Housing unit maintenance and the mode of tenure
Abstract Empirical studies have demonstrated that owner-occupied housing units tend to be better maintained than rental units. This paper presents an economic model which explains the observations. It is shown that, under a set of perfect market assumptions, an owner-occupant will maintain his housing unit at a higher rate than will a landlord. The effects of changing tenure times, of changing incomes, and of transactions costs are analyzed and testable hypotheses are developed. While the model is applied only to housing, it is applicable to a wider class of durable goods which may either be rented or user owned.