IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp15706.html
   My bibliography  Save this paper

Short-Term Rental Bans and Housing Prices: Quasi-Experimental Evidence from Lisbon

Author

Listed:
  • Gonçalves, Duarte

    (Pompeu Fabra University)

  • Peralta, Susana

    (Nova School of Business and Economics)

  • Pereira dos Santos, João

    (Queen Mary University of London)

Abstract

We estimate the causal impact of a 2018 zoning reform that banned new short-term rental registries in some parts of Lisbon. The short-term rental licence expires when the house is sold, hence the ban removes the option value of short-term renting a property. We rely on two administrative data sets on short-term rental registries and real estate transactions, complemented with Airbnb data on listings and prices. We employ a difference-in-differences estimation taking advantage of the spatial discontinuity in the ban. We document a spike in newly registered housing units, between the announcement and the implementation of the ban. The reform decreases real estate prices by 8%, mostly in two-bedroom dwellings, for which the price drops 20%. We conclude that heterogeneous effects are key to understanding the backlash against short-term rentals.

Suggested Citation

  • Gonçalves, Duarte & Peralta, Susana & Pereira dos Santos, João, 2022. "Short-Term Rental Bans and Housing Prices: Quasi-Experimental Evidence from Lisbon," IZA Discussion Papers 15706, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15706
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp15706.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Wojciech Kopczuk & David Munroe, 2015. "Mansion Tax: The Effect of Transfer Taxes on the Residential Real Estate Market," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 214-257, May.
    2. Elinder, Mikael & Persson, Lovisa, 2017. "House price responses to a national property tax reform," Journal of Economic Behavior & Organization, Elsevier, vol. 144(C), pages 18-39.
    3. Besley, Timothy & Meads, Neil & Surico, Paolo, 2014. "The incidence of transaction taxes: Evidence from a stamp duty holiday," Journal of Public Economics, Elsevier, vol. 119(C), pages 61-70.
    4. Hilber, Christian A.L. & Lyytikäinen, Teemu, 2017. "Transfer taxes and household mobility: Distortion on the housing or labor market?," Journal of Urban Economics, Elsevier, vol. 101(C), pages 57-73.
    5. Franco, Sofia F. & Macdonald, Jacob L., 2018. "Measurement and valuation of urban greenness: Remote sensing and hedonic applications to Lisbon, Portugal," Regional Science and Urban Economics, Elsevier, vol. 72(C), pages 156-180.
    6. Lyytikäinen, Teemu, 2012. "Tax competition among local governments: Evidence from a property tax reform in Finland," Journal of Public Economics, Elsevier, vol. 96(7-8), pages 584-595.
    7. Hans R. A. Koster & Jos van Ommeren, 2019. "Place-Based Policies and the Housing Market," The Review of Economics and Statistics, MIT Press, vol. 101(3), pages 400-414, July.
    8. Christoph Basten & Maximilian Ehrlich & Andrea Lassmann, 2017. "Income Taxes, Sorting and the Costs of Housing: Evidence from Municipal Boundaries in Switzerland," Economic Journal, Royal Economic Society, vol. 0(601), pages 653-687, May.
    9. Maximilian Schäfer & Kevin Ducbao Tran, 2020. "Airbnb, Hotels, and Localized Competition," Discussion Papers of DIW Berlin 1889, DIW Berlin, German Institute for Economic Research.
    10. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    11. David H. Autor & Christopher J. Palmer & Parag A. Pathak, 2014. "Housing Market Spillovers: Evidence from the End of Rent Control in Cambridge, Massachusetts," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 661-717.
