TENANCY RENT CONTROL AND CREDIBLE COMMITMENT IN MAINTENANCE

Richard Arnott () and Elizaveta Shevyakhova
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Elizaveta Shevyakhova: Department of Economics, Boston College

No 200812, Working Papers from University of California at Riverside, Department of Economics

Abstract: Under tenancy rent control, rents are regulated within a tenancy but not between tenancies. This paper investigates the effects of tenancy rent control on housing quality and maintenance. Since the discounted revenue received over a fixed-duration tenancy depends only on the starting rent, intuitively the landlord has an incentive to spruce up the unit between tenancies in order to “show†it well, but little incentive to maintain the unit well during the tenancy. The paper formalizes this intuition, and presents numerical examples illustrating the efficiency loss from this effect.

Keywords: tenancy rent control; rent control; maintenance; housing quality; credible commitment (search for similar items in EconPapers)
JEL-codes: R21 R31 R38 (search for similar items in EconPapers)
Date: 2008-09, Revised 2008-09
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http://economics.ucr.edu/papers/papers08/08-12.pdf First version, 2008 (application/pdf)

Related works:
Working Paper: Tenancy Rent Control and Credible Commitment in Maintenance (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:ucr:wpaper:200812

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