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Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles

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  • Koster, Hans
  • van Ommeren, Jos
  • Volhausen, Nicolas

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).

Suggested Citation

  • Koster, Hans & van Ommeren, Jos & Volhausen, Nicolas, 2018. "Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles," CEPR Discussion Papers 13094, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13094
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    More about this item

    Keywords

    Short-term rentals; House prices; Regulation; Supply effects; Externalities;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • 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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