    12. Lyytikäinen, Teemu & Hilber, Christian A. L., 2013. "Housing transfer taxes and household mobility: Distortion on the housing or labour market?," Working Papers 47, VATT Institute for Economic Research.
    13. Kyle Barron & Edward Kung & Davide Proserpio, 2021. "The Effect of Home-Sharing on House Prices and Rents: Evidence from Airbnb," Marketing Science, INFORMS, vol. 40(1), pages 23-47, January.
    14. Horn, Keren & Merante, Mark, 2017. "Is home sharing driving up rents? Evidence from Airbnb in Boston," Journal of Housing Economics, Elsevier, vol. 38(C), pages 14-24.
    15. Michael Carlos Best & Henrik Jacobsen Kleven, 2018. "Housing Market Responses to Transaction Taxes: Evidence From Notches and Stimulus in the U.K," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(1), pages 157-193.
    16. Rebecca Diamond & Tim McQuade, 2019. "Who Wants Affordable Housing in Their Backyard? An Equilibrium Analysis of Low-Income Property Development," Journal of Political Economy, University of Chicago Press, vol. 127(3), pages 1063-1117.
    17. Koster, Hans R.A. & van Ommeren, Jos & Volkhausen, Nicolas, 2021. "Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles," Journal of Urban Economics, Elsevier, vol. 124(C).
    18. Tomaso Duso & Claus Michelsen & Maximilian Schäfer & Kevin Ducbao Tran, 2020. "Airbnb and Rents: Evidence from Berlin," Discussion Papers of DIW Berlin 1890, DIW Berlin, German Institute for Economic Research.
    19. Hilber, Christian A.L. & Lyytikäinen, Teemu & Vermeulen, Wouter, 2011. "Capitalization of central government grants into local house prices: Panel data evidence from England," Regional Science and Urban Economics, Elsevier, vol. 41(4), pages 394-406, July.
    20. Christian A. L. Hilber & Teemu Lyytikäinen, 2012. "The Effect of the UK Stamp Duty Land Tax on Household Mobility," SERC Discussion Papers 0115, Centre for Economic Performance, LSE.
    21. Yinger, John, 1982. "Capitalization and the Theory of Local Public Finance," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 917-943, October.
    22. Benjamin Edelman & Michael Luca & Dan Svirsky, 2017. "Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment," American Economic Journal: Applied Economics, American Economic Association, vol. 9(2), pages 1-22, April.
    23. Franco, Sofia F. & Santos, Carlos Daniel, 2021. "The impact of Airbnb on residential property values and rents: Evidence from Portugal," Regional Science and Urban Economics, Elsevier, vol. 88(C).
    24. Sebastien Bradley, 2017. "Inattention to Deferred Increases in Tax Bases: How Michigan Home Buyers Are Paying for Assessment Limits," The Review of Economics and Statistics, MIT Press, vol. 99(1), pages 53-66, March.
    25. Slemrod, Joel & Weber, Caroline & Shan, Hui, 2017. "The behavioral response to housing transfer taxes: Evidence from a notched change in D.C. policy," Journal of Urban Economics, Elsevier, vol. 100(C), pages 137-153.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Calum Robertson & Sylvain Dejean & Raphaël Suire, 2023. "“Airbnb in the City”: assessing short-term rental regulation in Bordeaux," Post-Print hal-04123595, HAL.
    2. Pereira dos Santos, João & Strohmaier, Kristina, 2024. "All That Glitters? Golden Visas and Real Estate," IZA Discussion Papers 16857, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Susana Peralta & João Pereira dos Santos & Duarte Gonçalves, 2020. "Do short-term rentals increase housing prices? Quasi-experimental evidence from Lisbon," GEE Papers 0155, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jul 2020.
    2. Essi Eerola & Oskari Harjunen & Teemu Lyytikäinen & Tuukka Saarimaa, 2019. "Effects of Housing Transfer Taxes on Household Mobility," CESifo Working Paper Series 7750, CESifo.
