Monday, August 15, 2022

Effects of Airbnb restrictions on housing prices

 In an earlier post, we reported that Airbnb reduced rental housing price spikes, as when a convention comes to town.  An article (link) documents effects of what are called "Home-Sharing Ordinances," or HSO's, designed to prevent Airbnb from operating in a city:

Our first result is that HSOs are very effective in reducing Airbnb listings. The ordinances strongly reduced the number of Airbnb listings of entire properties and rooms by about 50% in the long run. We further show that room listings have not been reduced when offering rooms is still allowed, ... 
Our second result is that the HSO reduced house prices and rents by about 2% on average. ... Hence, the decision to implement an HSO is a political one, with a clear group of winners and losers ... : owners lose from HSO-induced house price reductions, whereas (long-term) renters benefit from lower rents.

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