultural commodities. Government uses price ceilings and price floors to keep prices below or above market equilibrium. (Stone, 2012, page 68)

For all of these reasons, I believe that rent control should be abandoned in New

As the leasing amount and house rent goes up while there is stagnation in wages and salaries, affording the monthly rent becomes difficult leading to gentrification in the city.

One effect of gentrification is the increase of house pricing. However, it is not the root cause of city's affordable housing problem. Homeowners can actually profit from rising property values. Brett Talavera, a junior at Cal Poly Pomona, did see an increase in renting rates.

There are several forms of rent control, however they all take the shape of legally imposed below-market rates for rental housing. Most rental ceilings came into being at the end of World War II (1939-1945) to help mitigate expected disruptions in the rental housing market due to the demand shock of veterans returning from overseas service in the war. (Rent Controls, 2008) Rent control can still be seen in larger municipalities, such as New York City, to make housing more affordable for low-income tenants. In the short run, the supply for apartments is inelastic and the quantity of buildings already supplied is constant. Rent control, in the long run, reduces the availability of apartments subsequently causing suppliers not to build more apartments due to not being able to make a profit from their rentals. Shortages of rental homes can lead landlords to discriminate against renters and even demand for renters to pay extra monthly payments under the table. Rent control deters new investments that would have gone to rental housing and has validated that it leads to housing deterioration, fewer repairs, and less maintenance. For In a 1990 poll of 464 economists published in the May 1992 issue of the American Economic Review, 93 percent of U.S. respondents agreed, either completely or with provisos, that “a ceiling on rents reduces the quantity and quality of housing

Two economic factors affect supply in a stable housing market, price of related goods or similar houses, and the price of the good, best represented by style or size in the case of the housing market. The affluence of a community typically determines how much homes sell for in those communities, and therefore communities where a lot of people want to live become areas where average home prices are high. (Kumar, 1) There is little space in these affluent communities, and therefore little supply. A good example is New York City, where no homes are available, only apartment buildings, and very few apartments are actively exchanged each year.

The author focuses on rising housing costs. Here is where myself and the author begin to part. Unlike the author I don’t believe the answer is this simple. Although the rates as he describes are rising faster than any other market or minimum wage. One most always look introspectively at a cause first before looking externally. The problem with blanket statement like: the singular reason is rising costs, is that it holds blameless those who choose not to better themselves. One of the major problems I see in the world is a sense of undeserved entitlement. If you can’t pay rent in downtown of city my solution is to look for housing elsewhere. I have moved across the country from my family for years and now am the closest I have been in over 4 years still 5 hours away. Growing up my housing situation has been just as unstable as many described in this piece. It was a sense of pride and entitlement that put me in that situation not rising costs. After leaving home and moving to California I found myself struggling one day to make rent, I was paying $1,800 a month just for rent let alone a car payment and utilities. Although this was unexpected and due to something I could not control I had to remedy the situation I cut back on unnecessary expenses, moved when my lease finished and now I refuse to ever be in that situation again. I am now here at UW-Madison pursuing an education that will allow me to be financially stable for the rest of my life. If I can make it with all of the setbacks I have had in my life, why shouldn’t we encourage others to do the same? Minimum wage although it should cover expenses for housing we all know doesn’t and we adjust our sights to accommodate for that. We get an education and better ourselves and those around us. This allows us the lives we want to live. In closing I hold the renters responsible

Macroeconomics showed how the increase in jobs and population affects the increase or decrease on the apartments. Equilibrium rental rate is higher than before, and the number of apartments demanded and supplied has increase

People who have low income are all willing to pay their house rent at a reasonable and affordable price, in order to accommodate public’s wishes, the New York City regulated the Rent Control law in 1947. The rent control is originally designed to against the potential increase of house rent, and also protect citizens’ personal property. This is an empirical example of the implement of the price ceiling, which is the maximum price set by the government, any price beyond this price would be considered illegal. (Microeconomics) But after the rent control was enforced, does it really help the public as it was supposed to do? The answer can be either yes or no.