Question

Please Help on a research topic..

What is a specific issue and who/what group is currently negatively affected by that issue? As a follow-on that will be addressed through your research, who/or what group do you plan to solve that problem for?

Example: The issue could be the minimum wage rate and people who work in fast food at that rate are negatively affected because they cannot earn a living wage. You could attempt to solve this issue for the workers by raising the minimum wage, or you could attempt to solve this issue for the stockholders by installing ordering kiosks in all the fast food restaurants and getting rid of some workers. This issue has already been addressed in the marketplace so it is not open as a topic.

Answer 1

Issue: Rent control

Rent controls are ceilings imposed on the maximum rents a property owner can charge their tenants. This is done in order to prevent tenants from getting exploited by the hands of the landlords who sometimes tend to charge very high rents from their tenants.

Putting a ceiling on the maximum rent that can be charged (which is set below the free market rental rate) leads to a shortage of housing units at that price, as at that price quantity of housing units demanded exceeds the quantity supplied. This shortage of housing units gives way to the creation of the black market where the landlords charge excessively high rents from the tenants in the name of shortage and make use of their desperation to get a home.

Thus, ultimately it is the tenant which is negatively affected by the rent control because they either have to face shortage of houses or end up paying very high rents.

The best way to handle this problem is to provide subsidies to tenants for housing accommodation instead of asking the landlords to charge a lower price.