Discussion paper

DP13094 Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles

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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Citation

Koster, H, J van Ommeren and N Volhausen (eds) (2018), “DP13094 Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles”, CEPR Press Discussion Paper No. 13094. https://new.cepr.org/publications/dp13094