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What Factors Affect Rent Control?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 24 November 2016
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Rent control is a type of regulation process that places a maximum price on what landlords can charge tenants in order to rent or lease rental properties. Typically, the goal of this type of regulation is to ensure that there is housing available within a jurisdiction that is affordable, based on the average standard of living within that area. There are a number of factors that can affect rent control and its effectiveness, including the population of the jurisdiction, the economic landscape of the area, average wages and salary for people living in the city or town, and even the demand for rental property.

One of the key factors that will affect rent control rates has to do with the average cost of living in the area. Typically, lawmakers and regulatory agencies will set the maximum amount of rental rates for qualifying properties at a level that is considered within reach of the population demographic most likely to be interested in those apartments and other rental properties. This is done as a means of making sure people with limited budgets can afford a decent place to live, without an inordinate amount of their income going to pay the rent each month.

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Consumer demographics will also play a role in determining the pricing for rent control. Municipalities with larger segments of retirees living on fixed incomes or areas in which most job opportunities pay little more than minimum wage will often seek to set the price controls at levels that are within the economic capability of those population segments. Rent control laws based on demographics can not only help tenants find and secure affordable housing, but also aid landlords in securing tenants who remain with them for a number of years.

Another important factor that will exert some influence on rent control is the amount that people are willing to pay for the rental properties. The goal is to make the property affordable while still allowing the owner to generate enough revenue to make a profit and provide adequate upkeep and maintenance on the property. With this in mind, jurisdictions will set the price controls at levels that are considered equitable, since setting them any higher would not increase demand or aid tenants in finding something they can afford.

Many jurisdictions seek to implement rent control measures designed to prevent individuals from taking advantage of the price controls and undermining the goal of providing affordable housing. This means that some cities and towns will structure the rent control regulations to minimize subletting on rent controlled property that involves charging exorbitant amounts of rent while only paying the owner the much lower amount allowed under the terms of the prince control measures. Jurisdictions will also seek to monitor price control measures to determine if they are in fact promoting fair pricing in the marketplace and making it easier for people to secure affordable housing over the long term.

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