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II The Social Institutions of the Roman Rental Market T H E OWNERS Wealthy Romans tended to invest their surplus wealth in land, and especially in farmland; they did so in the hope of a regular return on investment of somewhere around 5-6 percent a year.1 While there is no doubt that agricultural land made up the bulk, nonetheless sufficient evidence survives to suggest that urban properties were also a part of the normal well-balanced portfolio.2 The economics of urban investment are brought home in a famous anecdote told by Aulus Gellius (NA 15.1.1-3) in the mid-second century A.D. A group of friends were accompanying the rhetor Antonius Julianus up the Cispian hill when they noticed a huge urban insula on fire; the conflagration threatened to engulf the whole neighborhood. One of the party observed that while the returns (reditus) from urban properties were high, the risks (pericula) were extremely high also;3 were it not for the continual fires at 1 See R. Duncan-Jones, The Economy of the Roman Empire (1974) 33 ff. (but on viticulture see p. 59); in general, M. I. Finley, The Ancient Economy (1973) 95-122, for the absence of "systematic, calculated policy" (p. 117) in these investments. 2 This point was recently emphasized by P. Garnsey, in Studies in Roman Property (ed. M. I. Finley, 1976) 123-132; see also H. Schneider, Wirtschaft und Politik (1974) 81-86. (Both authors may exaggerate the significance of urban investment.) 3 These risks included also the danger of collapse, much discussed 21 Social Institutions of the Roman Rental Market Rome, he would sell his farms and buy up urban properties. The group then discussed methods of fireproofing. High profits and high risks. It is not easy for us to determine what Gellius meant with these categories. No information from Rome survives on the relation between the value of developed property and the yearly return from rent; 8.6 percent per year, a figure found in a Greek oration of the fourth century B.C. (Isaeus 11.42; two houses), has the ring of possible truth but is too isolated. This rate, which is at least 43 percent higher than the probably usual return for farmland, would at constant rates return initial investment in about eleven-and-a-half years, or five years sooner than that for agricultural land.4 The crowded conditions at Rome may well have driven rents so high that the return was even greater. But more underlay the calculation in Gellius than appears at first sight. Above all, Roman investors sought secure return , not just high return;5 indeed, urban properties might well have been thought of as a hedge against the catastrophes that periodically rolled across the countryside.6 But there in legal texts. Gellius' fire may be compared with a fire under Antoninus Pius which destroyed 340 insulae et domus: SHA, Ant. Pius 9.1; for other sources on collapses and fires, see R. Pohlmann, Die Uebervolkerung der Antiken Grossstadte (1884) 110-112; L. Friedlander , Darstellungen aus der Sittengeschichte ROTHS (10th ed. 1922) 23-26; and L. Homo, Rome lmperiale et VUrbanisme (1951) 589-591; Z. Yavetz, Latomus 17 (1958) 500-517. An assessment of relative risk lies behind Cicero's remark on urban investment in Parod. Stoic. 51ยท, cf. O/f. 2.88. 4 T o put this in modern terms: if the purchase price of a new building (including land) was completely amortized over 30 years (scarcely an unreasonable estimate in view of Vitruv. 2.8.8-9), a n d if upkeep in this initial period was negligible (which is likely), a gross return of 8.6% of initial value would still have a higher net yield than the rent from a farm of equivalent worth that was not amortized. 5 On this characteristic of the ancient economy, see H. G. Kippenberg , in Seminar: Die Entstehung der Antiken Klassengesellschaft (ed. Kippenberg, 1977) 15-16, with earlier literature (esp. Weber). 6 Farm disasters are neatly catalogued in the juristic sources on 22 The Owners was a difference. A farm might remain unproductive for a year or two because of pestilence or plague; the farm villa might burn down; poor management might result in the necessity of considerable reinvestment for farm equipment and slaves (Plin. Ep. 9.37). But this was still minor beside the expense of entirely replacing an insula that unexpectedly collapsed or was gutted by fire. For urban...


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