While going through my mail this weekend, I saw that we had received a flyer from the City of Mountain View to support Measure D. Measure D is to be placed on the March ballot to further rent control regulations. The measure would limit rent increases to 4% per year, make apartments safer and energy-efficient, protect taxpayers, and give the council a chance to expand renter protections to mobile home residents. Although the measure may be beneficial to renters, it actually creates some problems in the economy.
By trying to keep the price down with a price ceiling (limit on how high rent can be), the council would be setting the price below the equilibrium. This means it will be lower than the place where the quantity demanded (of houses by renters) equals quantity supplied (available houses to be rented), thus creating a housing shortage. In terms of consumer (buyer’s maximum price - the price paid) and producer surplus (price - sellers minimum), setting a limit would not allow both to be maximized. When the market is not efficient (maximized) it creates a deadweight loss.
Rent control may be beneficial to certain people, but may not be the best move in economic terms. When this dilemma occurs, what is a possible solution? Who should be put first?
https://sanfrancisco.cbslocal.com/2020/02/11/mountain-view-rent-control-measure-d-stirs-heated-debate/
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