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Security of Tenure, Costly Tenants and Rent Regulation

Author

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  • J.R. Miron

    (Division of Social Sciences, Scarborough Campus, University of Toronto, 1265 Military Trail, Scarborough, Toronto, Ontario MIC IA4, Canada)

Abstract

Many jurisdictions give residential tenants legislated packages of rights known generically as 'security of tenure', and some protect tenants further by prohibiting unjustified rent increases. The paper considers the effects of security of tenure on a competitive rental housing market. To illustrate the concepts, the paper describes current security of tenure and rent regulation provisions in the province of Ontario, Canada. A model of rational behaviour by landlords is then presented in which landlords choose simultaneously a rent for a standard lease and the quality of tenant to be accepted. Heterogeneity among landlords and tenants and imperfect information are introduced. The effect of security of tenure legislation on this behaviour is assessed. The paper then considers the difficulty of defining an unjustified rent increase when some tenants are more costly to serve than others and when the landlords have imperfect information about prospective tenants.

Suggested Citation

  • J.R. Miron, 1990. "Security of Tenure, Costly Tenants and Rent Regulation," Urban Studies, Urban Studies Journal Limited, vol. 27(2), pages 167-183, April.
    • Handle: RePEc:sae:urbstu:v:27:y:1990:i:2:p:167-183
    DOI: 10.1080/00420989020080151
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    References listed on IDEAS

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    1. Henderson, J Vernon & Ioannides, Yannis M, 1983. "A Model of Housing Tenure Choice," American Economic Review, American Economic Association, vol. 73(1), pages 98-113, March.
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    Cited by:

    1. Miceli, Thomas J. & Sirmans, C. F., 1999. "Tenant Turnover, Rental Contracts, and Self-Selection," Journal of Housing Economics, Elsevier, vol. 8(4), pages 301-311, December.
    2. Alex Anas & Richard Arnott, 2004. "Moving costs, security of tenure and eviction," Urban/Regional 0408005, University Library of Munich, Germany.
    3. Iwata, Shinichiro, 2002. "The Japanese Tenant Protection Law and Asymmetric Information on Tenure Length," Journal of Housing Economics, Elsevier, vol. 11(2), pages 125-151, June.
    4. Barker, David, 2003. "Length of residence discounts, turnover, and demand elasticity. Should long-term tenants pay less than new tenants?," Journal of Housing Economics, Elsevier, vol. 12(1), pages 1-11, March.
    5. Hubert, Franz, 1995. "Contracting with costly tenants," Regional Science and Urban Economics, Elsevier, vol. 25(5), pages 631-654, October.

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