طول مدت تخفیف اقامت، گردش مالی، و کشش تقاضا. آیا باید مستاجران بلند مدت پرداخت کمتری نسبت به مستاجران جدید داشته باشند؟

Previous academic work on rental contracts has predicted that landlords will attempt to minimize turnover costs by giving discounts to long-term tenants. If long-term tenants have less elastic demand than short-term tenants, however, landlords might prefer to give discounts to short-term tenants. A model is developed in this paper in which landlords take account of both turnover costs and demand elasticity. Evidence from a survey of apartment managers is consistent with the model and shows that length-of-residence discounts are less common than discounts on the first month’s rent for new tenants.

Landlords face a complex problem when they set rents. If tenants are identical, the problem is simply to determine the extent of a landlord’s market power, from which optimal monopoly rent can be calculated. Since tenants differ in important ways, the problem is more complex than this. The academic literature on rental contract lengths generally predicts that landlords will attempt to minimize turnover costs by charging long-term renters less rent than short-term renters.1 A weakness in this strategy that the academic literature has not addressed is that long-term tenants are likely to have less elastic demand than short-term tenants. Long-term tenants have made significant investments in their location, including building relationships with neighbors and local businesses, knowledge of the area, and perhaps an emotional attachment to their immediate location. These tenants are unlikely to move because of a small increase in rent. A prospective tenant of an apartment complex, however, often has no particular attachment to a single location. If many properties are similar, a small difference in rent could be the deciding factor in the prospective tenant’s location decision. A profit-maximizing landlord will attempt to exploit differences in demand elasticity by charging higher rent to tenants with less elastic demand.2 In this paper, a simple model of tenant demand is constructed and its implications are evaluated with survey data. In the model, tenants are divided into two groups, and the optimal rent charged to each group depends on relative demand elasticity and turnover costs. Section 2 describes this model, Section 3 discusses the results of a survey of apartment managers, and Section 4 concludes.

The models presented in Section 2 predict that properties with low turnover costs will charge long-term tenants higher rent than short-term tenants, assuming that the demand of short-term tenants is more elastic than that of long-term tenants. The level of turnover cost that leads to discounts for short-term tenants is close to the actual level of turnover costs. Turnover costs vary, so we should expect to find some properties with discounts for long-term residents, and others with discounts for short-term residents. A survey of apartment complexes finds evidence that is consistent with these models. The survey finds that that discounts for short-term residents are more common than discounts for long-term residents. Long-term tenants often make the case to landlords that they deserve lower rent because of their loyalty to a property, and because they have saved the landlord significant turnover costs. Some landlords do limit rent increases given to long-term tenants, and in some cases this results in long-term tenants paying rents that are significantly below market levels. It is likely that the cost of turnover is high for these landlords. For normal turnover costs, however, discounts for long-term renters may not be a profit-maximizing strategy. Most landlords appear to increase rents to market levels when tenants renew their leases, and many of those who do not do so give discounts on the first month’s rent to new tenants, resulting in overall similar rent between long-term and short-term tenants. Many landlords go further than this, raising rents for existing tenants to market levels and giving discounts to new tenants. Landlords do this because they know that their existing tenants like where they live, and are unlikely to move because of a rent increase. New tenants, however, have no attachment to any particular property, and will respond to small changes in rent. Data presented in IREM (2001) indicate that rents have risen faster than turnover costs for most properties in recent years, although the opposite is true for older properties and high-rise buildings. The models presented in Section 2 predict that if these trends continue, length-of-residence discounts will become less frequent and discounts for new residents will become more frequent. Lower moving costs and increased tenant mobility would result. Older properties and high-rise buildings, however, may increasingly offer length-of-residence discounts if turnover costs continue to rise faster than rents.