PrepTest 14 - Section 2 - Question 11 | Explanation & Discussion

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Unless they are used as strictly temporary measures, rent-control ordinances (municipal regulations placing limits on rent increases) have several negative effects for renters. ███ ██ █████ ██ ████ ███ ████████ ████ █████ █████ █ ████████ ██ ██████ ██████ ████ ████████████ ███ ███████ ██████ ████ ███ ████ ████ ███ ███ ███████████████████ ████ ██████████████████ ████████████ ██ ████ ███████████████ ████████████ ██ ███ █████ █████ ███████ ██ ████████████ █████ ████ █ ██████ ████ ██ █████████ █████ ███ ███ ███ ████████████ ██████████ ███████ ██ █████████ ██ ██ ██████████ ███ ██████ ███ ██████████ ████ ████ ██████ █████ ███████ ██ ███ ████████ ██ ████ ██████

Stimulus Breakdown

The stimulus discusses rent-control ordinances, i.e. municipal regulations which limit rent increases. This is what we learn:

(1) rent-control ordinances cause shortages of rental units, but only in the long term;
(2) the advantage of lower rent increases occurs immediately;
(3) in some cities, rent-controlled tenants hold political power and can control whether the municipality uses rent-control ordinances; and
(4) in all such cities, tenants use their power to pursue short-term gains.

Objective: Identify an Inference

When rent-controlled tenants hold power over rent-control ordinances, they always use it for short-term gains. But those short-term gains (lower rent increases) come at the cost of long-term harm (shortages). So we can infer that cities where rent-controlled tenants hold political power are vulnerable to rental shortages.

There might also be other inferences that are harder to spot. When working through the answer choices, we want to focus on drawing concrete ties to the stimulus to determine if each option can truly be inferred, or if it could be false.

11.

If the statements above are █████ █████ ███ ██ ███ █████████ ███ ██ ████████ ████████ ████ █████

It is impossible ███ █████████ ██ █████ █████ ████ ████ ████████ ███ ██ ███████

The stimulus says that rent-control ordinances place limits on rent increases and make them smaller. These effects are both possible if landlords can still raise rents, just by a smaller amount. We would need the stimulus to be much more absolute for (A) to be properly inferred.

In many municipalities ████████████ ██████████ ███ ████████ ██ ████ ██ █████████ ██ ██████ █████ ██████

Most of the stimulus is dedicated to discussing the effects of rent-control ordinances. All we know about their enactment and repeal comes from the very last sentence of the stimulus. And in the municipalities discussed, what's important is short-term gain—i.e. keeping rent increases low.

These facts simply don't tell us enough about the repeal of rent-control ordinances to let us infer (B). Are shortages alleviated quickly enough to count as another short-term gain? Does that outweigh the appeal of low rent increases? We don't know. For (B) to be correct, the stimulus would need to go into more detail.

10%

The only negative ██████ ██ ████ ███████ ███ ███████ ██ ████ ██ ██████ █████ █ ████████ ██ ██████ ██████

(C) actually contradicts the stimulus, which says that rent-control ordinances have several long-term disadvantages, with shortages being just one of them.

In many municipalities █████ ██ ████ ██ ██████████ ████ ███ █ ████████ ██ ██████ ██████

The stimulus discusses "many" municipalities where rent-controlled tenants hold political power. In such municipalities, decisions about rent-control ordinances are driven by short-term gain, i.e. smaller rent increases. This favors enacting ordinances, which in the long-term create rental shortages.

All this information together tells us that in many municipalities, political conditions will lead to ongoing use of rent-control ordinances, in turn creating a rental shortage. (C) is properly inferred from the facts in the stimulus.

67%

In the long █████ █ ████████ ██ ██████ █████ ████ █████ █████ ██████████████

Rent-control ordinances create rental shortages in the long term, but we don't actually know about the effects of rental shortages themselves. For (E) to be correct, the stimulus would need to tell us more about what happens when there are shortages. Does the market push rents up, or do the rent-control ordinances keep them low? Without knowing this, (E) isn't properly inferred.

15%

PrepTest 14 - Section 2 - Question 11

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