Konhee Chang

Large landlords substantially increased purchases of single-family homes in the U.S. South beginning in 2012. I find that households who are poorer and less-White than incumbent homeowners move into the homes that are converted to rentals. Neighborhood-level segregation decreases in the eight years following landlord-entry, while incumbents nearer new renters are more likely to move out. A spatial equilibrium model shows that rental reallocation is progressive: poor, financially-constrained households gain from renting in higher-amenity suburbs, while the median households lose because of homeownership preferences and endogenous disamenities. Rental housing supply shapes spatial inequality.