DP13094 Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles
|Author(s):||Hans R.A. Koster, Jos van Ommeren, Nicolas Volkhausen|
|Publication Date:||July 2018|
|Date Revised:||December 2018|
|Keyword(s):||externalities, House Prices, regulation, short-term rentals, supply effects|
|Programme Areas:||Public Economics, International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=13094|
Online short-term housing rental platforms such as Airbnb have grown spectacularly in recent years. 18 out 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 residential property prices by 3%. Difference-in-difference estimates show that rents also decreased by 3%. These estimates imply large effects of Airbnb on property values in areas attractive to tourists (e.g. by 14% within 5km of Downtown LA).