UC Berkeley

This dissertation studies key aspects of renting in the U.S.A. A defining feature of the U.S. rental market is its spatial segmentation. The vast majority of rental housing is concentrated in multifamily buildings, while most suburban single-family homes are owner-occupied. In the first two chapters, I examine how expanding the supply of rental housing in American suburbs affects residential segregation and household welfare across the wealth distribution. The first chapter leverages the entry of large-scale corporate single-family rental landlords as a supply shifter to empirically estimate how increasing rental availability affects the spatial sorting of heterogeneous households. I use property-level data on tenants, home prices, rents, and acquisition timing and find that corporate landlords reduce segregation by enabling lower-income, disproportionately non-White renters to move into neighborhoods where they cannot afford to own. In response, nearby incumbent households are more likely to move out, suggesting that they perceive renter neighbors as a disamenity. Corporate landlords expand rental supply, which lowers rents in neighborhoods where rentals were scarce and expensive. At the same time, they purchase existing owner-occupied homes and reallocate them to rentals, which reduces the supply of for-sale housing and raises home prices. The second chapter develops and estimates a quantitative spatial equilibrium model with segmented rental and ownership markets to assess the distributional consequences of increasing rental housing supply. Households face financial constraints on homeownership. Neighborhood amenities are endogenous because households exhibit preferences over the demographic composition of their neighborhood. Importantly, households may derive additional utility from owning a home relative to renting in the same location. Rental housing is supplied by landlords who face location-specific operating costs. High local costs lead to high rents relative to home prices and low rental supply relative to owner-occupied housing in equilibrium. Large-scale landlords operate by achieving local scale economies through geographic concentration. I estimate the strength of local scale economies from corporate landlords' increasing willingness to pay in acquisition markets. The quantified model reveals that rental reallocation driven by the entry of large-scale landlords benefits down payment-constrained households. However, it hurts the median household because they lose out on the non-pecuniary benefits of homeownership. Findings from the first two chapters highlight how financially constrained households depend on renting to access housing and neighborhoods. To support the most disadvantaged among them, the federal government provides rental assistance through the Housing Choice Voucher program. The third chapter examines whether landlords treat voucher recipients differently from market-rate tenants. Using unit-level administrative data on rents, tenants, and landlords, I find that landlords charge voucher tenants 6% more in rent and 7% more in deposits than comparable market-rate tenants for the same unit. Implementing repeat-rent and movers research designs, I find robust empirical evidence that landlords price discriminate against voucher tenants. The fourth chapter concludes.