In contrast to most studies in the tenure choice literature, our model
confronts the agent with a continuum of tenure modes combining homeow
nership and tenancy. In principle, the hybrid tenure mode contract, wh
ile appearing in different forms, may be detected in various real esta
te markets around the world. In a two-period model with risky rent pri
ces, we thus derive conditions under which the risk-averse asset occup
ant is inclined to combine the two traditional tenure modes. (C) 1998
Academic Press.