Tenure tipping

In light of the increased importance of the single family rental market, local policymakers and homeowners associations have expressed concern that neighborhoods might turn over, rapidly or otherwise, from largely owner-occupied homes to rental occupied properties. We construct a theoretical model of tenure tipping and employ the methods of Card et al. (2008, CMR) to understand the nature of this type of neighborhood turnover. The CMR model demonstrates that tenure tipping is observed only in the 1990s and 2000s (and not in earlier decades). However, this is not tipping in the traditional sense, since robustness checks indicate that tipping is only observed in more rapidly growing neighborhoods. In the 2000s in particular, this is congruent with investors in single family rentals geographically concentrating their investments in neighborhoods with sufficiently high initial rental share.