Do short-term rental platforms affect housing markets? Evidence from Airbnb in Barcelona

The paper titled "Do short-term rental platforms affect housing markets? Evidence from Airbnb in Barcelona," published in the Journal of Urban Economics, explores the impact of Airbnb on housing markets in Barcelona. The authors—Miquel-Àngel Garcia-López, Jordi Jofre-Monseny, Rodrigo Martínez-Mazza, and Mariona Segú—analyze detailed data on rents, transaction prices, and posted prices using various econometric approaches. Their findings are significant in the context of rising urban tourism and housing affordability challenges across Europe.

The study reveals that Airbnb activity has a measurable impact on rents and housing prices in Barcelona. Specifically, for an average neighborhood with Airbnb listings, rents have increased by approximately 1.9%. Furthermore, transaction prices have risen by about 4.6%, and posted prices by 3.7%. In areas with high Airbnb activity, the effects are even more pronounced, with rents increasing by 7% and transaction prices by 17%.

To understand the implications of Airbnb on housing markets, the authors utilized a combination of panel fixed-effects models, instrumental variables, and event-study designs. They focused on neighborhoods with varying levels of Airbnb activity, employing a dataset that included individual-level data on second-hand apartment transactions from 2009 to 2017. The data were aggregated at the neighborhood level, encompassing 221 basic statistical areas (BSAs) in Barcelona.

The study highlights the rapid growth of urban tourism, with international tourist arrivals increasing significantly over the past few decades. In Barcelona, Airbnb has become one of the leading platforms for short-term rentals, accounting for a substantial share of the city’s rental market. The authors argue that while Airbnb provides homeowners with an additional income source and promotes decentralized tourism, it has also exacerbated housing affordability issues by reducing the supply of long-term rental units.

The findings underscore the need for local governments to consider regulatory measures for short-term rental platforms like Airbnb. As cities grapple with the dual pressures of tourism and housing challenges, the study suggests that policies aimed at limiting short-term rentals could play a crucial role in maintaining housing affordability and supporting sustainable urban living.

The research situates Barcelona within a broader context by comparing it to other major cities such as New York, Los Angeles, and Paris. Despite facing legal uncertainties regarding short-term rentals, Barcelona has a higher percentage of housing units listed on Airbnb compared to these cities. This discrepancy highlights the unique challenges faced by European cities, where the balance between tourism and housing sustainability is particularly delicate.

In summary, the study presents compelling evidence that short-term rental platforms like Airbnb significantly influence housing markets in Barcelona, leading to increased rents and prices. The research calls for careful consideration of policy responses to ensure that urban tourism does not compromise the affordability and sustainability of housing in European cities.