Question

News Analysis: Rent Rates, Vacancies, and Rent Controls The couple, who perform as The Fallen Stars, said their rent of $1,450 a month is set to increase to $2,050 if they continue to rent month to month, which is what they had planned. "We've been here 17 years, we've never been late on our rent, never had any complaints. It's a kick in the teeth," Bobba Byrnes said. Tracy complained that management appears to be comparing their units to complexes with amenities Huntington Manor lacks: a pool, a gym, garbage disposals and air conditioning. "We've always been very happy here. It's been a nice place to live," Tracy said. "It feels like they're breaking up the community because all the people who have been here long term are going to have to leave." From: Jeff Collins, "Rents Hit All-Time Highs Amid Job Growth and Low Vacancy Rates," Orange County Register, April 17, 2017. Permissions Copyright © 2017. All rights reserved. According to the article, which of the following are reasons for low vacancy levels? Check all that apply. High home prices O Too many low-income workers High unemployment Limited supply of rental properties According to the article, which of the following types of tenants are less likely to be affected by the rent price increases? Check all that apply. Low-income workers High-income workers Retirees

Answer 1

Solution: According to the article it can be interpreted that the rents have increased and all those people who have been staying for a long term had to leave for the same. The increased rental prices and the low vacancy levels clearly depict that there is a huge demand for affordable rental property in the area due to which the prices of the houses have been increased by the landlords to earn profits. There is a high demand and because of it the ones who are willing to pay more get the houses at higher rents than the people who are paying lesser rent. Since the demand is increased but the houses are limited, the supply of rental properties is also limited.

Therefore the correct answers are:

High home prices

Limited supply of rental properties

Solution: With the increase in rental prices, the tenants that are less likely to be affected are the people who are earning a huge amount of money. The low income workers and the retirees will have to spend most of their savings on rent. There is a disbalance of budget for low income workers and retirees as most of the part of pension that the retirees earn gets spend on housing rent. In the article too, most of the people were low income workers hence they couldn't afford the rising prices of rents and had to leave their houses.

Therefore the correct answers is:

High income workers