Title of presentation: "Sticky Continuing Tenant Rents"

Authors: Joshua Gallin, Lara Loewenstein, Hugh Montag, Randal Verbrugge

Presentation Venue: Society for Economic Measurement Annual Conference, Atlanta, Georgia, 8/1-3/2024. https://sem-society.org/

Abstract: While much attention has been focused on new tenant rents, 
continuing tenant rents are more important for the dynamics of CPI shelter 
indexes. Besides their well-known stickiness, little else is known about these 
rents. This is the first study to use US CPI rent microdata, over 1999-2024, to 
do a deep-dive analysis of continuing tenant rents. Over this period, despite 
technological advances available to unsophisticated landlords, continuing 
tenant rents remained very sticky, with little cyclical variation even during the 
Financial Collapse or the pandemic; and declining mobility has made continuing 
tenant rents even more important drivers of the CPI since 2010. 
Unsurprisingly, the aggregate rent hazard function is downward-sloping. Unit-
level rent gaps---that is, the difference between the unit's actual rent and its 
hypothetical new-tenant rent---grow over a tenancy, indicating length-of-
residence discounts rather than sit discounts. Despite this, rent gaps are the 
most important driver of continuing tenant rent changes; other drivers of rents 
mainly influence new tenant rents. 

Notice: The conference presentation is available upon request. Contact author is Hugh Montag (Montag.Hugh@bls.gov).

Disclaimer: This presentation provides a summary of research results. The 
information is being released for statistical purposes, to inform interested 
parties, and to encourage discussion of work in progress. The presentation 
does not represent an existing, or a forthcoming new, official BLS statistical 
data product or production series.