    3. Eerola, Essi & Harjunen, Oskari & Lyytikäinen, Teemu & Saarimaa, Tuukka, 2021. "Revisiting the effects of housing transfer taxes," Journal of Urban Economics, Elsevier, vol. 124(C).
    4. Kunka Petkova & Alfons J. Weichenrieder & Alfons Weichenrieder, 2017. "Price and Quantity Effects of the German Real Estate Transfer Tax," CESifo Working Paper Series 6538, CESifo.
    5. Daniel Borbely, 2021. "Limiting the distortionary effects of transaction taxes: Scottish stamp duty after the Mirrlees Review," Fiscal Studies, John Wiley & Sons, vol. 42(2), pages 265-290, June.
    6. Christofzik, Désirée I. & Feld, Lars P. & Yeter, Mustafa, 2020. "Heterogeneous price and quantity effects of the real estate transfer tax in Germany," Freiburg Discussion Papers on Constitutional Economics 20/10, Walter Eucken Institut e.V..
    7. Manning Clifford & John Freebairn, 2021. "Stamp duty and equity in Australia," Melbourne Institute Working Paper Series wp2021n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    8. Divya Singh, 2020. "Do Property Tax Incentives for New Construction Spur Gentrification? Evidence from New York City," 2020 Papers psi856, Job Market Papers.
    9. Daniel Jonas Schmidt, "undated". "Property transfer taxes, residential mobility, and welfare," Tinbergen Institute Discussion Papers 22-042/VI, Tinbergen Institute.
    10. Daniel Borbely, 2018. "Limiting the distortionary impacts of transaction taxes: Scottish stamp duty after the Mirrlees Review," Working Papers 1817, University of Strathclyde Business School, Department of Economics.
    11. Christian A. L. Hilber & Olivier Schoni, 2022. "Housing policy and affordable housing," CEP Occasional Papers 56, Centre for Economic Performance, LSE.
    12. Elinder, Mikael & Persson, Lovisa, 2017. "House price responses to a national property tax reform," Journal of Economic Behavior & Organization, Elsevier, vol. 144(C), pages 18-39.
    13. Bev Dahlby & Braeden Larson, 2019. "Should Alberta Adopt a Land Transfer Tax?," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 12(5), February.
    14. repec:cty:dpaper:(18/06 is not listed on IDEAS
    15. Thiess Büttner, 2017. "Welfare Cost of the Real Estate Transfer Tax," CESifo Working Paper Series 6321, CESifo.
    16. Broulíková, Hana M. & Huber, Peter & Montag, Josef & Sunega, Petr, 2020. "Homeownership, mobility, and unemployment: Evidence from housing privatization," Journal of Housing Economics, Elsevier, vol. 50(C).
    17. Koster, Hans R.A. & van Ommeren, Jos & Volkhausen, Nicolas, 2021. "Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles," Journal of Urban Economics, Elsevier, vol. 124(C).
    18. Elisabeth Arnold & Katharina Falkner & Margit Schratzenstaller & Franz Sinabell, 2023. "Auswirkungen des Flächenverbrauchs für die Versorgungssicherheit und steuerliche Instrumente zu dessen Eindämmung," WIFO Studies, WIFO, number 71122, March.
    19. Ghent, Andra C., 2021. "What’s wrong with Pittsburgh? Delegated investors and liquidity concentration," Journal of Financial Economics, Elsevier, vol. 139(2), pages 337-358.
    20. Terviö, Marko & Määttänen, Niku, 2017. "Welfare Effects of Housing Transaction Taxes," CEPR Discussion Papers 12551, C.E.P.R. Discussion Papers.
    21. zu Ermgassen, Sophus & Drewniok, Michal & Bull, Joseph & Walker, Christine Corlet & Mancini, Mattia & Ryan-Collins, Josh & Serrenho, André Cabrera, 2022. "A home for all within planetary boundaries: pathways for meeting England’s housing needs without transgressing national climate and biodiversity goals," OSF Preprints 5kxce, Center for Open Science.

    More about this item

    Keywords

    Airbnb; policy analysis; housing market; short-term rental; Portugal;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp15706. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.