Dragging on multilisting: The reason why home-sharing platforms make long-term rental prices increase and how to fix it

Airbnb is the largest accommodation provider in the world. Its activity has lowered the cost of travelling, while providing owners of properties with a better way to monetize their idle assets. However, controversy has arisen due to the externalities created by home-sharing platforms, namely gentrification and touristification, that reduce livability of spaces affected by their activity. We look into the effect of Airbnb on long-term rental prices in the city of Madrid in 2019. We use Multilayer Perceptron (MLP) to analyze the data. Our findings indicate that, at the city level, long-term rental prices are mainly impacted by the distance of the district to the city center. This factor overrides the importance of the number of properties offered in home-sharing platforms. This speaks of long-term rental prices at the city level being governed by complex processes, in which the presence of homesharing platforms is not the dominant one. However, if we look closely at touristic hotspots, we find that the concentration of properties offered in home-sharing platforms and specifically the presence of multilistings affect long-term rental prices importantly. Based on our findings, we propose a tax framework to deal with the externalities caused by the disruption of home-sharing platforms.

Automated summary

The study found that long-term rental prices in the city of Madrid are mainly influenced by the distance of the district to the city center, with the number of properties offered in home-sharing platforms playing a minor role. However, in tourist hotspots, the concentration of properties and the presence of multiple listings on home-sharing platforms significantly impact long-term rental prices.