Single-family rentals and neighborhood racial integration✰

Abstract

Neighborhood racial segregation continues to be a major social problem within America's metropolitan areas. One factor possibly accounting for segregation is the inability of minority households to afford housing in White neighborhoods, where housing units historically have been largely owner-occupied single-family homes. In recent years there has been a dramatic shift in the housing makeup of many of these neighborhoods, with single-family rentals increasing in share. Rentals lower the cost of neighborhood entry. Our results, which suggest that these rentals reduce neighborhood racial segregation for Blacks, support policies that seek to maintain and grow single-family rentals within White neighborhoods.