Why does the author list three types of control?
Economists often claim that rent controls reduce the supply of housing: landlords will rent less, and builders will build less. There is evidence for this, but the claim is stated too broadly. The effect depends on the kind of control. A freeze on rents in existing contracts is different from a cap on the rise in rents between tenancies, and both are different from a ceiling on the rent of new buildings. Tenants gain from stability, and communities gain when families are not forced out. The sensible question is not whether rent control is good or bad, but which design delivers the stability tenants want at least cost to supply. To answer it, we need to compare designs, not to repeat the general claim.
Answer and explanation
Correct answer: B. To show that 'rent control' covers policies with different effects
- Step 1: The three are described as different from each other.
- Step 2: They illustrate why the broad claim fails.
Answer
To show that 'rent control' covers policies with different effects.
Why not the others: The passage does not say they have the same effect, rank a freeze, discuss builders' preferences or criticise landlords.
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