The Effect of Home-Sharing on House Prices and Rents:
The Effect of Home-Sharing on House Prices and Rents:
Evidence from Airbnb
Abstract
Abstract
We assess the impact of home-sharing on residential house prices and rents. Using a dataset of Airbnb listings from the entire United States and an instrumental variables estimation strategy, we show that Airbnb has a positive impact on house prices and rents. This effect is stronger in zipcodes with a lower share of owner-occupiers, consistent with non-owner-occupiers being more likely to reallocate their homes from the long- to the short-term rental market. At the median owner-occupancy rate zipcode, we find that a one percent increase in Airbnb listings leads to a zero point zero one eight percent increase in rents and a zero point zero two six percent increase in house prices. Considering the median annual Airbnb growth in each zipcode, these results translate to an annual increase of nine dollars in monthly rent and one thousand eight hundred dollars in house prices for the median zipcode in our data, which accounts for about one fifth of actual rent growth and about one seventh of actual price growth. Finally, we formally test whether the Airbnb effect is due to the reallocation of the housing supply. Consistent with this hypothesis, we find that, while the total supply of housing is not affected by the entry of Airbnb, Airbnb listings increase the supply of short-term rental units and decrease the supply of long-term rental units.