For renters and home buyers alike, Airbnb ABNB, -0.70% is contributing to the affordability crunch seen in many housing markets across the country.
Short-term rentals via apps such as Airbnb contribute to housing shortages and rent increases, according to research published last week by Felix Mindl and Dr. Oliver Arentz, researchers at University of Cologne in Germany. They attributed 14.2% of overall rent increases to short-term rentals or 320 euros ($385) per year for new tenants.
“While a large proportion of hosts can be considered home sharers, we find an increasing proportion of providers who have developed a professional business model from short-term rentals,” Mindl said in a statement. “Professional short-term rentals are available to tourists throughout the year, and thus compete directly with long-term tenants, for whom the rooms are then no longer available.”
However, a spokesman for Airbnb took issue with such findings, and said the COVID-19 pandemic has created an untenable position for many households struggling to make ends meet, and renting out a room is one way to deal with that. “Countless families depend on Airbnb to pay their rent and stay in their homes, which has become even more important amidst the current crisis,” he said.
Still, the Economic Policy Institute, a progressive think tank, echoed the sentiments of the Cologne researchers last year. “Evidence suggests that the presence of Airbnb raises local housing costs. The largest and best-documented potential cost of Airbnb expansion is the reduced supply of housing as properties shift from serving local residents to serving Airbnb travelers, which hurts local residents by raising housing costs,” it said.
Sophie Calder-Wang, assistant professor of the real-estate department at The Wharton School in the University of Pennsylvania, published a study last August that found the “increased rent burden falls most heavily on high-income, educated, and white renters because they prefer housing and location amenities that are most desirable to tourists.”
Other studies, have attempted to put a more specific figure on rent and house-price increases that some analysts say are related to short-term rental sites.
A 2017 study published in the latest edition of the journal Marketing Science found that the number of Airbnb listings in a zip code was associated with increases in property prices and rental rates. “The increased ability to home-share has led to increases in both rental rates and house prices,” the researchers wrote in the study.
Researchers used data on all U.S. properties listed on Airbnb between 2012 and 2016, and analyzed the effects of these listings using data on rents and home values from Zillow. Based on the median growth in Airbnb listings nationally, the short-term rentals contributed to an annual increase of $9 in monthly rent and $1,800 in home prices for median zip code, the study’s authors found.
All told, Airbnb accounted for one-fifth of the actual rent growth and one-seventh of the actual home-price appreciated experienced nationwide. But housing markets with fewer renters and more homeowners saw a smaller Airbnb-related effect. The popularity of a destination was from a tourist’s perspective also appears to have played a role.
The researchers did acknowledge that more research is needed, “to achieve a complete welfare analysis of home-sharing. For example, home-sharing may have positive spillover effects on local businesses if it drives a net increase in tourism demand.”
The growing popularity of short-term rentals through platforms like Airbnb does show that the higher rates landlords can fetch on the vacation rental market has led some to convert their properties from long-term to short-term rentals, and that has shrunk the rental market, pushing prices higher, they added.
A spokesman for Airbnb said the financial aid that hosts receive should not be discounted from such studies. “The authors of this study, which is now outdated, agree that home sharing can provide important economic benefits for families and support smart rules that allow home sharing to continue,” he said.
The researchers from that Journal of Marketing study said that local lawmakers might be able to counteract the effects of Airbnb through targeted regulations.
“Regulations on home-sharing should (at most) seek to limit the reallocation of housing stock from long-term rentals to short-term rentals without discouraging the use of home-sharing by owner-occupiers,” they wrote.
One regulatory approach they suggested: Levy an occupancy tax solely on property owners who rent out an entire property for an extended period of time and requiring proof that property owners live in the homes they own to avoid the tax.
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