Renter Housing Stability and New Business Creation

55 Pages Posted: 7 May 2020 Last revised: 28 Sep 2022

See all articles by Steven Chong Xiao

Steven Chong Xiao

University of Texas at Dallas - Naveen Jindal School of Management

Serena Wenjing Xiao

University of Texas at Dallas

Date Written: April 13, 2020

Abstract

We examine whether stronger renter rights encourage business creation by enhancing housing stability in home-rental markets. In California, passages of city-level just cause eviction ordinance increase the number of new businesses by 9.4% and the proportion of female (7.7%) and racial-minority business owners (11.4%). New firms created post-passage can survive in the long run and have better credit quality than other firms. Household-level evidence shows that renters are more likely than homeowners to pursue self-employment after law passages. Our evidence suggests that policies that protect renters against wrongful evictions benefit the local economy by promoting self-employment and job creation.

Keywords: Home Rental, Homeownership, Eviction, Entrepreneurship, Inequality

JEL Classification: L26, R28, R50, J16

Suggested Citation

Xiao, Steven Chong and Xiao, Serena Wenjing, Renter Housing Stability and New Business Creation (April 13, 2020). Available at SSRN: https://ssrn.com/abstract=3574364 or http://dx.doi.org/10.2139/ssrn.3574364

Steven Chong Xiao (Contact Author)

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

Serena Wenjing Xiao

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

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