Can Restricting Property Use Be Value Enhancing? Evidence from Short-Term Rental Regulation

41 Pages Posted: 27 Mar 2016 Last revised: 17 Aug 2017

See all articles by Jin-Hyuk Kim

Jin-Hyuk Kim

University of Colorado at Boulder

Tin Cheuk Leung

Wake Forest University

Liad Wagman

Illinois Institute of Technology - Stuart School of Business, IIT

Date Written: August 2017

Abstract

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

Kim, Jin-Hyuk and Leung, Tin Cheuk and Wagman, Liad, Can Restricting Property Use Be Value Enhancing? Evidence from Short-Term Rental Regulation (August 2017). Available at SSRN: https://ssrn.com/abstract=2755035 or http://dx.doi.org/10.2139/ssrn.2755035

Jin-Hyuk Kim

University of Colorado at Boulder ( email )

Campus Box 256
Boulder, CO 80309
United States

Tin Cheuk Leung

Wake Forest University ( email )

Winston-Salem, NC 27109
United States

Liad Wagman (Contact Author)

Illinois Institute of Technology - Stuart School of Business, IIT ( email )

565 W Adams St Suite 452
Chicago, IL 60661
United States
7739809883 (Phone)

HOME PAGE: http://lwagman.org

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