Tenant Rights, Eviction, and Rent Affordability

N. Edward Coulson, Thao Le, Victor Ortego-Marti and Lily Shen
Additional contact information
N. Edward Coulson: University of California, Irvine
Thao Le: Georgia State University
Lily Shen: Clemson University

No 202404, Working Papers from University of California at Riverside, Department of Economics

Abstract: We utilize state-level differences in the legal relationship between landlords and tenants to estimate their impact on rental housing affordability. We construct a Tenant Rights Index (TRI) spanning 1997 to 2016 to assess its effects on eviction rates and rental market outcomes. Increased TRI correlates with higher median rent, lower vacancy rates, and increased homelessness. To rationalize our findings, we develop a search and matching model of the rental market with free entry of both landlords and tenants, and an endogenous eviction mechanism. In our environment, more stringent eviction regulations reduce evictions and raise the relative demand for housing. However, stricter regulations also lead to higher rents and lower vacancy rates. We calibrate the model to the US rental market to quantitatively assess the mechanism in our model. An increase in eviction costs has a larger impact on the eviction rate and market tightness, with a relatively smaller effect on rents and vacancy rates. Our findings suggest that while stringent regulations may reduce evictions, they could lead to unintended consequences such as inflated house prices and heightened homelessness. Policymakers must carefully balance these potential drawbacks against the goal of tenant protection to avoid exacerbating existing housing affordability challenges.

Keywords: Tenant Rights; Eviction; Rent Affordability; Landlord-Tenant Laws (search for similar items in EconPapers)
JEL-codes: I38 K25 R13 R28 R31 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-dge, nep-law and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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