Current Rent Research Articles

Exploring influences shaping university students’ attitudes toward green buildings

Purpose This study aims to investigate university students’ awareness of green residences and the factors influencing their willingness to pay for living in such accommodations. Design/methodology/approach This mixed-methods research involved 493 participants from Louisiana State University, USA. Data were collected through a survey questionnaire distributed via departmental and collegiate administrators. Both descriptive and inferential statistical tools were used to analyze the data. Findings Moderate familiarity with green building concepts, alongside a high degree of interest in residing in a green building prevailed among participants. A substantial majority of the students, 79.8%, excluding homeowners (n = 63), would consider investing at least double their current rent. Influencing factors encompassed peer influence, alignment with personal values, proximity to campus, energy efficiency, cost savings, sustainable materials, a reduced environmental impact and comfort. Despite initial concerns about high costs, optimism was expressed concerning the normalization of green buildings in university housing in the future. Practical implications The findings are beneficial to housing administrators and real estate developers when applied to other university communities, guiding them in marketing strategies for sustainability initiatives. Originality/value The survey instrument served as a primer on green building literacy while also eliciting nuanced responses from participants. Questions regarding financial considerations offer unique insights for decision-makers, and the study design lays the foundation for future comprehensive investigations in this relatively underexplored area.

Rentierism, Capitalist Competition and Neoliberalism: Toward a Veblenian Synthesis

The aim of this article is to analyze theoretically the relationship between rents and capitalist competition. The central hypothesis is that the production of rents is a process endogenous to capitalist competition and expands itself throughout various dimensions of economic life. To this end, the different conceptions of rents (classical, neoclassical and Schumpeterian) will be reviewed, and an institutionalist perspective on rents as income from institutionally-created scarce assets will be presented. To make this point, the case of the TRIPS agreement in the WTO will be analyzed as an example of the relationship between capitalist markets and institutional creation of scarcity from which patent rents emerge. Finally, this view of rents will be used to provide a theoretical analysis of how neoliberalism endogenously deepens current rents and creates new ones.

COVID-19 and Its Effects on Rent Prices for the Hospitality Industry: An Economic Model for the Rebus Sic Stantibus Clause

The COVID-19 pandemic made hotels around the world to experience a huge drop in revenues as lockdowns restricted mobility. For many hotel operators, the rent of the building is one of the most important fixed costs. The Rebus Sic Stantibus clause allows judges to rule that changes can be made to the economic conditions of contracts when a supervening event, not foreseen by the parties, causes economic hardship. This paper analyses, considering different market structures and the degree of product differentiation, how the rent for hotel facilities agreed in long-term contracts will change if the clause is applied now, reducing by law current rents. JEL Classifications: K12, K22, D43, L83

Estimating fair rent increases after building retrofits: A max-min fairness approach

Residential building retrofits are one crucial instrument to reduce greenhouse gas emissions. Due to the high proportion of rental dwellings in Germany, one particular focus is on rental building retrofits. To increase the attractiveness of retrofits, landlords can charge a certain percentage of the investment amount in retrofitting on top of the current rent, i.e., a percentage-retrofitting-fee. This study applies a max-min fairness scheme to derive a model from estimating fair percentage-retrofitting-fees, including tenants, landlords, and society's environmental and economic interests. Additionally, this model includes the tenant's risk of uncertain energy bill savings after the retrofit, using expected utility theory. Further, two policy instruments, subsidies and environmental taxes, are included in the analysis and their impact on fair percentage-retrofitting-fees is derived. The results of a case study on the German retrofitting market show how the efficiency standard of the building and the investment amount in energy efficiency influence the fair percentage-retrofitting-fee. This study reveals that current regulations concerning percentage-retrofitting-fees are not fair for either the landlord or the tenant. Above that, we illustrate that the fair percentage-retrofitting-fee increases with either the height of the subsidies or the height of an emission tax rate.

