Soal Latihan dan Jawaban Reading Comprehension 81
Rent control is the system whereby the local government tells building owners how
much they can charge their tenants in rent. In the United States, rent controls date back
to at least World War II.
In 1943 the federal government imposed rent controls to help solve the problem of
(5) housing shortages during wartime. The federal program ended after the war, but in
some locations, including New York City, controls continued. Under New York’s
controls, a landlord generally cannot raise rents on apartments as long as the tenants
continue to renew their leases. In places such as Santa Monica, California, rent controls
are more recent. They were spurred by the inflation of the 1970’s, which, combined
(10) with California’s rapid population growth, pushed housing prices, as well as rents, to
record levels. In 1979 Santa Monica’s municipal government ordered landlords to roll
back their rents to the levels charged in 1978. Future rents could only go up by two-thirds
as much as any increase in the overall price level.
In any housing market, rental prices perform three functions: (1) promoting the
(15) efficient maintenance of existing housing and stimulating the construction of new
housing, (2) allocating existing scarce housing among competing claimants, and (3)
rationing use of existing housing by potential renters.
One result of rent control is a decrease in the construction of new rental units. Rent
controls have artificially depressed the most important long-term determinant of
(20) profitability – rents. Consider some examples. In a recent year in Dallas, Texas, with a
16 percent rental vacancy rate but no rent control laws, 11,000 new housing units were
built. In the same year, in San Francisco, California, only 2,000 units were built. The
major difference? San Francisco has only a 1.6 percent vacancy rate but stringent rent
control laws. In New York City, except for government-subsidized construction, the only
(25) rental units being built are luxury units, which are exempt from controls. In Santa
Monica, California, new apartments are not being constructed. New office rental spare
and commercial developments are, however. They are exempt from rent controls.
Reading Comprehension 81
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The shortage of affordable housing in the United States.
The construction of apartments in the United States.
Causes and effects of rent control
The fluctuations of rental prices
Economic conditions during wartime
Rapid population growth
Record-high housing prices
increase vacancy rates
decrease sales of rental units
There is a growing need for government-subsidized housing.
Luxury apartments are rarely built when there is rent control
San Francisco has eliminated its rent control laws.
Rent control leads to a reduction in the construction of housing units
New York City
Moderately priced apartments