Final answer:
Rent control policies, although initially seeming to benefit renters, can actually have negative consequences for both renters and the housing market as a whole. Abolishing rent control allows prices to be determined by supply and demand, increasing the availability of housing options for renters. Your friend may change her opinion on rent control based on this analysis.
Step-by-step explanation:
Rent control policies, although initially seeming to benefit renters, can actually have negative consequences for both renters and the housing market as a whole. One of the main reasons why abolishing rent control leads to a more efficient apartment market is because it allows prices to be determined by the forces of supply and demand. In a competitive market, higher apartment rents incentivize landlords to supply more rental units, which increases the availability of housing options for renters.
Here is a graph to illustrate this concept:
As shown in the graph, when rent control is in place, the quantity supply of rental units (Qs) is lower than the quantity demanded (Qd), leading to a shortage of available apartments. This shortage results in higher competition among renters and higher opportunity costs for those who are unable to find affordable housing.
Based on this analysis, it is likely that your friend may change her opinion about rent control after understanding its impact on the apartment market. By allowing the market to determine prices, more rental units become available, providing renters with a wider range of options and potentially more affordable housing.