Greg Mankiw explains a scheme used by some universities in New York City:
1. The university buys a rent-controlled building
purchase price is low, because the existing landlord cannot make
money renting it.
2. The university then rents the apartments to its own seniorfaculty, who view this as a great perk. In essence, the differencebetween the free-market rent and the controlled rent is a form ofcompensation for the professor. As a result, the university can reducethe professor's...
Published on September 14, 2010 06:10