The Battle for Homes: Is Home Sharing Disrupting Rental or Housing Markets?
Posted: 20 Oct 2018
Date Written: September 1, 2018
We study the impact of home sharing on local rental and housing markets. Using a unique dataset from Airbnb, we leverage a quasi-experiment — a platform policy that caps the number of properties a host can manage in a city — to estimate the impact. We find that the policy was associated with a 2.6% decrease in local rents and a 0.3% decrease in home value. In addition, the price-to-rent ratio, defined as the home value divided by annual rent, increased by about 2.3%. This implies that home sharing has a greater impact on local rental markets than housing markets. In addition to the policy evaluation, further evidence shows that a 1% increase in Airbnb properties leads to a larger increase in rents than the home value in local markets. Our findings speak to the questions of whether and how home sharing affects affordable housing.
Keywords: Home sharing, Housing markets, Airbnb, Affordable housing, Synthetic control
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