Purdue research: The effect Airbnb bans have on rental markets

A trio of researchers, including Ralph Siebert, Purdue professor of economics and director of the online master’s program in economics at the Mitchell E. Daniels, Jr. School of Business, studied the impact Airbnb bans have on the long-term rental market. Their findings, which were published in a top economics journal, revealed Airbnb regulation policies could be helpful in reducing rents in cities and help mitigate concerns of housing affordability.

Article Title

Airbnb or not Airbnb? That is the question: How Airbnb bans disrupt rental markets

Authors

Michael Seiler, professor, Real Estate & Finance (College of William & Mary)

Ralph Siebert, professor, Economics

Liuming Yang, assistant professor, Real Estate (The Chinese University of Hong Kong)

Journal

Wiley, 2023

Full Article

Article Summary

This study focuses on legislative bans imposed on short-term rentals (STRs) and evaluates their effects on long-term rentals in Irvine, California. Researchers found that contract rental prices in the long-term rental market decreased by 3% within approximately two years after the enforcement of STR ordinance. The results are primarily driven by the supply side for long-term rentals. The decline in rents is more pronounced: (1) for long-term rental units that have similar property characteristics as those listed through Airbnb and (2) for those located in geographic areas with greater Airbnb exposure before the ban was enforced.