Tenant Protection, Temporal Vacancy and Frequent Reconstruction in the Rental Housing Market

In Japan, tenants are protected in the sense that owners must compensate them for evicting them against their will, while owners cannot foresee the intended tenure length of prospective tenants. If owners cannot specify the term of a lease, social inefficiency emerges: (i) detached houses owned by i...

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Veröffentlicht in:Real estate economics 2020-12, Vol.48 (4), p.1074-1095
Hauptverfasser: Suzuki, Masatomo, Asami, Yasushi
Format: Artikel
Sprache:eng
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Zusammenfassung:In Japan, tenants are protected in the sense that owners must compensate them for evicting them against their will, while owners cannot foresee the intended tenure length of prospective tenants. If owners cannot specify the term of a lease, social inefficiency emerges: (i) detached houses owned by individual households remain vacant for a certain period; (ii) alternatively, landlords’ newly constructed apartments, which are free from eviction risk, accommodate a large proportion of tenants; and (iii) the apartments are rebuilt frequently even though they remain viable. If a fixed‐term contract is available, only short‐term tenants choose it, and the information asymmetry is dissolved, realizing social efficiency.
ISSN:1080-8620
1540-6229
DOI:10.1111/1540-6229.12205