Miceli, Thomas J. <br/><br/>
Efficiency rents :  A new theory of the natural vacancy rate for rental housing 

 -  Journal of Housing Economics,  2013. 
 - 5 pages 
<br/><br/> KEYWORDS: Rent, vacancy rates 
<br/><br/> This paper adapts the theory of efficiency wages to explain the natural vacancy rate in rental housing markets. A positive vacancy rate provides landlords an incentive to invest in<br/>maintenance because if they fail to do so, some tenants will leave and the unit will sit vacant for a finite period of time. The resulting foregone rent will penalize landlords’ failure<br/>to maintain. Habitability laws, which have been enacted by states since the 1960s, provide a non-market penalty which lessens the need for market enforcement. Variation in these<br/>laws by state offers an opportunity to test the theory. 
<br/><br/><label>Subjects--Topical Terms: </label><br/>Private Rental