Rent Deregulation, Tenure Choice, and Real Estate Price Expectations
We study a natural experiment in the Czech Republic where the maximum regulated rent appreciation has depended explicitly on the price of real estate since 2007. We track the tenure choice of households from consumption surveys for subsequent years. Rent deregulation makes households in regulated apartments more likely to own real estate while the opposite is true for other renters and owners. The net present value of buying property vs renting is an increasing function of the real estate price appreciation for renters in regulated apartments. We use their tenure choice to generate the distribution of property price expectations.
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- Bas van der Klaauw & Udo Kock, 1999. "Evaluating Dutch Housing Market Regulation," Tinbergen Institute Discussion Papers 99-007/3, Tinbergen Institute.
- Raess, Pascal & von Ungern-Sternberg, Thomas, 2002. "A model of regulation in the rental housing market," Regional Science and Urban Economics, Elsevier, vol. 32(4), pages 475-500, July.
- Roistacher, Elizabeth A., 1992. "Rent regulation in New York City: Simulating decontrol options," Journal of Housing Economics, Elsevier, vol. 2(2), pages 107-138, June.