Effect of Residential Property Location on Tenants’ Willingness to Pay in Akure, Nigeria

The study examined the effect of residential property location on tenants’ willingness to pay in Akure with a view to providing adequate information that would help in residential property investment decision making in the study area. A structured questionnaire was used in collecting data from the tenants of residential properties within the selected areas. Questionnaires were distributed to Two Hundred and Eighty Two Tenants of residential properties that were selected via simple random sampling method. One hundred and ninety six (196) were retrieved representing 69.50% of the sample selected. Data collected were analyzed using contingent valuation and binary logistic regression model. Result of data obtained revealed that 57.14% of the respondents responded positive willingness to pay for residential property location while 42.86% reported zero willingness to pay for residential property location. The study further showed the bid amount tenants were willing to pay for various improvements in the residential property location, 49.11% of the respondents are willing to pay between 5-10% above the current rent for traffic noise reduction. For provision of infrastructure such as good road, electricity and water supply, 30.36% of the respondents are willing to pay between 5-10% above the current rent. Factors that influence their willingness to pay for residential location includes length of stay in the property, marital status, age, occupation, income, rent, nearness to place of work, security, electricity supply and water supply amongst others. It was recommended that real estate property owners and developers should consider location critically before embarking on residential property building projects in order to yield optimum returns. Keywords: Residential Properties, Residential Properties Location, Tenants, Willingness to pay. DOI: 10.7176/EJBM/14-3-03 Publication date: February 28 th 2022

A Study on the Appropriate Rent of Restaurant Franchises Lease Small Commercial Real Estate in Korea

Purpose: The current rent payment structure only serves as a contract rent that does not take into account the tenant’s profits of the franchisee. Therefore, this study studies the appropriate value of tenants and lords as the operators of different businesses in the space of small commercial real estate. Research design, data, and methodology: In the case of the same franchise brand, the profit and loss structure of sales and franchisees differs depending on the region and the commercial area. Therefore, it is necessary to set the appropriate rent considering the profit and loss of the franchisee rather than judging the outward sales of the franchise as a measure of rent evaluation. So, to calculate the the appropriate rent, The wage income of each region was selected as a variable representing the expected income of the franchisee, and the weighted index was given to the difference, and the appropriate rent was calculated by adding the current rent. Results: If the appropriate rent By Region and industry is low in the proportion of negative (-), or has a positive (+) value, it is the case where the profit and loss of the franchisee business is good in the area. In these cases, the lords may consider rent increases, and it is necessary to focus on income returns separately from capital returns. Implications: The profit and loss level of franchisees By Region and industry derived from this study can be the business indicators of franchisees. The appropriate rent will be useful information that can be used for investors to implement win-win rental strategies or to refer to rent negotiations in relation to key franchise stores, even before investment or during the lease operation period.

Deteriorated aesthetics of external wall paint; the impact on rent and take-up of accommodation in a high-end housing estate

PurposeThe factors affecting housing rent and take-up had been largely examined in a cluster. This leaves a dearth of knowledge on the influences of other disparate factors, such as the aesthetics of the building facade. This paper examines the effects of a deteriorated external wall paint on the tenants, rent and take-up of housing located in a high-end housing estate in Akure, Nigeria. The logic is to examine the place of aesthetics among the general factors affecting take-up and rental prices.Design/methodology/approachData were collected through census from 133 respondents residing in houses with deteriorated external wall paint. It applied both descriptive and multinomial logistic regression (MLR) to analyse the data.FindingsFindings reveal that close to 60% of the respondents were psychologically affected by the visible deterioration of external wall paint. This translated to a significance reduction in rent compared with the rental prices of similar houses the appearance of which was not deteriorated. Generally, this study found that aesthetics paled into insignificance in the analysis of the general factors affecting housing take-up and rent. However, it ranked first when these were analysed on the structural characteristics of the house only. This is consistent with findings from the MLR parameter estimate, which shows that those who were psychologically affected are more likely to pay a 15% increase in their current rent to take up a similar house without paint deterioration.Practical implicationsThe findings of this study have implications on practice and theory. First, while the location mantra is a key determinant of rental prices in theory, in practice, rent on comparable houses could differ if the aesthetics of the external wall paint is compromised. This implies an avoidable loss of rent to the owner of a property who compromises the aesthetic quality of the external wall paint in a high-end location where affordability is arguably high. The implication on public authority is that a lower rent may have a negative implication on government revenue and specifically property tax which is normally based on market rent of a property.Originality/valueA novel quality of the study is that it separates the structural characteristics of a house from the general factors in order to examine the specific effect of deteriorated aesthetics of external wall paint on take-up and rent.

