Renter Housing Stability and New Business Creation
55 Pages Posted: 7 May 2020 Last revised: 28 Sep 2022
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: Suggested Citation