By Ron Bekkerman, Maxime C. Cohen, Edward Hung, John Maiden and Davide Proserpio
It’s well-know that one of the downsides of short-term rentals (STRs) is that they can reduce the availability of housing for long-term residents, this driving up both rents and house prices for locals. In a previous study, we found that home-sharing through Airbnb alone is responsible for about 20% of the average annual increase in U.S. rents, leading many policymakers to take an understandable aggressive approach to regulating STRs. For example, New Your City has made it outright illegal to rent an apartment for fewer than 30 days in most buildings.
However, while this short-term impact is well established, the longer-term impact of the last decade’s boom in STRs is less clear. Could the immediate harm of services like Airbnb to the local economy be offset or even outweighed by the long-term increase in demand they create?
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