In recent years, conversations about short-term rental regulations have become inextricably intertwined with affordable and workforce housing issues.
Four in five elected officials/government staff (82.7%) indicated that affordable housing was an issue in their jurisdiction, according to the 2024 State of the Short-Term Rental Industry Report.
Banning or limiting STRs is often proposed as a solution to housing shortages and unaffordability. Still, multiple studies have indicated such restrictions do not offer the easy solution elected officials are after.
Take one of today’s most-watched cases: New York City. The Big Apple’s de-facto ban on STRs is getting its year one report card this month, and housing needs are just as dire as they were pre-ban (but hotels and nearby New Jersey have gotten a nice bump.)
One of the biggest issues with pinning housing issues on STRs is that it can delay finding effective solutions to the complicated multiple factors that drive housing prices and availability, exacerbating a problem we all want to solve.
Data can help untangle these complex supply equations. Here, we’ll explore some major studies on STRs and housing that offer helpful starting points. We’ll also learn how to get critical local data and hear from government officials about what has worked in several jurisdictions that have deployed successful strategies.
Studies on the housing crisis and Airbnb
The most recent studies found that STRs’ effect on housing shortages and prices was generally modest – varying according to location and local factors – and overshadowed by broader structural constraints on housing.
Structural constraints are ongoing, systematic factors resulting in imbalances between housing supply and demand, leading to higher prices and shortages, including:
- Restrictive zoning that prohibits multifamily housing
- Limits on the number of housing units per acre
- Maximum building heights
- Minimum lot sizes
- Lengthy and restrictive permit approval processes
- Land scarcity in urban areas
- Geographic barriers such as mountains, waterways, and protected land
- Inadequate infrastructure or access to public services
- High labor and material costs
- High property taxes, impact fees, and other fees
Key takeaways from housing studies and short-term rentals
According to a literature survey by AirDNA, studies on the relationship between STRs and the housing crisis started in 2016.
The one thing all of these studies show: While STRs’ effect on housing is more pronounced in tourism hot spots within destinations, factors other than STRs are responsible for the lion’s share of driving up prices and reducing housing availability across communities.
Government officials themselves back this up. In the 2024 State of the STR Industry study, they cited the top three negative impacts on their affordable housing supply as: the cost of building new housing, real estate values, and lack of space to build new housing.
Housing affordability solutions that work
Among various solutions government officials have tried to alleviate affordable housing shortages, they ranked the following three strategies as most effective:
- Opening new space to build new housing (55.3%)
- Supplementing the cost of, or otherwise incentivizing, the construction of new housing (50.5%)
- Creating more conducive zoning policies (45.6%)
Housing data elected officials need and where to find it
Regardless of how many studies exist, individual communities won’t find the information needed to make effective decisions because STRs’ effect depends on the local context.
Stakeholders need a clear understanding of their housing stock and STRs’ contribution to the local economy to make informed decisions on STRs and housing policy.
By taking a data-backed and local lens on short-term rentals and housing, communities can more effectively craft fair STR regulations and solve affordable housing challenges for all.