Rent controls place price ceilings on rents at levels below market equilibrium rental rates for the stated purpose of making housing more affordable for low-income families. Using demand and supply analysis, answer the following questions:
- How does imposing rent controls affect the number of housing units available to low-income families? Illustrate your response using graphs.
- Under rent controls, can all low-income families get rent-controlled housing?
- Who gains from rent controls? Who loses?
- What alternative policy would you propose to make plenty of housing available to low-income families that would not be subject to the problems of rent controls? Illustrate the effects on supply and demand from part 1.