Housing Vouchers,Tenant Quality,and Apartment Values

Landlords face unique concerns in maximizing profits when they accept subsidized as well as unsubsidized tenants. Subsidized tenants come with lower rental collection risk because part or all of the rent is paid by a public agency and accepting subsidized tenants may widen the potential tenant market. But subsidized tenants tend to reduce overall tenant quality and to impose higher operating costs. By accepting subsidies, landlords may also subject themselves to periodic site inspections that may increase capital costs. Further, subsidized tenants may eventually crowd out unsubsidized tenants, lowering the average quality of the resident mix. Tests from Washington, DC apartments on accepting and advertising for Section 8 tenants support these qualitative predictions. Accepting Section 8 tenants enhances revenues, but advertising for them lowers revenues. More aggressive solicitation of subsidized tenants leads to a crowding out or displacement risk that dominates over any diminished collection risk.     

Rent Control with Matching Economies: A Model of European Housing Market Regulation

Housing markets are thin, and consumer search for housing is costly, time consuming, and risky. Mismatches between tenants and dwellings are common in a laissez-faire market. There are scale economies in accumulating tenants and houses and then matching them up to improve welfare. In many European countries, some housing is rent controlled and rationed by public centralized matching. Waiting time, risk in rationing, and risk in matching are costs that arise from such regulation. We show that welfare improvements over laissez-faire occur if gains from centralized matching can offset the decrease in housing quality, the possible increase in waiting times, and the risks in rationing induced by rent controls. Under regulation, there is a welfare maximizing partition of the stock into free and controlled markets; and contrary to observed practice, it is often welfare improving to set controlled rents above (not below) laissez-faire, which increases the supply offered for centralized matching and the opportunity for a better match.     

The economic effects of long-term rent control: The case of New York City

This article presents a simple model of rent control in which the costs and benefits can be analyzed in terms of Hicksian consumer and producer surpluses. Data from New York City are then used to examine the effect of the long-term rent control in that city. Estimates are presented which suggest that the program provided tenants with benefits amounting to about 5 percent of their income in the years 1965 and 1968. Additional evidence shows that tenant benefits declined rather sharply between the two years, and that in each of the years benefits were higher for older tenants, richer tenants, and white tenants than for their counterparts. Finally, evidence presented here suggests that, due to the in-kind nature of the program, the cost to landlords exceeded the benefits to tenants by about 75 percent.     

Agency and ownership of housing

In this model, landlords cannot enforce leases conditional on their tenants' efforts to care for their residences, but can exploit economies of scale in maintenance. Also, multifamily properties that have been converted from rental apartments to condominiums or cooperatives cannot be reconverted. In this case, tenants optimally expend less effort on care than homeowners, while landlords partly offset this reduced care with extra maintenance. As a result, single-family houses and residences in small multifamily dwellings are optimally owned by their occupants, while residences in large dwellings are optimally rented to tenants. These results are roughly consistent with the available data.     

What do economists know about the effect of rent control on housing maintenance?

Economists' views concerning the effect of rent control on the maintenance of controlled apartments are based on extremely simple models of housing markets and rent control ordinances and on casual empiricism. This paper shows that the models are seriously deficient in that they ignore essential features of actual rent control ordinances and important responses to them. When these features and responses are taken into account, the effect of rent control on maintenance of the controlled stock is theoretically ambiguous. The paper also shows that the few systematic empirical studies have serious flaws. Therefore, there is no basis for economists' strongly-held belief that rent control leads to worse maintenance.     

Operating Expenses and the Rent Premium of Energy Star and LEED Certified Buildings in the Central and Eastern U.S.

This paper investigates the relationship between operating expenses and rents of Energy Star and LEED certified buildings in the Central and Eastern United States. Several studies have shown that sustainable buildings command a rent premium compared to comparable conventional buildings. Lower operating expenses are expected to be a major source of the rent premium that sustainable buildings command. This is especially the case for buildings with triple-net leases, where tenants directly benefit from savings in operating costs. For a large dataset of U.S. office buildings this study finds significantly lower operating expenses in LEED certified buildings. However, savings in operating expenses only explain part of the rent premium. Additional factors must be at work. Surprisingly, we find significantly higher operating expenses in Energy Star rated buildings. Hence, intangible benefits appear to be the major source of rental premiums of Energy Star rated buildings.     

