TY - JOUR
T1 - Do the poor pay more for housing? Exploitation, profit, and risk in rental markets
AU - Desmond, Matthew
AU - Wilmers, Nathan
N1 - Funding Information:
Yajuan Si, Christina Tapiero, and Simone Zhang for feedback, data guidance, and research assistance. This research was supported by the Ford Foundation. Direct correspondence to Matthew Desmond, Department of Sociology, Princeton University, 153 Wallace Hall, Princeton, New Jersey 08544. E-mail: matthew.desmond@princeton.edu 2 These two theories of inequality can be traced back to the class concepts of Weber (who emphasized life chances) and Marx (who emphasized exploitation) (Sayer 1991; Wright 1992).
PY - 2019/1/1
Y1 - 2019/1/1
N2 - This article examines tenant exploitation and landlord profit margins within residential rental markets. Defining exploitation as being overcharged relative to the market value of a property, the authors find exploitation of tenants to be highest in poor neighborhoods. Landlords in poor neighborhoods also extract higher profits from housing units. Property values and tax burdens are considerably lower in depressed residential areas, but rents are not. Because landlords operating in poor communities face more risks, they hedge their position by raising rents on all tenants, carrying the weight of social structure into price. Since losses are rare, landlords typically realize the surplus risk charge as higher profits. Promoting a relational approach to the analysis of inequality, this study demonstrates how the market strategies of landlords contribute to high rent burdens in low-income neighborhoods.
AB - This article examines tenant exploitation and landlord profit margins within residential rental markets. Defining exploitation as being overcharged relative to the market value of a property, the authors find exploitation of tenants to be highest in poor neighborhoods. Landlords in poor neighborhoods also extract higher profits from housing units. Property values and tax burdens are considerably lower in depressed residential areas, but rents are not. Because landlords operating in poor communities face more risks, they hedge their position by raising rents on all tenants, carrying the weight of social structure into price. Since losses are rare, landlords typically realize the surplus risk charge as higher profits. Promoting a relational approach to the analysis of inequality, this study demonstrates how the market strategies of landlords contribute to high rent burdens in low-income neighborhoods.
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U2 - 10.1086/701697
DO - 10.1086/701697
M3 - Article
AN - SCOPUS:85062699915
VL - 124
SP - 1090
EP - 1124
JO - American Journal of Sociology
JF - American Journal of Sociology
SN - 0002-9602
IS - 4
ER -