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

Author(s): Hans R.A. Koster, Jos van Ommeren and Nicolas Volkhausen

Publication Date: July 2018

Keyword(s): externalities, House Prices, regulation, short-term rentals and supply effects

Programme Area(s): International Trade and Regional Economics and Public Economics

Abstract: Online short-term rental (STR) platforms such as \textit{Airbnb} have grown spectacularly. We study the effects of STR-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 of 15% within 5km of Hollywood's Walk of Fame).

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Bibliographic Reference

Koster, H, van Ommeren, J and Volkhausen, N. 2018. 'Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13094