Renter Protection and New Business Creation

47 Pages Posted: 7 May 2020 Last revised: 26 Dec 2020

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 renter protection encourages new business creation by reducing household vulnerability in home-rental markets. Passages of city-level just cause eviction ordinance in California are associated with a 9.6\% increase in the number of new small businesses, and a higher proportion of female and racial minority business owners. Local demand shocks and landlord investments are unlikely to explain the results. New firms created post passage tend to survive in the long run and perform no worse than other firms. Our evidence suggests that policies that protect renters against wrongful evictions benefit 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 Protection 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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