Abstract
This paper explores the effects of home-sharing platforms in general and Airbnb in particular on long-term rents at a neighborhood level. Using consumer-facing Airbnb data from ten neighborhoods located within large metropolitan areas in the U.S. between 2013-2017, as well as rental data from the American online real estate database company, Zillow, this paper examines the relationship between Airbnb penetration and long-term rents. The results indicate that the relationship is not as unanimous as once thought. Viewing the relationship at an aggregate level, an approach used by many researchers in the past, hides the complexities of the underlying effects. Rather, Airbnb’s impact on rental rates depends on a neighborhood's individual characteristics. This study also urges policy makers to create tailor-made solutions that help curb the negative impacts associated with the platform whilst still harnessing its economic benefits.
Highlights
The sharing, or gig-economy, defined here as a series of platforms that facilitate ‘the peer-to-peer-based activity of obtaining, giving, or sharing the access to goods and services’ (Hamari et al 2016, p. 2047)has seen tremendous rates of growth in the past decade and has become an integral part of our everyday lives
We found that both Airbnb densities have a significant and positive impact on the Zillow rent index
Employment rate and median salary have significant negative impacts on Zillow rent index in both models; the negative effect of total housing stock and the positive relationship between poverty level and residential rents are statistically significant in Model (2) only; the positive effect from number of listings in city and the percentage of workforce with higher education is significant in Model (1) only
Summary
The sharing, or gig-economy, defined here as a series of platforms that facilitate ‘the peer-to-peer-based activity of obtaining, giving, or sharing the access to goods and services’ (Hamari et al 2016, p. 2047)has seen tremendous rates of growth in the past decade and has become an integral part of our everyday lives. Airbnb takes great pain in hiding its operations from public view, leading to numerous accusations of tax evasion and an expanding list of third parties taking legal action against the platform. It even creates political tensions and is becoming a hotly debated area in urban development (McNeill 2016). These recent developments make it more important than ever to identify the platform’s effects in order to better check its future growth
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