Can Restricting Property Use Be Value Enhancing? Evidence from Short-Term Rental Regulation
41 Pages Posted: 27 Mar 2016 Last revised: 17 Aug 2017
Date Written: August 2017
Short-term rentals, where tourists stay at private residences, have become ubiquitous over the past decade. Many communities are divided over the tradeoffs between a property owner's rights and nuisance problems created by transient populations in residential neighborhoods. This paper empirically examines the effects of regulation restricting short-term rentals on property sales price, using a unique dataset and policy experiment from Anna Maria Island, Florida. We show that nonresident ownership of properties on the Island decreased following the rental regulation, and that the regulation decreased property values except in areas where the density of nonresident-owned properties in a neighborhood was quite high.
Keywords: Property rights, zoning laws, housing market, sharing economy
JEL Classification: K11, R31, R52
Suggested Citation: Suggested Citation