Abstract
This paper presents an empirical result how the tenancy system has a restrictive effect on the supply in the rental housing market. First, the demand and supply functions of rental houses are derived by theoretical analysis on households budget equilibrium and the functions are estimated in rental housing market of Japan in 1988. Second, disincentive effect by the tenancy system on supplier of rental houses is estimated. Third, restrictive effect by the tenancy system is estimated in rental housing market equilibrium The floor area of rental houses will increase by15.6% and the rent will decrease by 19.5% by repeal of the tenancy system.
