Effects of Short-Term Rentals on Local Housing Prices and Rents: A Literature Survey
Housing affordability has re-emerged as a chief concern to both policymakers and everyday homeowners in the United States.
Rapid growth since the beginning of the COVID-19 pandemic has driven real housing prices to a new all-time high. Naturally, policymakers are searching for a remedy, and restricting short-term rentals (STRs) is one proposed solution that has garnered attention.
This data-driven report examines the effects of the STR market on the corresponding long-term rental and housing market.
Here are some of the key takeaways:
- Initial literature that looked at New York and the entire U.S. found a large effect of 17% and 20% home appreciation due to STRs over a period of about a doubling of STR supply or about four years.
- Later studies that controlled for market popularity and other variables found a positive but much smaller effect of between 1–4% when looking at the entire market and concentrated in very specific touristic areas.
- Broad national studies find no detectable association between costs and STRs. In France, the relationship is only consistently found in Paris