Cross-Tenure Differences in Home Maintenance and Appreciation

Abstract

This paper investigates the relative maintenance levels of owner-and renter-occupied housing by examining their short- and long-run appreciation rates. We modify the standard repeat-sales estimation procedure to test whether owner-occupied housing appreciates faster than renter-occupied housing. This procedure holds constant all structural factors, except for aging; hence, appreciation is estimated net of physical depreciation (i.e., routine aging, deficient and deferred maintenance). We find only weak evidence to support the notion that long-term rates of appreciation (and maintenance levels) are substantially different between owner- and renter-occupied housing.