Photo by Artem Beliaikin on Unsplash Production of boiler chickens (those raised for their meat, not eggs) in the US...
Rental Housing Crisis in the Midst of COVID-19 Pandemic
On Thursday, August 26th 2021, the U.S. Supreme Court ended the Centers for Disease Control and Prevention (CDC) Eviction Moratorium for renters who have been unable to pay their monthly rent due in the current pandemic. This is a big win for the landlords of rental properties, while tenants are helpless on their next move. Some states like New York have stepped in to extend the moratorium to mid-January 2022 to allow federal aid funds to reach affected tenants.
However, both these events – Supreme Court decision and COVID-19 pandemic – have further exacerbates the housing shortage arising from rent control policies enacted since the Second World War. Rent control is an application of price ceiling whereby the government intervenes in the competitive market to place a limit just below the market equilibrium that landlords can charge their tenants. This causes the quantity demanded for housing to be always more than the quantity supplied, leading to high rents amidst the rental housing shortages.
Discussion/Questions:
- Who do you think is experiencing a greater economic loss from both these events – the landlords OR the tenants of the rental housing market? Do explain your choice.
- The rent control policies enacted in mid-1940s to address post-World War II housing crisis became permanent and is in effect even today. Do you think the eviction moratorium would follow a similar fate? Do explain.
- Self-reflection: Neither the rent-control policies nor the eviction moratorium is reducing the demand for rental housing. Should both these government interventions of the competitive market be overhauled for a fresh approach to address the rental housing demand? If so, provide 2 recommendations for the government to consider?
Sources: Photo- Unsplash: North Beach, San Francisco, United States – https://unsplash.com/photos/NmVnsp13JYc. Supreme Court of the United States: Alabama Association of Realtors, Et. Al. v. Department of Health and Human Services, Et. Al. on application to vacate stay – https://www.supremecourt.gov/opinions/20pdf/21a23_ap6c.pdf. NPR: New York Extends Its Eviction Moratorium Through End Of 2021 – https://www.npr.org/2021/09/02/1033634413/new-york-extends-its-eviction-moratorium-through-end-of-2021. Price Ceiling – Rent Control Example from John Stossel –
https://www.youtube.com/watch?v=R0h8kfA4i_A . The Library of Economics and Liberty: Rent Control – https://www.econlib.org/library/Enc/RentControl.html. Foundation for Economic Education: The real reason your rent is so high – https://www.youtube.com/watch?v=iClQVIlWs5A&t=20s.
