How Much Are Short-Term Rentals to Blame for the Housing Crisis?

In an article for CNN, Samantha Delouya attempts to understand the nuanced impacts of the short-term rentals (STR) industry on housing markets around the country.

“Some critics say short-term rentals, which have exploded in popularity over the past decade as an alternative to hotels, should bear part of the blame for rent increases,” while others point out that the number of STRs is relatively small compared to the total unmet demand for housing in most U.S. regions.

When it comes to rent costs, “a 2019 paper in the Harvard Business Review found that a 1% increase in Airbnb listings is associated with only a minimal increase in rental rates at just 0.018%.” However, an analysis of Irvine, California, which banned STRs in 2018, shows a 3 percent drop in long-term rental costs.

While in some cases restrictions on Airbnb and other short-term rental platforms have helped lower housing costs, regulations have also backfired, ultimately harming the local economy. In Telluride, Colorado, an STR ban led to a drop in tourism, prompting complaints from local businesses and lodging owners. The city let the ban expire, opting instead to charge STR operators a fee whose proceeds will be invested in affordable housing, according to city officials.