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Working Paper
Equilibrium Evictions
We develop a simple equilibrium model of rental markets for housing in which eviction occurs endogenously. Both landlords and renters lack commitment; a landlord evicts a delinquent tenant if they do not expect total future rent payments to cover costs, while tenants cannot commit to paying more rent than they would be able or willing to pay given their outside option of searching for a new house. Renters who are persistently delinquent are more likely to be evicted and pay more per quality-adjusted unit of housing than renters who are less likely to be delinquent. Evictions are never ...
Working Paper
Late Payment Fees and Nonpayment in Rental Markets, and Implications for Inflation Measurement: Theoretical Considerations and Evidence
tatistical agencies track rental expenditures for use in the national accounts and in consumer price indexes (CPIs). As such, statistical agencies should include late payment fees and nonpayment in rent. In the US context, late payment fees are excluded from the CPI. Ostensibly, nonpayment of rent is included in the US CPI; but its treatment is deficient, and we demonstrate that small variations in nonpayment could lead to large swings in shelter inflation, and might have played a role in the 2009 measured shelter inflation collapse. They didn’t: while the national nonpayment incidence is ...
Discussion Paper
After the Eviction Moratorium: How Are Renters Faring?
An estimated 2.7 million U.S. households received an eviction filing in 2018. When the COVID-19 pandemic hit in March 2020, a wave of federal, state, and local regulations halted the eviction process as renters coped with employment disruption and income loss. The federal eviction moratorium ended in August 2021, which raises the question: How have renters in the Fifth District been faring over the past year? Evidence suggests that evictions are increasing back to pre-pandemic levels but are not surging higher as some had feared. This post examines how renters in the Fifth District are faring ...
Working Paper
Late Payment Fees and Nonpayment in Rental Markets, and Implications for Inflation Measurement: Theoretical Considerations and Evidence
Accurate rent measurement is essential for constructing a consumer price index (CPI) and for measuring household welfare. Late payment fees and nonpayment of rent are common components of rental expenditures and thus belong in CPIs. Late payment fees are often excluded; we offer a novel critique. In the US CPI, nonpayment is ostensibly included, but, we show, severely undermeasured. Moreover, the manner of its inclusion renders the CPI extremely sensitive to nonpayment variations; we show how to fix this. Nonpayment undermeasurement suggests at least a +1 ppt overestimate in 2020 CPI shelter ...
Discussion Paper
Sheltering in Place? A Closer Look at Pandemic Rental Instability in Six Southeastern States
From a federal policy standpoint, the plan to stabilize renter households through the COVID-19 pandemic hinged on two actions: the implementation of a nationwide eviction moratorium and the disbursement of emergency rental assistance. This plan relied on four key expectations. First, a federal eviction moratorium was expected to prevent the displacement of renters during the pandemic. Second, it was anticipated that rental relief funds needed to quickly reach households in need to offset growing arrearages. Third, it was assumed that working members of renter households would resume their ...