In cities with rent control, why doesn’t it work overall to actually lower the price of housing?
In: Economics
Why would you build rental properties in a rent controlled area? You are signing up to lose money. So, what you do is build condos to sell at huge margins. That way you get all your money upfront. Obviously, this creates a shortage of rental properties. It might sound good in the short term, but in the long run it is a terrible idea. It will leave the area with few options for the average renter.
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