Who is my neighbour? Short-term renting and civic engagement in London

Urbanization has transformed cities into the economic hubs of high-income countries, yet concerns about declining social capital persist. This paper investigates the impact of changes in neighbourhood composition on social capital within London. I show how neighbourhoods with higher short-term renting penetration experience a reduction in charitable organizations and increased feelings of loneliness. These results cannot be attributed uniquely to a change of composition in the long-term residents, but they also reflect changes in the behaviours of residents. Moreover, I find that higher short-term renting penetration is associated with a decrease in neighbourhood quality.