Closing the Rent Index Gap – A Quantitative Approach to Rental‐Sector Gentrification

Abstract

This paper advocates for a greater emphasis on supply sided concepts such as the rent gap in the empirical operationalizations of gentrification. It provides a novel framework to identify rental‐sector gentrification areas through index construction by drawing on insights from the gentrification, rent gap, price index and hedonic regression literatures. The approach is highly adaptable to a variety of regulatory contexts and other housing market idiosyncrasies through the design of the underlying regression model. Drawing on data from the city of Vienna, local rent changes and their relationship to price‐effective transformations of the rental housing supply are quantified. After computing the respective indices, bivariate mapping is utilized to identify potential gentrification areas.

Bridging the Rent Gap: New Theoretical and Empirical Narratives

“…Similarly, Selim Banabak (2023) proposes an innovative method to measure changes in housing rent and applies it to Vienna, Austria. Whereas the previous paper by Sigler, Zou, Corcoran and Charles-Edwards (2023, this issue) assumes ground rent by observing the location relative to urban amenities, Banabak's method rests on an econometric model to separate ground rent changes from value increases due to properties' physical upgrades.…”