Monday May 12, 2025, 11 am – 12 am.: 'An alpha in affordable housing' by Sven Damen (Uantwerpen)
Monday May 12, 2025
Room: S.C.460
Prinsstraat 13, 2000 Antwerp
Program:
Research paper presentation by Sven Damen (Uantwerpen).
An alpha in affordable housing by Sven Damen
Abstract:
Residential properties with the lowest rent levels provide the highest investment returns to their
owners. Using detailed rent, cost, and price data from the United States, Belgium, and The
Netherlands, we show that this phenomenon holds across housing markets and time. If anything,
low-rent units hedge business cycle risk. We also find no evidence for differential regulatory risk
exposure. We document segmentation of investors, with large corporate landlords shying away
from the low-tier segment possibly for reputational reasons. Financial constraints prevent renters
from purchasing their property and medium-sized landlords from scaling up, sustaining excess
risk-adjusted returns. Low-income tenants ultimately pay the price for this segmentation in the
form of a high rent burden.