Rent control: The citizen,the market,and the state

The paper is a positive and normative public choice analysis of rent control. The positive public choice section hypothesizes that differences in rent control regimes across countries emerge out of differences in the political power of tenants and landlords, out of differing attitudes to security of tenure and the fairness of gains from property ownership, and out of differing values regarding equality of opportunity versus equality of result. The normative public choice analysis evaluates rent control by asking whether rent control would be allowed under a unanimously approved constitution. It is argued control would not be allowed; not because the objectives of control are outside the sanctioned domain of government but because control is horizontally inequitable.     

Search costs and apartment rents

Differences in apartment rents are explained with a hedonic equation that includes property management variables omitted in prior studies. Our joint hypotheses are that differences in contributions to rent exist among property managers as a function of their ability to reduce search costs to renters and that the manager's fee for providing search-cost-reducing information is reflected in the amount of rent paid. Two proxies for the level of search costs are found to be positively and significantly related to the rent level.     

Local Presence, Scale and Vertical Integration: Brands as Signals

The positioning of a property along a given rent-vacancy signaling frontier depends on its ownership, branding, and quality. Confirmation of a separating equilibrium occurs if the quality from the branding, itself dependent on costly management decisions, results in rent differentials. For institutional-grade apartments in metro Atlanta, Georgia, local presence, scale, and vertical integration are productive in improving quality, signaled by branding. Even after adjustment for self-selection and physical characteristics, branded properties achieve gross rents at least 8% higher than unbranded properties with no sacrifice in occupancy. Given that branding depends on management decisions, then rents and occupancy do not depend on hedonic physical characteristics alone.     

Economic and political aspects of negotiated rents in the Swedish housing market

The aim of this paper is to describe the rent control system in Sweden, evaluate the effects on consumption and production in the housing market, and provide a public choice explanation of the present rent control system.The first section of this paper contains introductory remarks and an overview of the rental market in Sweden. The Swedish rent control system and its prerequisites are described in section 2. Attention is given to two important prerequisites: the existence of a large municipal housing sector and a strong tenants' movement. As a result, a rent system has been developed with all rents set by negotiations. The rent structure is determined by a fairness principle, which has some resemblance to market adapted rents. The rent level will be determined by a non-profit condition in municipal housing companies.In section 3 the effects of the existing rent control system are discussed with the municipality of Stockholm as a test case. Effects on rent level and rent structure are evaluated, and the relation between rent policy in municipal housing companies and resulting rents in private housing is analyzed. Gains and losses to tenants and landlords are evaluated as well as effects on construction and maintenance.In section 4 a political perspective is discussed. The aim is to explain why the system is not implemented in the market adapted way it was intended. Finally, the future of the rent system is discussed.     

REGULATION, RENT SEEKING AND REFORM IN HIGHER EDUCATION

Two relevant branches of economic analysis—the economics of regulation and the economics of rent seeking — are reviewed in order to assess the extent to which the basic structure of the recent reforms in UK higher education can be grounded in economic logic. Attention is paid to the essential nature of the higher education sector as a producer of both teaching and research, and the importance of considerations of quality. It is argued that the reforms may pay too little attention to some of these issues.     

The Transitory and Legacy Effects of the Rental Externality on House Price and Liquidity

It is widely believed that tenant-occupied houses do not show as well as owner-occupied or even vacant units and so are harder to sell. These short term or transitory marketing effects should disappear in subsequent sales by owner-occupiers. Overuse by tenants and poor maintenance by landlords, however may lead to longer term or legacy effects on value and liquidity. We use a 20 year data series on house transactions to estimate these separate effects in a simultaneous model of price and liquidity. The results reveal strong transitory renter effects on both value and liquidity consistent with lower buyer willingness-to-pay. We do not find persistent legacy effects from prior use as rental property. Instead, there appears to be unmeasured quality or a characteristic common to houses suitable for rent that leads to permanently lower market values regardless of previous use in that capacity.     

Housing and Mortgage Market Policies in Chile

This study provides a survey of the housing and mortgage market policies applied between 1976 and 1994 in Chile. These policies are implemented within the framework of a free-market economy in which the state plays a subsidiary role in the economic affairs of the nation. Of particular importance to the housing sector have been the elimination of interest rate and rent controls, the elimination of a specialized housing finance system, and the consistent application of an indexation scheme that preserves the real value of monetary contracts and that allows investors the recovery of their funds with a competitive real return.     

