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

Hans R.A. Koster; Jos van Ommeren; Nicolas Volkhausen

doi:10.1016/j.jue.2021.103356

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

Hans R.A. Koster, Jos van Ommeren^*, Nicolas Volkhausen

^*Corresponding author for this work

Research output: Contribution to Journal › Article › Academic › peer-review

Abstract

Online short-term rental (STR) platforms such as Airbnb have grown spectacularly. We study the effects of regulation of these 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 in house prices of 15% within 2.5km of Hollywood's Walk of Fame).

Original language	English
Article number	103356
Journal	Journal of Urban Economics
Volume	124
DOIs	https://doi.org/10.1016/j.jue.2021.103356
Publication status	Published - Jul 2021

Bibliographical note

Funding Information:
We thank Jan Brueckner, Guillaume Chapelle, David Gomtsyan, Eric Koomen, Robert Elliott, Stephen Sheppard, Mariona Ségu, as well as the seminar audiences at the Higher School of Economics (St. Petersburg), the Southwestern University of Finance and Economics (Chengdu), the 13th Meeting of the Urban Economic Association (New York), University of Birmingham, Paris School of Economics, and Zhejiang University (Hangzhou) for useful comments. Koster acknowledges the support of the HSE University Basic Research Program.

Publisher Copyright:
© 2021 The Author(s)

Copyright:
Copyright 2021 Elsevier B.V., All rights reserved.

Keywords

Externalities
Regulation
Short-term rentals
Souse prices
Supply effects

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.jue.2021.103356

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

abstract = "Online short-term rental (STR) platforms such as Airbnb have grown spectacularly. We study the effects of regulation of these 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{\textquoteright} 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 in house prices of 15% within 2.5km of Hollywood's Walk of Fame).",

keywords = "Externalities, Regulation, Short-term rentals, Souse prices, Supply effects",

author = "Koster, {Hans R.A.} and {van Ommeren}, Jos and Nicolas Volkhausen",

note = "Funding Information: We thank Jan Brueckner, Guillaume Chapelle, David Gomtsyan, Eric Koomen, Robert Elliott, Stephen Sheppard, Mariona S{\'e}gu, as well as the seminar audiences at the Higher School of Economics (St. Petersburg), the Southwestern University of Finance and Economics (Chengdu), the 13th Meeting of the Urban Economic Association (New York), University of Birmingham, Paris School of Economics, and Zhejiang University (Hangzhou) for useful comments. Koster acknowledges the support of the HSE University Basic Research Program. Publisher Copyright: {\textcopyright} 2021 The Author(s) Copyright: Copyright 2021 Elsevier B.V., All rights reserved.",

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month = jul,

doi = "10.1016/j.jue.2021.103356",

language = "English",

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AU - Volkhausen, Nicolas

N1 - Funding Information: We thank Jan Brueckner, Guillaume Chapelle, David Gomtsyan, Eric Koomen, Robert Elliott, Stephen Sheppard, Mariona Ségu, as well as the seminar audiences at the Higher School of Economics (St. Petersburg), the Southwestern University of Finance and Economics (Chengdu), the 13th Meeting of the Urban Economic Association (New York), University of Birmingham, Paris School of Economics, and Zhejiang University (Hangzhou) for useful comments. Koster acknowledges the support of the HSE University Basic Research Program. Publisher Copyright: © 2021 The Author(s) Copyright: Copyright 2021 Elsevier B.V., All rights reserved.

PY - 2021/7

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N2 - Online short-term rental (STR) platforms such as Airbnb have grown spectacularly. We study the effects of regulation of these 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 in house prices of 15% within 2.5km of Hollywood's Walk of Fame).

AB - Online short-term rental (STR) platforms such as Airbnb have grown spectacularly. We study the effects of regulation of these 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 in house prices of 15% within 2.5km of Hollywood's Walk of Fame).

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KW - Regulation

KW - Short-term rentals

KW - Souse prices

KW - Supply effects

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

Abstract

Bibliographical note

Keywords

UN SDGs

Access to Document

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