5.2 Rent Controls: A Case Study of
Price Ceilings LO 2
Rent controls are a form of price ceiling. The major consequence of
binding rent controls is a shortage of rental accommodations and the
allocation of rental housing by sellers’ preferences.
Because the supply of rental housing is much more elastic in the long
run than in the short run, the extent of the housing shortage caused
by rent controls worsens over time.