The experience with rent control in Israel: From rental housing to condominiums

During the past decades, home ownership has replaced privately owned rental housing as the dominant form of tenure in Israel. An important factor in this transition has been rent control. This paper examines the development of the rent control system, surveys the other major housing policies, and considers the main effects of rent control on the housing market.The Israeli rent control system is characterized by far reaching security of tenure; rent ceilings that are a fraction of the free-market rent; legalized key money shared between owner and tenant; and decontrol after a tenant dies or the landlord repurchases the unit. Consequently, the construction of privately owned rental housing has ceased. The controlled sector is disappearing, and the remaining stock is badly undermaintained and deteriorating.     

A Comparison of Federal Government Office Rents with Market Rents

This study examines Federal Government office leases using data from Texas and Oklahoma during the 1981–1991 time period. The lease indifference model presented here indicates that landlords may be willing to accept lower rents from government tenants due to reduced tenant risk, but that such discounts may be offset by other premiums implicit in the lease contract. The data collected for this study reveal that rents paid by the government are significantly higher than average market rents during this time period. A time-series, cross-sectional regression analysis of the spread between market rents and office rents to government tenants in nine metropolitan markets suggests that the difference is affected in part by expense pass-throughs, lease period, amount of space leased, and local market conditions.     

Financial development,government ownership of banks and firm innovation

Using a newly-available World Bank survey of over 28,000 firms from 46 countries, we examine how financial development affects firm innovation around the world. We find that while stock market development significantly enhances firm innovation, banking sector development has mixed effects. We show that the latter result can be explained by different levels of government ownership of banks. Specifically, in countries with lower government ownership of banks, banking sector development significantly enhances firm innovation; while in countries with higher government ownership of banks, banking sector development has no significant or sometimes even significantly negative effects on firm innovation. Such negative effects are significantly stronger for smaller firms. The results are robust to various controls such as firms’ human capital and ownership structure, to estimations using instrumental variable techniques and alternative measures of firm innovation.     

Identification of critical operational performance measures— a research note on a benchmarking study in the transportation and distribution sector

In this paper the results presented are of an empirical benchmarking study investigating which operational performance measures in the transportation and distribution sector are the most important for financial performance. In the existing literature, the selection of operational performance measures is mostly derived from strategy, using interviews and discussions with management. The main contribution of this paper is to show how an application of benchmarking can identify the relative importance of different operational performance measures and to set standards for those measures.$g0     

提供经济适用房准入标准的利弊思考

地方政府为了完成保障房指标,超比例投资建设经济适用房造成经济适用房空置,为盘活空置的经济适用房,拟向中高收入人群提供经济适用房。本文将这二项作为研究对象,发现第一个政策解决了财政资金问题,却遇到意向不到的问题;第二个政策可以解决空置经济适用房占用财政资金问题,但在实施过程中将遇到与国家一些法律法规发生冲突的难题。向中高收入人群提供经济适用房的利弊得失,实际是在考验地方政府的智慧和施政能力。     

On the Structure of Analyst Research Portfolios and Forecast Accuracy

This study provides insights into the forces and constraints that shape analyst research coverage along country and sector dimensions and the impact of the structure of an analyst's portfolio on forecast accuracy. We find that analyst specialization by country and sector is sensitive to the extent to which firms  within  a country or sector and firms  across  country-sectors are exposed to common economic forces, the potential for revenue generation, and broker culture. Our tests indicate that existing research on the relation between analyst portfolio structure and forecast accuracy may suffer from an endogeneity bias. We use our analysis of analyst specialization to develop controls for this bias. Once we employ these controls, we find that country diversification is associated with superior forecast accuracy. However, the relation between sector diversification and forecast accuracy is context-specific. Specifically, sector diversification enhances forecast accuracy in an international context, while it detracts from forecast accuracy in a domestic U.S. context.     

Optimal taxation and welfare benefits with monitoring of job search

In order to investigate the interaction between tax policy, welfare benefits, the government technology for monitoring and sanctioning inadequate search, workfare, and externalities from work, we incorporate endogenous job search and involuntary unemployment into a model of optimal nonlinear income taxation. In this setting, the government faces a trade-off between boosting employment of low-skilled agents and raising work effort of high-skilled workers. If sanctions for inadequate search effort can be targeted at high productivity types for whom it is socially optimal to search, the government can afford to levy higher labor taxes on marginal workers without discouraging these agents from seeking work. This allows for lower marginal taxes on work effort of agents with a job. In contrast to workfare, job externalities in the private sector raise marginal tax rates, as the government attaches more importance to boosting employment of low-skilled workers.