Question

If a city government makes it illegal to raise the rent on apartments, will that make sure that there are enough affordable rental units?
A. Yes, people will move to other cities, freeing up units of others.
B. Yes, people will buy private homes, freeing up units of others.
C. Yes, landlords will buy more units.
D. No, lower rents will actually make the problem of not having enough affordable rental units worse.

Answer 1

The correct answer is D: no.

if it is illegal to raise the rent, that means that no or only few new houses will be built, as the investors will not feel that making new houses will be profitable.( if they can't raise rent, they might actually faces loses if the costs of maintenance go up)
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