Rent Ceiling

AAA

DEFINITION of 'Rent Ceiling'

A maximum price a landlord is allowed to charge for rent. Rent ceilings are usually set by law and limit how high the rent can go in a specified area. However, as a result of this regulation, the quantity of available housing is often decreased because landlords are not willing to rent out their property for a low price.

INVESTOPEDIA EXPLAINS 'Rent Ceiling'

Many economists question the effectiveness of rent ceilings. They have no effect if the equilibrium price is below the ceiling. If the ceiling is set below the equilibrium level, however, then there is a deadweight loss created. Other problems come in the form of black markets, search time and fees which are not exactly rent such as "key money" (large initial cost for new keys).

RELATED TERMS
  1. Law Of Supply

    A microeconomic law stating that, all other factors being equal, ...
  2. Law Of Demand

    A microeconomic law that states that, all other factors being ...
  3. Quantity Supplied

    A term used in economics to describe the amount of goods or services ...
  4. Microeconomics

    The branch of economics that analyzes the market behavior of ...
  5. Ceiling

    The maximum level permissible in a financial transaction. Ceiling ...
  6. Floor

    The lowest acceptable limit as restricted by controlling parties. ...
Related Articles
  1. Personal Finance

    To Rent Or Buy? There's More To It Than Money

    Your lifestyle, level of commitment and the trade-offs need to be carefully weighed.
  2. Active Trading Fundamentals

    Support And Resistance Basics

    Understanding the concept of Support and Resistance in trading can drastically improve your short-term investing strategy.
  3. Taxes

    Tax Deductions For Rental Property Owners

    Besides creating ongoing income and capital appreciation, real estate provides deductions that can reduce the income tax on your profits.
  4. Taxes

    Sell Your Rental Property For A Profit

    Being a landlord can be taxing, especially when you want to sell. Find out how to reduce your burden.
  5. Options & Futures

    Insurance 101 For Renters

    If it's time for you to leave the nest, find out how to protect your new home from disaster.
  6. Retirement

    Are You Ready to Rent?

    If you think it's time to test your wings and leave your parents' nest, read on.
  7. Economics

    What are the major differences between a monopoly and an oligopoly?

    The major differences between a monopoly and an oligopoly include the number of firms in the market, type of barriers to entry and presence of close substitutes.
  8. Chart Advisor

    OPEC's Decision Sends Oil Stocks Lower

    OPEC’s decision to keep oil production on cruise control has led to declining prices. Here's a look at 3 oil stocks that have followed suit.
  9. The law of supply and demand is one of the most basic principles in economics.
    Economics

    What is Supply & Demand?

    The law of supply and demand is one of the most basic principles in economics. In simplest terms, the law of supply and demand states that when an item is scarce, but many people want it, the ...
  10. Economics

    Why does inflation increase with GDP growth?

    Examine the relationship between inflation and GDP, and why GDP growth leads to higher prices. Explore the effects of uncontrolled inflation and GDP growth.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center