- Rack-rent
Rack-rent denotes two different concepts:
# an excessive or extortionate rent, or
# the full rent of aproperty , including both land and improvements.The second definition is equivalent to the
economic rent of the land plusinterest oncapital improvements plusdepreciation and maintenance -- the normal market rent of a property -- and is not inherently excessive or extortionate.Historically, however, rack-rent has often been a term of protest used to denote an unjustly excessive rent (the word "rack" evoking the medieval
torture device ), usually one paid by atenant farmer . The two conceptions of rack-rent both apply when excessive, extortionate rent is obtained by threat of eviction resulting in uncompensated dispossession of improvements the tenant himself has made. I.e., by charging rack-rent, thelandowner unjustly uses his power over the land effectively to confiscate, and then to charge the tenant interest and depreciation on, the capital improvements the tenant himself has made to the land and is expected to maintain. This sense of the term is economically meaningful, and distinct from the market rent.External links
[http://www.thefreedictionary.com/rack+rent Dictionary definition]
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