국공유재산 위탁개발에 의한 공공임대주택 임대료 저감 방안 연구: 재건축충당금 제안

The problem of affordable housing problem among young householders and newly-married households is rampant in Korea. Recently, the government announced plans to supply public housing based on entrustment projects through development of government property. This study analyzes the feasibility of the real project for effectiveness of the plan and proposes a reconstruction fund aimed at lowering the rent of public housing. The cash flow results showed that the net income was 700 million won considering the effective gross income of rent and entrustment fee, financial expense, and repair cost. The net income is then revert to the treasury. If it is appropriated to the reconstruction fund, it will decrease the subsequent construction financing, and then the decreased financial expense will in turn reduce the rent of public housing. Based on the result estimated through five scenarios of entrustment period, 34 years of entrustment period indicate that the reconstruction fund will halve its subsequent rent of public housing. The next rent would be 160,000won against the current rent of 375,000 won per household. The reconstruction fund is able to reduce other rent for an entrustment period above 38 years.

Housing features and rent: estimating the microstructures of rental housing

PurposeWhile consumers did not previously have information on detailed housing features via traditional media, such as magazines, nowadays, due to the progress in information technology, they can access detailed information on various housing features via housing information websites. Therefore, detailed housing features may affect current rents to some extent. This paper aims to identify the effects of detailed housing features on rent and on omitted variable bias in Tokyo, Japan.Design/methodology/approachThis paper applies the hedonic approach. To identify the effects of features which are not observed previously, we use a unique data set that contains various housing features and over 200,000 housing units. This data set enables to simulate the situations when the researcher cannot get some variables, and this simulation shows which variables cause omitted variable bias.FindingsThe analysis shows that housing features significantly influence housing rent. If significant housing feature variables are not included in the hedonic model, the estimated coefficients show omitted variable bias. Additionally, unit-specific features such auto-locking door can cause omitted variable bias on location-specific features such accessibility to downtown.Originality/valuesThis paper shows empirical evidence that detailed housing features can cause omitted variable bias on other features including variables which are often used in previous searches. The result from our unique data set can be a guide for variable selection to reduce omitted variable bias.

Why Have Chinese Reforms Come to a Halt? The Political Economic Logic of Unfinished Transformation

This study approaches the Chinese reform process from a political-economic point of view, focusing primarily on institutional changes. Besides revealing the main factors behind the different phases of the reforms, it argues that in the framework of the current authoritarian regime, vested interests work against the continuation of the reforms, making it impossible to fully establish the institutional framework of a market economy. Current rents and privileges also deter the elite from implementing serious political reforms, leading to a trap that prevents the completion of the transition process.

Natural Resources and Global Misallocation

Are production factors allocated efficiently across countries? To differentiate misallocation from factor intensity differences, we provide a new methodology to estimate output shares of natural resources based solely on current rent flows data. With this methodology, we construct a new dataset of estimates for the output shares of natural resources for a large panel of countries. In sharp contrast with Caselli and Feyrer (2007), we find a significant and persistent degree of misallocation of physical capital. We also find a remarkable movement toward efficiency during last 35 years, associated with the elimination of interventionist policies and driven by domestic accumulation. (JEL E22, E23, O13, Q21, Q31, Q32)

Management of and Economic Returns from Selected Fisheries in the Nordic Countries

