On our way from Orvieto to Rome this afternoon, we stopped to explore the ancient ruins of the roman city Ostia, just 30 minutes or so out of Rome. Our article for today was an examination of the various options for accommodation in the city of Ostia throughout 3rd century B.C, a time when a large majority of the population lived in rented apartments. Unlike most housing markets that we are accustomed to today, the rental market was left to run its course without any significant governmental interference or regulation. Often today we see things such as rental price ceilings in large cities, subsidies for housing mortgage markets, or government owned housing, however this was not the case in Ostia. Instead, the government felt very little need to interfere in the housing market and only provided public housing in the case of extreme catastrophe.

There were essentially two options available, Cenacula, or apartment suites, and Deversoria which were essentially just rooms available for rent. The apartment suites were much like an apartment complex as we know it today. Landlords leased out each individual apartment within their suite and leasers were legally allowed to sublease rooms from their apartments to subletters. While walking around the ruins of the city, we were able to see lots of areas where such large apartment buildings existed. Though of course they were only partially there, it was cool to see their prevalence and strategic placement throughout the city. The Cenacula option was marketed more towards wealthier individuals or families because the lease agreements tended to be long, rent was expensive and payments were expected after periods of six months, instead of at the beginning as we now see today. This system relied heavily on the relationship between the landlord and his tenant as there was a fair amount of both risk and trust involved for the landlord with the contract.

            The second type of housing, Deversoria, housed more poor and lower class people and referred more generally to accommodations such as mezzanines, one or two bedroom flats, or the backrooms of the ground-floor shops in which people worked. The contract terms are less known, however because poorer people were less likely to be able to hold long leases and pay large lump sums of rent every six months, their contracts were probably much shorter. Further, often the landlord marketed his large building to an array of people, sometimes offering temporary rooms for travelers (like hotel rooms) or cheap, run down areas for more long term use. Rent was generally paid on a per night basis and for those who chose more decent quarters experienced a large increase in rent.  

            As you can imagine, this system led to an extremely inefficient rental market in Ostia. The rich paid more than they should have to compensate for the risk resulting from the longevity of their contracts, while ironically the poor also paid more because of the shortness of their contracts and the increased uncertainty and risk involved with renting to them. We found this to be interesting because often times, when governments do step in and begin to regulate or interfere in the market, it leads to inefficiencies as well. Particularly in the housing market, we can see shortages in the market as well as some “black market” activities in regards to rental properties. This forced us to wonder if there really is a right answer when inefficiency arises both with and without government intervention.