Place-to-Place Rent Comparisons among Canadian Cities

摘要

This paper estimates average monthly gross rents for comparable rented private-sector accommodation in Census Metropolitan Areas across Canada. By “gross rent” is meant the typical monthly payment in a CMA for a principal residence by a tenant of given traits under the conditions of a standard lease to a for-profit landlord in competitive market equilibrium for premises used exclusively for accommodation, in an arm's length transaction, and includes heating and utility expenses where paid separately by the tenant. A single average gross rent is estimated for each city for dwellings and households, each with specified characteristics. This paper reviews the application of hedonic price models for this purpose, identifies shortcomings of current research in the field, and suggests a new form for such models. This new model is estimated using microlevel data from a sample of renter households taken across the twenty-three largest urban areas in Canada. A classical version of the model is fitted first to renter data for individual cities, and its limitations assessed. A measure of “relative supply” is introduced to help explain city to city variations in the hedonic prices. Then an all-city new model is estimated which incorporates relative supplies. This all-city model is then used to derive place-to-place rent comparisons.