The Financialisation of Rental Housing - PDF

Running Head: RATES OF RENT 1
High Rates of Rent
Student’s name
Institution’s name

RATES OF RENT 2
Topic
The Rent is Too High
Research Question
What would it take to curb the issue if high rates of rent in Washington DC State?
Background of the Research Question
Based on the portfolio assignment issued, the topic selected was a thesis on the high rent
rate in Washington DC State. This thesis helps explore the causes of the high rental rate.
Depending on the thesis statement provided, the research will be based on the major
causes and possible solutions to high rental rates in Washington DC State. Depending on the
issue of high rental rates, it can be argued based on the advantages and disadvantages of
increased rental rates to the facility providers and to the residents. The facility providers may set
high rental rates because of factors such as demand, security, availability of social amenities such
as schools and hospitals, proper infrastructures such as good roads and efficient communication
line.
Controversy that exists within the issue of high rates or rent
It has been argued that, the demand of houses is the major factor that triggers the facility
providers to raise the rental rates as a determining factor of who to offer the house or not. The
facility providers through increasing the rates of rent, they are able to solve the problem of
conflict of interest with justice. This is because; the facility provider will rent out the houses to
those individuals who will be able to meet the requirements whereby, all the few will afford the
set high residential cost.

RATES OF RENT 3
However, other people has argued that security is the priority for many people who seek
houses to let. Washington DC State is a safe environment free from terrorists and physical harm,
which may be caused by wild animals and criminals. Washington DC State is highly secured
since there are a number of police stations whereby, individuals can report any kind of
insecurity. The security personnel within the Washington DC State usually respond to insecurity
issues with immediate effect (Fields & Uffer, 2016). Naturally, people would want to live in
secure estates hence, the demand for Washington DC State will be high giving the facility
provides an opportunity to raise the rent.
Availability of social amenities in Washington DC State has greatly contributed to the
increased rates of rent by the facility providers. Generally, people would want to live in an estate
with hospitals where they can access healthcare services and schools where their children can
access educational knowledge (Roberts, 2017). Proper infrastructure is another factor which
promotes increased rental rates.
A proper infrastructure is one, which contains an efficient communication line and good
roads. Washington DC State is an area with proper infrastructure, which attracts many residents
hence, enabling the facility providers to set high rental rates.
My Position on the Issue of High Rates of Rent
In contrast, the above-named factors, which contribute to high rental rates, should not
always be the determinants of the rental price ranges for any state. This is because the high rent
rates maybe be a disadvantage to both the facility providers and to the tenants. Once the tenants
are unable to raise the high rent rates, they will not be able to reside in that particular state since
they will be spending their income on rents rather than on investment. In return, the facility

RATES OF RENT 4
providers will suffer adversely in terms of revenues since they will lack tenants due to the high
rental rates (Favilukis, Ludvigson & Van Nieuwerburgh, 2017).
Overall Claim
It is evident that the high rates of rent can be unfavorable to both the tenants and the
facility providers. This is in the case whereby, the tenants are unable to raise the high rental rates
hence; the estate will lack residents (Klašnja, 2016). In return, the facility will incur financial
losses.
The possible solution in this scenario is that the facility providers should be the
intervention of the housing authority, where they can set rent rates for the real estate market.

RATES OF RENT 5
References
Favilukis, J., Ludvigson, S. C., & Van Nieuwerburgh, S. (2017). The macroeconomic effects of
housing wealth, housing finance, and limited risk sharing in general equilibrium. Journal
of Political Economy, 125(1), 140-223.
Fields, D., & Uffer, S. (2016). The financialisation of rental housing: A comparative analysis of
New York City and Berlin. Urban Studies, 53(7), 1486-1502.
Klašnja, M. (2016). Increasing rents and incumbency disadvantage. Journal of Theoretical
Politics, 28(2), 225-265.
Roberts, A. (2017). Privatization and rent deregulation in Eastern Europe. In Housing Change in
East and Central Europe (pp. 65-82). Routledge.