Closely clustered urban societies have resulted in higher cognitive skills and improvement in social intelligence. City concentration has given boost to activities in business, management, art and entertainment. In recent times it has also been observed that high tech industries also prefer density. Some observations has shown reduction in transport costs where density is high. In high density areas mode of communication includes less of self driven cars and more of shared communications that reduces the cost. Moreover, the proximity to the workplace reduces the fuel cost. It has also been suggested by some studies that happiness has a positive correlation with city density.
Rent control is similar to price ceilings. When a rent control system is imposed the rent cannot exceed a specified limit. This system is often adopted when the demand for housing is very high and there is a tendency of house rents to sky-rocket. The rationale for imposing a rent control is that the demand for housing is inelastic. The inelastic demand implies that even if the rent rises the demand for housing will not fall significantly to clear the market. The excess demand will put an upward pressure on the rent letting it to rise to levels unaffordable by low income families. A control on the upper limit of rent makes houses affordable to low income families.
Disadvantage: One drawback of this system is that it creates resentment among the house owners who cannot earn extra rent in times of high housing demand. It also leads to uneconomic uses of space and cannot solve the supply shortfall in the market. The controlled rent allows the families to use large spaces whereas many other families still remains without a suitable house.
Rent subsidy is a system where the government provides housing at subsidized rates to low income families and to the elderly and disabled. In such a case the house owners have to reason for resentment as they are getting their dues. The government is providing the subsidy so that rent becomes low for the people who need it. Moreover this kind of housing leads to economy of space as the subsidy is provided for specified dwellings.
Disadvantage: Rent subsidy has some drawbacks. The people availing the subsidy have fewer choices as they have to choose from the dwellings for which subsidy is available. Moreover, this is a burden on the government funds.
Income subsidies are concessions provided on income taxes and other income related benefits that can be utilized for housing as well. Income subsidies are not targeted for housing only. There are a number of other benefits that are tied to the income subsidy programs. More importantly health benefits come under the income subsidy schemes.
Disadvantage: Income subsidy is not a scheme specified for housing affordability. So this scheme cannot fulfill the objective of making houses affordable to the low income families.
Thus if we compare the three systems in terms of housing affordability we find that the rent subsidy is better scheme as it does not affect the interest of the house owners, allows economic use of space and helps low income, disabled and the elderly to get houses at a low rate.
Works Cited
Florida, R. (2012, November 28). Cities With Denser Cores Do Better. Retrieved from Citylab: http://www.citylab.com/work/2012/11/cities-denser-cores-do-better/3911/