There is potential to increase the economic returns in many fisheries by improving fisheries management. In this article, maximum and estimated current resource rents are analyzed using a standardized methodology for five case studies of fisheries with different management regimes: individual quotas (Norway), individual transferable quotas (Iceland), co-management (Denmark), vessel catch limits (Sweden), and tradable days-at-sea regulation (Faroe Islands). The Danish co-managed fishery had the highest estimated current rent, corresponding to 51% of landing value compared to a maximum rent of 62%. The Danish case was followed by the Icelandic ITQ fishery (estimated current 30%, maximum 66%), Faroese tradable days-at-sea (current 28%, maximum 55%), Swedish vessel catch limits (current 3%, maximum 74%), and Norwegian individual quotas (estimated current −22%, maximum 43%). Fishery characteristics other than management might influence the estimated resource rent, and the results are discussed in relation to biological sustainability. The method used across fisheries and countries for the estimation of the current economic rent, based on standardized opportunity costs of labor and capital, exaggerates the current positive rent for the ITQ fishery and the negative rent for the individual quota fishery.

The pungent smell of “red herrings”: Subsoil assets, rents, volatility and the resource curse

Brunnschweiler and Bulte (2008) [1,2] provide cross-country evidence that resource curse is a “red herring” once one corrects for endogeneity of resource exports and allows resource abundance to affect growth. Their results show that resource exports are no longer significant while value of subsoil assets has a significant positive effect on growth. But the World Bank measure of subsoil assets is proportional to current rents, and thus is also endogenous. Furthermore, their results suffer from an unfortunate data mishap, omitted variables bias, weakness of instruments, violation of exclusion restrictions and misspecification error. Correcting for these issues and instrumenting resource exports with values of proven reserves at the beginning of the sample period, there is no evidence for resource curse either and subsoil assets are no longer significant. However, the same evidence suggests that resource exports or rents boost growth in stable countries, but also make especially already volatile countries more volatile and thus indirectly worsen growth prospects. Ignoring the volatility channel may lead one to erroneously conclude that there is no effect of resources on growth.

The Pungent Smell of 'Red Herrings': Subsoil Assets, Rents, Volatility and the Resource Curse

Brunnschweiler and Bulte (2008) provide cross-country evidence that the resource curse is a “red herring” once one corrects for endogeneity of resource exports and allows resource abundance affect growth. Their results show that resource exports are no longer significant while the value of subsoil assets has a significant positive effect on growth. But the World Bank measure of subsoil assets is proportional to current rents, and thus also endogenous. Furthermore, their results suffer from an unfortunate data mishap, omitted variables bias, weakness of the instruments, violation of exclusion restrictions and misspecification error. Correcting for these issues and instrumenting resource exports with values of proven reserves at the beginning of the sample period; there is no evidence for the resource curse either and subsoil assets are no longer significant. However, the same evidence suggests that resource exports or rents boost growth in stable countries, but also make especially already volatile countries more volatile and thus indirectly worsen growth prospects. Ignoring the volatility channel, may lead one to erroneously conclude that there is no effect of resources on growth.

Gas Supply and EU–Russia Relations

Drawing on New Institutional Economics (NIE) theory, the article argues that EU energy policy towards Russia damages security of supply because it neglects the specific aims and propensities of Russia and Gazprom. EU Commission initiatives are based on the promotion of interdependence through market opening, favouring a policy of competition over security of supply. The reason for this focus is found in the EU's embedded inclination towards liberal markets. Russia, by contrast, has chosen suboptimal state control of natural resources over the frontier capitalism of the 1990s. Sustainability of the current rent based system and geopolitical considerations are essential to Russia and Gazprom. In this situation a pragmatic approach that aims at security of supply and security of demand seems to be more successful. In this approach, liberalisation of the market can only be a long-term goal.

Adjustment in Property Space Markets: Taking Long‐Term Leases and Transaction Costs Seriously

Markets for property space adjust only gradually because tenants and landlords are constrained by long‐term leases and transaction and information costs. Not only do rents adjust slowly, but space occupancy, which depends on historical rents, often differs from demand at current rent. This creates “hidden vacancies,” vacancies that will develop in the future if market rent and the space demand driver are unchanged. That is, if current rent is greater/lesser than average rent, then hidden vacancies are positive/negative. Moreover, because of hidden vacancies, open vacancies and rent are not mirror images of each other. Thus it is necessary to estimate both rental and vacancy rate adjustment processes. We do this using annual data for Stockholm offices during the 1977–2002 period and simulate the response of rent and vacancies (open and hidden) to an employment shock.

