Chapter 3 - Assignment 1: Rent Control

1. What was the original intent behind rent control?
2. Why did voters in Boston decide to eliminate rent control?
3. The author argues that rents are higher in cities in which rent control exists than in cities without rent control. Does this necessarily suggest that rent control raises the rental rate for housing? Is there another possible interpretation?
4. Use a diagram containing demand and supply curves to illustrate the effects of rent control on the quantity of housing demanded and supplied.
5. Briefly describe the "shadow market" for housing existing in New York City. How might the existence of this market account for the large difference between median gross rent and median advertised rent (captured in Figure 2)?