Renter Protection and Entrepreneurship

We examine whether renter protection encourages entrepreneurship by reducing household vulnerability in home-rental markets. Passages of just cause eviction ordinance in three Californian cities are associated with a 9.6% increase in the number of new firms, and the increase is greater for firms owned by females and racial minorities. 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 entrepreneurship and job creation