Do the poor pay more for housing? Exploitation, profit, and risk in rental markets

Matthew Desmond, Nathan Wilmers

Research output: Contribution to journalArticle

9 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)1090-1124
Number of pages35
JournalAmerican Journal of Sociology
Volume124
Issue number4
DOIs
StatePublished - Jan 1 2019

All Science Journal Classification (ASJC) codes

  • Sociology and Political Science

Fingerprint Dive into the research topics of 'Do the poor pay more for housing? Exploitation, profit, and risk in rental markets'. Together they form a unique fingerprint.

  • Cite this