Are Rents Excessive in the Central City?: A Geospatial Analysis
Scott W. Hegerty

TL;DR
This study analyzes the spatial distribution of rent-to-property-value ratios across 30 U.S. cities, revealing regional differences and examining socioeconomic factors, including race, influencing rent dynamics.
Contribution
It introduces a geospatial analysis of RPV ratios across multiple cities, highlighting regional patterns and the limited role of race in rent exploitation.
Findings
Higher median RPV in Rust Belt cities compared to West Coast cities
Racial characteristics often have opposite signs from expectations in RPV models
Little evidence of race-based exploitation of renters in the data
Abstract
In many U.S. central cities, property values are relatively low, while rents are closer to those in better-off neighborhoods. This gap can lead to relatively large profits for landlords, and has been referred to as "exploitaton" for renters. While much of this gap might be explained by risk, factors such as income and race might play important roles as well. This study calculates Census tract-level measures of the rent-to-property-value (RPV) ratio for 30 large cities and their surrounding metropolitan areas. After examining the spatial distribution of this ratio and relationships with other socioeconomic variables for Milwaukee and three other cities, Z-scores and quantiles are used to identify "extreme" RPV values nationwide. "Rust Belt" cities such as Detroit, Cleveland, and Milwaukee are shown to have higher median and 95% values than do West Coast cities such as Seattle and San…
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Taxonomy
TopicsHousing Market and Economics · Urban, Neighborhood, and Segregation Studies · Urbanization and City Planning
