The home-sharing service Airbnb may increase home prices and rental rates,
The Wall Street Journal reports from an as-yet unpublished working paper.
Between 2012 and 2016, researchers analyzed rents and home prices in the 100 largest metro areas. They found that a 10 percent increase in Airbnb listings leads to a 0.39 percent increase in rents and a 0.64 percent increase in home prices.
"That may sound minuscule, but between 2012 and 2016, rents rose by about 2.2 percent annually [on average in the 100 areas], so a 0.39 percent increase in that context isn't very small at all," study author Edward Kung, an assistant professor of economics at the University of California Los Angeles, told
The Wall Street Journal. Further, home prices rose by an average of about 4.8 percent annually in the 100 metro areas studied, he says.
Researchers believe Airbnb is having an influence on home prices and rental rates because it is “taking supply out of the long-term rental market, which caters to residents looking to rent permanent homes, and reallocates it to the short-term rental market, which caters to tourists or other temporary visitors,” Kung says. “This reduces the supply of long-term rental units and increases the price for residents looking for long-term housing. Home prices rise with rents. And above and beyond that simple relationship, Airbnb enables homeowners to generate income from their property, making their homes even more valuable.”
Researchers also found that in cities where Airbnb is seeing an uptick, there is a decrease in vacant homes for sale or rent. “So again, we saw a reallocation of housing stock,” Kung told
The Wall Street Journal.
Source: “How Airbnb Affects Home Prices and Rents,” The Wall Street Journal (Oct. 22, 2017)
