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An examination of the impact of rent control on mobile home prices in California

  • Zheng, Diehang
  • Deng, Yongheng
  • Gordon, Peter
  • Dale-Johnson, David

This study examines the impact of rent control of mobile home parks in seven counties of California between 1983 and 2003. We assembled an extensive and timely data set and, thus, were able to test more carefully specified econometric models than had been employed in prior studies of California mobile-home rent control. We find that the nature of the rent control regime differentially impacts mobile home prices: the imposition of rigid rent control, rent control without vacancy decontrol, leads to higher growth rates in resale prices. While a flexible regime, or rent control with vacancy decontrol, results in lower growth rates in resale prices. This is consistent with economic theory, suggesting that the imposition of rigid rent control will lead to the capitalization of future rent savings when a coach is sold. That is, the buyer will not only pay for the coach but also for the net present value of the expected savings associated with the future legally constrained pad rent obligations to the landlord.

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Article provided by Elsevier in its journal Journal of Housing Economics.

Volume (Year): 16 (2007)
Issue (Month): 2 (June)
Pages: 209-242

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Handle: RePEc:eee:jhouse:v:16:y:2007:i:2:p:209-242
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622881

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  1. Olsen, Edgar O, 1972. "An Econometric Analysis of Rent Control," Journal of Political Economy, University of Chicago Press, vol. 80(6), pages 1081-1100, Nov.-Dec..
  2. Case, Karl E & Shiller, Robert J, 1989. "The Efficiency of the Market for Single-Family Homes," American Economic Review, American Economic Association, vol. 79(1), pages 125-37, March.
  3. Rapaport, Carol, 1992. "Rent Regulation and Housing-Market Dynamics," American Economic Review, American Economic Association, vol. 82(2), pages 446-51, May.
  4. Richard Arnott, 1995. "Time for Revisionism on Rent Control?," Journal of Economic Perspectives, American Economic Association, vol. 9(1), pages 99-120, Winter.
  5. Edward L. Glaeser & Erzo F. P. Luttmer, 2003. "The Misallocation of Housing Under Rent Control," American Economic Review, American Economic Association, vol. 93(4), pages 1027-1046, September.
  6. Early, Dirk W. & Olsen, Edgar O., 1998. "Rent control and homelessness," Regional Science and Urban Economics, Elsevier, vol. 28(6), pages 797-816, November.
  7. Masahiro Igarashi & Richard Arnott, 1993. "Rent Control, Mismatch Costs And Search Efficiency," Boston College Working Papers in Economics 214, Boston College Department of Economics.
  8. Murray, Michael P, et al, 1991. "Analyzing Rent Control: The Case of Los Angeles," Economic Inquiry, Western Economic Association International, vol. 29(4), pages 601-25, October.
  9. Alston, Richard M & Kearl, J R & Vaughan, Michael B, 1992. "Is There a Consensus among Economists in the 1990's?," American Economic Review, American Economic Association, vol. 82(2), pages 203-09, May.
  10. Yongheng Deng & John M. Quigley & Robert Van Order, . "Mortgage Terminations, Heterogeneity and the Exercise of Mortgage Options," Zell/Lurie Center Working Papers 322, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
  11. Malpezzi, Stephen, 1998. "Welfare analysis of rent control with side payments: a natural experiment in Cairo, Egypt1," Regional Science and Urban Economics, Elsevier, vol. 28(6), pages 773-795, November.
  12. Eric Clapham & Peter Englund & John M. Quigley & Christian L. Redfearn, 2004. "Revisiting the Past: Revision in Repeat Sales and Hedonic Indexes of House Prices," Working Paper 8594, USC Lusk Center for Real Estate.
  13. John M. Quigley, 1990. "Does rent control cause homelessness? taking the claim seriously," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 9(1), pages 89-93.
  14. Hirsch, Werner Z., 1988. "An inquiry into effects of mobile home park rent control," Journal of Urban Economics, Elsevier, vol. 24(2), pages 212-226, September.
  15. Moon, Choon-Geol & Stotsky, Janet G, 1993. "The Effect of Rent Control on Housing Quality Change: A Longitudinal Analysis," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 1114-48, December.
  16. Palmquist, Raymond B, 1980. "Alternative Techniques for Developing Real Estate Price Indexes," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 442-48, August.
  17. Gyourko, Joseph & Linneman, Peter, 1989. "Equity and efficiency aspects of rent control: An empirical study of New York City," Journal of Urban Economics, Elsevier, vol. 26(1), pages 54-74, July.
  18. Nagy, John, 1997. "Do Vacancy Decontrol Provisions Undo Rent Control?," Journal of Urban Economics, Elsevier, vol. 42(1), pages 64-78, July.
  19. Epple, Dennis, 1998. "Rent control with reputation: theory and evidence," Regional Science and Urban Economics, Elsevier, vol. 28(6), pages 679-710, November.
  20. Hirsch, Werner Z. & Rufolo, Anthony M., 1999. "The regulation of immobile housing assets under divided ownership1," International Review of Law and Economics, Elsevier, vol. 19(3), pages 383-397, September.
  21. Case, Bradford & Quigley, John M, 1991. "The Dynamics of Real Estate Prices," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 50-58, February.
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