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The effects of residential landlord–tenant laws: New evidence from Canadian reforms using census data

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  • Clarke, Dylan R.
  • Gold, Daniel E.

Abstract

We study the consequences of landlord–tenant laws on quality and prices in the rental housing market. We use the staggered introduction of Canadian Residential Tenancy Acts to study the consequences of a landlord–tenant reform that reduced tenants’ litigation costs and improved their bargaining power through mandatory contractual terms. To do so, we employ the difference-in-differences approach to estimate the average treatment effect on a repeated-cross section of households, controlling for income and family structure in five cities. The estimates imply that the reform led to a decline of 2.2 percentage points in the probability of a major defect, with no measurable effect on rent prices or homeownership rates. The average treatment effects are concentrated within families with children, who face greater costs to moving in response to property damage. The results are consistent with a stylized model in which a reduction in litigation costs allows the tenant to more cheaply recover on damages when moving costs are high, with second-generation rent controls limiting increases in rent prices charged by the landlord.

Suggested Citation

  • Clarke, Dylan R. & Gold, Daniel E., 2024. "The effects of residential landlord–tenant laws: New evidence from Canadian reforms using census data," Journal of Urban Economics, Elsevier, vol. 140(C).
  • Handle: RePEc:eee:juecon:v:140:y:2024:i:c:s0094119024000019
    DOI: 10.1016/j.jue.2024.103631
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    Cited by:

    1. Konstantin A. Kholodilin, 2025. "The Impact of Governmental Regulations on Housing Market: Findings of a Meta-Study of Empirical Literature," Discussion Papers of DIW Berlin 2113, DIW Berlin, German Institute for Economic Research.

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    More about this item

    Keywords

    Urban economics; Law & economics; Landlord–tenant law; Rental housing supply; Property; Contracts; Torts; Litigation;
    All these keywords.

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K25 - Law and Economics - - Regulation and Business Law - - - Real Estate Law
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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