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Chapter 3: Q 48. (page 79)

Can you propose a policy that would induce the

market to supply more rental housing units?

Short Answer

Expert verified

1. Reduce property tax

2. Lower price of building permits

Step by step solution

01

Step 1.1. Reduce property tax

Property tax is the annual amount paid by a landowner to the local government or the municipal corporation of his area.

A cut in property tax makes it inexpensive for landlords to purchase more houses and rent them out with some discount or at a lower price which in turn incentivizes consumers to rent houses.

02

Step 2.2. Low-priced and timely building permits.

Getting a building permit to build apartments takes a lot of time and money. So if the permits are lower in price and ease of access to permits is increased. Therefore the timely implementation of the building is possible and then it is rented.

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Most popular questions from this chapter

Explain why the following statement is false: 鈥淚n the goods market, no buyer would be willing to pay

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of a substitute good (for example, hot dogs) increases and the price of a complement good (for example, hamburger buns) increases, can you tell for sure what will happen to the demand for hamburgers? Why or why not? Illustrate your answer with a graph.

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Price per poundQdQs
\(5.002616
\)6.002418
\(7.002220
\)8.002121
$9.002022

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