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On Minimum Rents: Part 2, A Modern Interpretation

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  • Alan W. Evans

    (Centre for Spatial and Real Estate Economics, Faculty of Urban and Regional Studies, The University of Reading, Whiteknights, (PO Box 219), Reading, Berkshire, RG6 2AW, UK, a.w.evans@reading.ac.uk)

Abstract

The idea that there might be some minimum rent below which a land-owner would not let to any tenant was put forward by Marx, but with little supporting argument. In this paper, it is shown that the modern concepts and analysis of transaction costs and monitoring costs can explain why such a minimum rent might exist. Further, that risk and uncertainty, coupled with the fact that tenancies are usually for some years, also provide an explanation for the reluctance of land- and property-owners to let at minimal rents. Some empirical evidence is cited, particularly the substantial rents which have to be paid to lay telecommunication cables across private land.

Suggested Citation

  • Alan W. Evans, 1999. "On Minimum Rents: Part 2, A Modern Interpretation," Urban Studies, Urban Studies Journal Limited, vol. 36(13), pages 2305-2315, December.
    • Handle: RePEc:sae:urbstu:v:36:y:1999:i:13:p:2305-2315
    DOI: 10.1080/0042098992430
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    References listed on IDEAS

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    7. Titman, Sheridan, 1985. "Urban Land Prices under Uncertainty," American Economic Review, American Economic Association, vol. 75(3), pages 505-514, June.
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    Cited by:

    1. Phipps, Alan G., 2008. "Reuses of closed schools in Windsor, Ontario," Socio-Economic Planning Sciences, Elsevier, vol. 42(1), pages 18-30, March.

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