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Estimating the Vulnerability of Households to Rent Increases

Author

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  • Jin Man Lee
  • James Shilling
  • Janet Ge

Abstract

The paper examines the vulnerability of US households today (2020-2022) to the risk of rent increases compared to previous years, particularly 2007-2015. To measure vulnerability requires a normative framework. We follow the approach developed by Sinai and Souleles (2005). We find that households are more vulnerable to rent increases now than they were at the start of our sample period. Traditionally, owning a property has been the primary means of hedging against rising rent risk. However, not all households can afford this option. We propose that insurance contracts could provide an alternative solution for households to hedge against the risk of rising rents. Similar to renters insurance, which protects personal belongings, these contracts could offer protection against rent hikes.

Suggested Citation

  • Jin Man Lee & James Shilling & Janet Ge, 2025. "Estimating the Vulnerability of Households to Rent Increases," ERES eres2025_33, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2025_33
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    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2025-33
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    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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