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Housing Deterioration, Housing Codes and Rent Control

The author is at La Trobe University

The life cycle of a dwelling unit is a succession of tenants, generally proceeding to lower-income groups, and a sequence of quality levels, generally ending in a dilapidated state. The process of tenant turnover mirrors a neighbourhood turnover process which is identified as contributing to antagonism between social classes. The paper develops an optimal control model of the housing life cycle and extends this model to incorporate housing codes and rent control. The efficacy of these two popular policy instruments is investigated with respect to the goal of encouraging housing stability and thus neighbourhood stability.

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