Economy
If Location Is an Asset, High Rent Is ‘Saving’ for the Future
Calling all rent rationalizers: A new paper shows how your pricey neighborhood is a financial asset like any other.
Another month, another paycheck tossed into the bottomless craw of some shadowy rental management company. That’s what paying to live in expensive cities can feel like when you don’t own property.
Take heart, tenants: You are “saving” for the future by paying up in the present. That’s the optimistic rationalization—er, explanation—at the heart of a new working paper published this week by the National Bureau of Economic Research. It offers a somewhat counterintuitive framework for understanding housing choices and the financial trade-offs tied to them.