TENANCY RENT CONTROL AND CREDIBLE COMMITMENT IN MAINTENANCE

Under tenancy rent control, rents are regulated within a tenancy but not between tenancies. This paper investigates the e¤ects of tenancy rent control on housing quality, maintenance, and rehabilitation. Since the discounted revenue received over a …xed-duration tenancy depends only on the starting rent, intuitively the landlord has an incentive to spruce up the unit between tenancies in order to “show ” it well, but little incentive to maintain the unit well during the tenancy. The paper formalizes this intuition, and presents numerical examples illustrating the e ¢ ciency loss from this e¤ect