BYU’s 2-mile radius rule: an opinion editorial
Economics and 2-mile rule
Starting after this month, approved housing for BYU will be limited to a two-mile radius. The intentions of this policy were to benefit the communities of Provo and Brigham Young University. According to the Provo city government Web site, the policy was made “to foster redevelopment of the built environment close to campus, providing affordable, quality housing opportunities to support the university and providing neighborhood-scale commercial services within a walkable community.”
However, apparent considerations were not taken to address possible rent increases. With an increase of students within a limited area, there is a consequential increase in demand for housing spaces. According to supply and demand, if demand is high and supply is limited the monetary value of the demanded good will increase. With the new policy in place, more students will be restricted to live in a limited amount of spaces. The demand, therefore, will increase followed by a jump in prices to rent these properties.
If rent prices are allowed to increase without regulation, Provo’s ability to provide “quality, affordable housing” might be jeopardized. To prevent this from happening, action needs to be taken. One proposal would be authorizing a rent ceiling, which would adequately regulate rent prices and prevent overcharging. This protects students financially and maintains the goal of SCAMP to provide affordable housing.
Lacey Lyman
North Powder, Ore.
[From The Daily Universe]
This letter was written by a student last month before the 2-mile radius rule went into place. She uses the principles of economics to try to prove her point, which is a very logical approach given that it is a economic issue; however, I question the way she presented her argument. First of all, when Lacey used economic-speak she appealed to a certain niche of people, probably only those interested in economics. The majority of the student population finds economics boring and probably tuned out by just reading the title. Those that read on are likely those that understand economic principles. Most economists would agree that limiting supply will cause prices to rise (except if the supply is enough that it does not affect it at all), but her proposed solution is curious.
Lacey proposes Provo implement a “rent ceiling,†or put a cap on the highest level that landlords can charge their tenets for rent, in order to help Provo continue to provide “quality, affordable housing.†The problem with rent controls is that they don’t accomplish either objective. Studies of cities that have implemented rent controls show that rent prices tend to drift upward toward the rent ceiling, causing the majority of apartments to be right at the ceiling, and fewer lower-priced apartments. Also, because apartment owners have no incentive to provide additional quality above and beyond the rent ceiling, and because competition is diluted, the quality of all apartments suffers at the hands of rent controls. Lacey is trying to make an appeal to economics when those that would listen to her would probably disagree with her argument.
(Somewhat) Similar Posts:
In 2003 BYU announced that it would be implementing new boundaries for its BYU-approved housing (now called ‘contracted housing’), which finally went into effect last...This is an editorial submitted to the Daily Universe by Marriage & Family professor, Mark H. Butler, apparently refuting a similar editorial that had been...This is an interesting editorial from the New York Times, defending the rights of gay couples to receive full, legal marriage instead of deciding on...What is the prime rate, what is it set to now, and what does it represent? According to about.com the prime rate is defined...
May 15th, 2007 at 10:31 pm
Exactly my thoughts when I finished reading.
Economics would demand, in my view, an abolishment of the “2-mile rule”, not a limit of flexibility in the rental property market.