MUCH has been written about the fact that a significant proportion of the population cannot afford rentable housing.
However, state intervention, in the form of rent controls, will only exacerbate the housing market. In economics, supply and demand analysis demonstrates that if rents are lowered below the market rate, property owners have less incentive to maintain their properties and may remove them from the rental market altogether.
As a result, houses may stand idle, be sold to owner-occupiers or be converted into business units. Meanwhile, the low rents will stimulate even greater demand for rental property but that demand will remain unsatisfied, leading to overcrowded conditions and even homelessness. The unforeseen consequences of rent controls are enormous, as witnessed in New York for decades.
IAN ROBLIN South Rise Llanishen Cardiff
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