New Study Shows Airbnb at Least Partly Responsible for Higher Rents in Cities

Having trouble affording a place to live in Vancouver? You’re not alone, especially this time of year when students are on the lookout too. The city’s vacancy rates remains at a pitiful 0.6%, which is to say there are only 6 homes or apartments available for every 1,000 that exist. And goodness knows how many people are applying for those 6 spot, but line-ups and bidding wars aren’t unheard of these days.

Much of the blame for the crisis is being heaped on short-term rental agencies like Airbnb, no doubt due to a combination of anecdotal evidence, dissertationsmedia coverage, and studies on the relative profitability of Airbnb vs. traditional renting in Vancouver. Now a new analysis of 100 American cities ties Airbnb to soaring housing costs, with researchers finding that “for every 10 percent growth in Airbnb listings, a ZIP code’s average rent increased by 0.4 percent.”

Authors Kyle Barron, a research assistant in economics at MIT; Edward Kung, an assistant professor of economics at UCLA; and Davide Proserpio, an assistant professor of business at USC, analyzed data from 2012 and 2016 to consider a causal relationship between Airbnb growth and housing prices.

Previous research in cities with tight rental markets has found a link between Airbnb growth and increased housing costs. A study released last year by Keren Horn and Mark Merante found that Airbnb had a direct impact on increased housing prices in Boston.

Horn, who is an assistant professor of Economics at the University of Massachusetts, said hers and this new study are two of the first to find a causal relationship between Airbnb listings and housing prices, rather than just a correlation between the two.

While other cities around the world have jumped to help out their renting citizens by enacting tough regulations on short-term rental companies, Vancouver city council has been glacially slow in doing so. Despite a lot of hot air and talk, they’ve only proposed new regulations for short-term rentals. Public hearings on those proposals haven’t even happened yet and they have yet to even announce dates for them.

No big deal.

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