Negotiatiated rents ñDo they reflect Neighbourhood Quality? Empirical Evidence from two cities in Sweden

Kicki Björklund and Kerstin Klingborg

ERES from European Real Estate Society (ERES)

Abstract: This paper aims to analyse the existence of diffentiated rents reflecting differencies in housing and neighbourhood quality. The system for rent setting in Sweden is partly based on a negotiation process in which the change in rent is an outcome of annual municipality-wise negotiations between the tenant•s association and the municipality-owned housing companies. In this negotiation there is a possibility to let rents develop differently in different neighbourhoods possibly aiming towards better correspondence of rents and tenants conceptions of housing and neighbourhood quality. It is our understanding that the negotiations in several rental housing markets the last decade has consciously aimed towards such rental adjustments. In this paper we use the hedonic method on unique data from two cities in Sweden, Gothenburg and Lule¬. The paper concludes that differentiated rents are present, hence the existing rent setting system in Sweden can be used to improve the relation between rental structure and neighbourhood quality.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2003-06-01
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2003_308

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