Working Paper: CEPR ID: DP13094
Authors: Hans Koster; Jos van Ommeren; Nicolas Volkhausen
Abstract: Online short-term rental (STR) platforms such as \textit{Airbnb} have grown spectacularly. We study the effects of STR-platforms on the housing market using a quasi-experimental research design. 18 out of 88 cities in Los Angeles County have severely restricted short-term rentals by adopting Home Sharing Ordinances. We apply a panel regression-discontinuity design around the cities' borders. Ordinances reduced listings by 50% and housing prices by 2%. Additional difference-in-differences estimates show that ordinances reduced rents also by 2%. These estimates imply large effects of Airbnb on property values in areas attractive to tourists (e.g. an increase of 15% within 5km of Hollywood's Walk of Fame).
Keywords: short-term rentals; house prices; regulation; supply effects; externalities
JEL Codes: R21; R31; Z32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Airbnb listings (Z30) | Housing prices (R31) |
| Implementation of home-sharing ordinances (HSOs) (R28) | Reduction in rents (R21) |
| Implementation of home-sharing ordinances (HSOs) (R28) | Reduction in the number of Airbnb listings (Z30) |
| Implementation of home-sharing ordinances (HSOs) (R28) | Decrease in housing prices (R31) |