Rehabilitation decisions in rental housing: An empirical analysis

Housing policy-makers show increased interest in encouraging rehabilitation of the existing housing stock. But little is known about what factors influence the decision to invest, particularly in rental housing, making policy design difficult. This paper presents an empirical analysis of individual landlords' housing rehabilitation decisions in one housing market. The analysis tests hypotheses about the impacts of detailed neighborhood, structure, and site characteristics on each owner's investment activity. Findings support the general hypothesis that economic returns to investment have a major effect on rehabilitation decisions, identify some other important circumstances, and suggest which among many specific policy levers should be effective.