Accounting for Rents in the U.S. Atlantic Sea Scallop Fishery

The Current Rent Method II (CRMII) of environmental accounting was used to estimate resource rent and the asset value of resource biomass in the U.S. Atlantic sea scallop fishery during 1977-2002. High levels of surplus and profit masked negative asset values for about two decades, as low as -$100 million a year during 1989-91 after many years of resource depletion and degradation by the overcapitalized fishery. Regulatory policies implemented in 1994 involving limited entry, vessel effort quotas, and area closures fostered stock recovery and greatly improved resource accounts to where the value of the sea scallop asset has recently averaged $128 million. Despite these recent improvements, there is no evidence that asset value is growing at any benchmark interest rate. The importance of adjusting fishery resource accounts for inframarginal rent as well (as the value of vessel capital) is discussed, as are property rights to the resource income component of so-called producer surplus.

Green national income and expenditure

Distinguishing between national income and expenditure helps to shed light on some issues in green national accounting, including capital gains. Although their total is the same, different types of depreciation should be defined differently in the income and expenditure accounts. For example, there are two ways to define the depletion of non‐renewable resources. If depletion is defined as the resource rent, the unit value of the resource stock exceeds the current rent. If resource rent is viewed in terms of the resource’s contribution to national income, the stock can be valued at the current rent but depletion is less than resource rent. JEL classification: E20, Q30 Revenus et dépenses nationaux verts. Le fait de distinguer le revenu national et la dépense nationale aide àéclairer certains problèmes dans la comptabilité nationale verte, y compris en ce qui a trait aux gains de capitaux. Même si leur total est le même, différents types d’amortissement devraient être utilisés dans les comptes de revenus et de dépenses. Par exemple, il y a deux manières de définir l’épuisement des ressources non‐renouvelables. Si l’épuisement est défini par la rente sur la ressource, alors la valeur unitaire du stock de ressource est plus grande que la rente courante. Si la rente de la ressource est considérée comme la contribution de la ressource au revenu national, le stock peut être évalué au niveau de la rente courante, mais alors l’épuisement est moins que la rente de la ressource.

R&D investment and import competition in unionized industries

This paper investigates the effect of unionization on the flow of research and development (R&D) investment and import competition in US manufacturing industries. If the unions adopt a myopic strategy, they may attempt to maximize current rents, even if it reduces strategic R&D necessary to compete against imports. However, if unions are employment oriented and realize that R&D is essential to compete effectively against imports and reduce job losses for their members, they may favour a more co-operative strategy. This issue is empirically investigated at the industry level using data from 1975–1984. One of the main contributions of this study is the attempt to distinguish between strategic and non-strategic R&D. The results of this analysis indicate that depending on the extent of unionization, there is a significant amount of variation in the magnitude and direction of the impact of strategic R&D on import penetration. Supporting evidence also indicates that the union rent-seeking behaviour related to strategic R&D investments varies between import and export-competing industries.

The application of financial theory to the pricing of upward-only rent reviews

Traditional and discounted cash flow (DCF) methods of property appraisal do not deal adequately with the option nature of upward-only rent reviews. DCF techniques typically value the higher of the expected market level of rents after future rent reviews and the current rent. However, the expected level of income after a review is higher than either of these quantities because, assuming no voids, the distribution of rents is truncated at the current rent until the lease comes to an end. This feature exhibits the same financial characteristics as a fixed-income security with a call option to exchange the fixed income for the market rent if that is higher. An option pricing approach is developed for pricing this option and then an adjusted DCF method is developed. The option-pricing approach is an improvement on those previously published in the literature because it does not need to make the unrealistic assumption of perfect hedging. The DCF approach requires the input of a risk discount rate, and the option pricing approach requires a parameter which has to be estimated from other investment market data.