Short-term rentals and the housing market: Quasi-experimental evidence from Airbnb in Los Angeles *

Online short-term rental (STR) platforms such as Airbnb have grown spectacularly. We study the effects of regulation of these platforms on the housing market using a quasi-experimental research design. 18 out of 88 cities in Los Angeles County have severely restricted short-term rentals by adopting Home Sharing Ordinances. We apply a panel regression-discontinuity design around the cities' borders. Ordinances reduced listings by 50% and housing prices by 2%. Additional difference-in-differences estimates show that ordinances reduced rents also by 2%. These estimates imply large effects of Airbnb on property values in areas attractive to tourists (e.g. an increase in house prices of 15% within 2.5km of Hollywood's Walk of Fame).

Automated summary

Regulations restricting short-term rentals have significantly reduced the number of listings and decreased housing prices and rents by 2% in certain cities in Los Angeles County. The study also suggests that areas attractive to tourists may experience a significant increase in property values due to the effects of platforms like Airbnb.