Residential relocation decisions: The role of neighborhoods, housing tenure choice, and race

Despite evidence of significant variation in population mobility between neighborhoods, it is not clear why those residing in specific neighborhoods are more likely to relocate than others. This dissertation explores how neighborhoods where renters have chosen to live can influence their residential relocation decisions. Building on the dissatisfaction approach to residential mobility, it is assumed that the characteristics of the current neighborhood can determine renters' opportunities to find dwellings that they desire as well as the level of their satisfaction with the neighborhood amenities, and in turn, lead to different choices of residential relocation. To examine a dynamic interaction between neighborhood factors and such choices, this research relies on a unique dataset that matches the nationally-representative, longitudinal household data from the Panel Study of Income Dynamics to neighborhood-level data from the U.S. Census.;This dissertation complements prior research by estimating a full range of renters' relocation choices, including no move as well as inter- and intra-neighborhood moves. It also helps better understand differences in neighborhood determinants of residential relocation for renters making different housing tenure choices and by their race. Empirical contributions include accounting for the simultaneity between residential relocation and homeownership transition as well as recognizing potential correlations between neighborhood factors and the importance of their temporal change to residential relocation decisions.;This dissertation provides three important findings. First, resident renters may stay, move, and/or purchase homes within the neighborhood if owner-occupied housing is readily available in the neighborhood or if the racial and economic status of the neighborhood is relatively stable. Second, to realize the desire for homeownership, (potential) homebuyers may give up the desire for other neighborhood environment. While homeownership opportunities in the neighborhood significantly matter for relocation decisions of homebuyers, an increase in the share of blacks only increases the probability of residential relocation of continuing renters. Finally, renters' responsiveness to the racial composition of surrounding neighbors can significantly vary by its own race. White renters are more likely to relocate if they reside in the neighborhood with an increase in the share of the black population, but black renters may delay their residential relocation from predominantly black neighborhoods.;These findings shed light on the reasons for cross-neighborhood variation in population turnover. Neighborhoods lacking owner-occupied units or experiencing significant change in racial composition are likely to experience higher population turnover, which is associated with various neighborhood problems. At the individual level, an interaction between previous location choice and relocation decisions can have substantial welfare implications. Homebuyers may have to relocate if they have chosen to live in predominantly renter-occupied neighborhoods, and in turn, have to bear costs associated with relocation. On the other hand, black renters that have chosen to live in predominantly black neighborhoods may delay their relocation from these neighborhood that tend to be poorer, less safe, and racially segregated.