The Effects of Short-Term Rental Regulations: Evidence From the City of Santa Monica
Posted: 14 Feb 2019
Date Written: June 29, 2018
This paper studies the impacts of a specific regulation restricting short-term rental activity, the Home-Sharing Ordinance, adopted in the city of Santa Monica in May of 2015. It mainly focuses on carefully estimating how the ordinance has affected the number of housing units operating on Airbnb’s platform. Using a dataset of Airbnb listings in the area surrounding the city of Los Angeles, I find that the ordinance has reduced the number of entire homes listed on Airbnb in Santa Monica by approximately 61%. I also study the impacts of this regulation on the long-term rental market and I find no evidence of a significant effect of the ordinance on residential rents in Santa Monica. Lastly, I provide suggestive evidence of the extent to which the policy under study has had any effect on housing reallocation in the city.
Keywords: Short-Term Rentals, Home-Sharing, Airbnb, Housing Rents
JEL Classification: R31, L86, Z30
Suggested Citation: Suggested Citation