Part 12/15:
- They split supply and demand away from equilibrium, leading to shortages and increased prices on the free market.
The Consequences of Rent Freezing Policies
He illustrates this with a hypothetical example: a building with 30 units, where 10 are rent-stabilized, and the operating costs stay constant. To cover expenses, landlords raise rents on the remaining units, which leads to higher rents overall and less incentive to rent out units. This results in a shortage of available units and eventual decay of housing quality.