What does the author want to know?
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: A. Which type of control gives tenants stability at least cost to the supply of housing
- Step 1: The final sentences say the sensible question is which design delivers stability at least cost to supply.
- Step 2: The general question is rejected.
Answer
Which type of control gives tenants stability at least cost to the supply of housing.
Why not the others: The author expressly sets aside the question of good or bad, and does not raise taxes, payments or economists' agreement.
Practise more Housing.
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