DP16150 Airbnb and Rental Markets: Evidence from Berlin

Author(s): Tomaso Duso, Claus Michelsen, Maximilian Schaefer, Kevin Tran
Publication Date: May 2021
Keyword(s): Airbnb, housing market, rents, sharing economy, short-term rental regulation
JEL(s): R21, R31, R52, Z30
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16150

We exploit two policy interventions in Berlin, Germany, to causally identify the impact of Airbnb on rental markets. While the first intervention significantly reduced the number of high-availability Airbnb listings bookable for most of the year, the second intervention led to the exit of mostly occasional, low-availability listings. We find that the reduction in Airbnb supply has a much larger impact on rents and long-term rental supply for the first reform. This is consistent with more professional Airbnb hosts substituting back to the long-term rental market. Accordingly, we estimate that one additional nearby high-availability Airbnb listing crowds out 0.6 long-term rentals and, consequently, increases the asked square-meter rent by 1.8 percent on average. This marginal effect tends to be smaller in districts with a higher Airbnb density. However, these district experienced a larger slowdown in rent increases following the reform due to larger reductions in Airbnb supply.