Analysis of 'Airbnb Effect'

Airbnb rentals have been tied to raising housing prices and changing economic dynamics in many U.S. cities. A new study itemizes these local impacts to assess what value, if any, Airbnb brings these communities. 

Study author from the Economic Policy Institute Josh Bivens summarizes that for local legislators, “[The presence of Airbnb in a community] becomes a straight conflict between whose interests you care more about: long-term residents of the city, or those that visit it." The study suggests that cities need to start treating Airbnb like any other hotel business to "better align the costs and benefits," CityLab reports, rather than permitting the company to evade regulation and taxation.

For vacationers who want more options, at cheaper prices, Airbnb is great: Studies show that Airbnb expansion is correlated with lowered local hotel rates. And for renters who want to make an extra buck, it’s a welcome side hustle—Airbnb told USA Today that a proposed “whole home” short-term rental ban (requiring that owners be present and not rent the entire home) in New Orleans would “devastate” homeowners who depend on the platform. But even those benefits aren’t distributed equally, Bivens says. Airbnb “landlords” who own multiple properties (one for occupying and at least one for renting) likely have an advantage on the platform, he argues, because “any economic occurrence that provides benefits proportional to owning property is one that will grant these benefits disproportionately to the wealthy.”

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