Housing Tenure,Welfare, and Distributional Effects of Short-Term Rental Platforms

Department: Finance

Speaker: Nicola Pavanini (University of Tilburg) 

Room: T004

Abstract

Cities restrict short-term rentals (STR) to protect residents, but which residents benefit
is unclear: a unit leaving STR can be let to a tenant or sold to an owner-occupier,
and who can buy depends on borrowing limits. We study Amsterdam’s 2017 60-
night Airbnb cap using listings linked to administrative records on households,
transactions and mortgages. Per standard deviation of exposure, the cap reduced
reservation days by 14% and house prices by 1.1%. We estimate an equilibrium
model with borrowing-constrained households, visitors, and landlords choosing
between STR, long-term rental and selling. Tightening the cap to 30 nights sends
three in four units leaving STR to owner-occupiers. Rents and prices fall by 5%,
and lower-income purchases rise most, a gain tighter loan-to-income limits partly
undo. Residents gain e1.6 billion, but landlords and visitors lose e4.9 billion.