Ethics, according to the Oxford dictionary is “a set of moral principles that govern a person’s behavior or the conducting of an activity”. Ethics consists of doing what the law requires, following the standards of behavior our society accepts, and also has to do with what you believe is right or wrong. Rent control is not unethical, but is very controversial. If on one hand it is a good thing because it prevent landlord from being unethical charging the tenants unfair rent price, on the other hand it is unfair for the landlords to be imposed a rental price below market price which he/she is morally entitle to. Rent control can create several problems not only for the landlord but for the economy as well.
Rent control is a price ceiling imposed by the government. Which means is a law that places a maximum price a landlord can charge a tenant. This rent control affects the equilibrium of the market, making a change on supply and demand because if the price is set below the market price, the quantity demanded will exceed supply; as a result, people who want to rent will have to lean to units that are not rent controlled which will have a higher price. In a normal competitive market, when the quantity demanded exceeds supply, the price increases to eliminate the problem of shortage. In this case of rent control, the price of rent can only be increased each year by a fraction of the inflation rate.
The main problem rent control can create to landlords is the case of the tenant do not move out because of the good rental price. That causes the landlords to lose money by not being able to increase the rental price of their units. Besides, the price of maintenance continues to increase, causing landlords to not earn any profit with their units, and the units goes from being an asset to become a liability for the owners.
The main problem a rent control can create to the economy is that reduces the incentive of people to invest on building/buying apartment buildings because renting units is a business and when someone is in business they want to make maximum profit, but rent control prevents landlords to obtain that profit. However, people will be willing to invest in something that will provide a better future return, such as: stock and hotels.
The idea of rent control is to make rent more affordable for those who cannot afford paying rent. That would be good if it really helped the needed people such as: students with low income, couples recently married, and families with children who cannot afford paying for a rent; however, they cannot be benefit from rent controlled units since the longtime resident tenants will not leave their apartments. Therefore, there is a very low supply for the high demand on rent controlled units.
Rent control does not help the economy or the poor people who cannot afford living in certain areas because tenants who were lucky to rent a rent controlled apartment unit will be less likely to move out, and for someone who could...