This application of the B/T model indicates that, in the short run, rent control may be a rational choice for consumers and that, as a related point, the likelihood of finding rent control in a jurisdiction increases with the size of the rental sector of the housing market. However, in the long run, the community that chooses rent control will have a smaller supply of housing than it would have had [Marks, forthcoming], and it will have effected a sub-optimal allocation of resources; moreover, aside from the initial capital loss to investors, the welfare loss from the inefficiency will be borne by consumers, particularly permanent residents of the jurisdiction. It is likely that support for control will weaken over time as the long-run effects begin to materialize. This weakening would probably occur more rapidly as the proportion of non-transient renters in a jurisdiction increases. However, a complete consideration of this issue remains as a topic for further research.
KeywordsInternational Economic Public Finance Public Choice Housing Market Rational Choice
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