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).
|Journal||Journal of Urban Economics|
|Publication status||Published - Jul 2021|
Bibliographical noteFunding 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.
© 2021 The Author(s)
Copyright 2021 Elsevier B.V., All rights reserved.
- Short-term rentals
- Souse prices
- Supply effects