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Rent controls force landlords to price apartments below the equilibrium price level. An immediate effect is a shortage (excess demand) of apartments, because the quantity of apartments demanded is greater than the quantity supplied at the regulated price. When cities prevent landlords from charging market rents, which of the following are common long-run outcomes?A) The future supply of rental housing units increases.
B) Efficient use of housing space results.
C) Nonprice methods of rationing emerge.
D) The quantity of available rental housing units falls.

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Answer:

C) Nonprice methods of rationing emerge.

D) The quantity of available rental housing units falls.

Explanation:

First of all, the major negative effect of rent control is that the quality of the rental units will decrease. Since suppliers can only charge a given rent, they will decrease their investment per unit offered for rent.

Higher quality rental units will be rationed, since the demand for them will be much larger than the quantity offered. Tenants will have to "stand in line" waiting for those high quality units to be available for rent (queues will form).

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