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Rent gap reloaded: Airbnb and the shift from residential to touristic rental housing in the Palma Old Quarter in Mallorca, Spain

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  • Ismael Yrigoy

Abstract

In light of the advent of Airbnb, rent gap theory can be helpful for understanding how tourist rentals affect residential rental housing. It is argued that on those properties currently rented to residents, rental payments are not only ‘actual ground rent’, but also ‘potential ground rent’. The shift from a residential to a touristic use of rental housing thereby creates a potential ground rent. Taking as a case study the Palma Old Quarter in Mallorca, Spain, this paper analyses the evolution of the stock, prices, and revenues of residential rentals vis-à -vis tourist rentals and finds that, because it is more profitable to rent to tourists than to residents, the number of houses listed on Airbnb has increased, housing affordability for residents has shrunk, and the threat of displacement has increased.

Suggested Citation

  • Ismael Yrigoy, 2019. "Rent gap reloaded: Airbnb and the shift from residential to touristic rental housing in the Palma Old Quarter in Mallorca, Spain," Urban Studies, Urban Studies Journal Limited, vol. 56(13), pages 2709-2726, October.
    • Handle: RePEc:sae:urbstu:v:56:y:2019:i:13:p:2709-2726
    DOI: 10.1177/0042098018803261
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    References listed on IDEAS

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    1. Steven C. Bourassa, 1993. "The Rent Gap Debunked," Urban Studies, Urban Studies Journal Limited, vol. 30(10), pages 1731-1744, December.
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    Cited by:

    1. Serhii Bardash & Oleksandr Sherstiuk, 2023. "Audit of the Tourist Rent Existence," Oblik i finansi, Institute of Accounting and Finance, issue 1, pages 5-16, March.
    2. Esposito, Alessandra, 2023. "Tourism-driven displacement in Naples, Italy," Land Use Policy, Elsevier, vol. 134(C).
    3. Jesús M. González-Pérez & Margarita Novo-Malvárez, 2022. "Ibiza (Spain) World Heritage Site: Socio-Urban Processes in a Touristified Space," Sustainability, MDPI, vol. 14(15), pages 1-20, August.
    4. Tomaso Duso & Claus Michelsen & Maximilian Schäfer & Kevin Ducbao Tran, 2021. "Airbnb and Rental Markets: Evidence from Berlin," Bristol Economics Discussion Papers 21/746, School of Economics, University of Bristol, UK.
    5. Mikołajewska-Zając, Karolina, 2023. "Airbnb's humanitarian aid during the war in Ukraine: Indispensability, dependence, and platform politics," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 24(2), pages 13-19.
    6. Seungbee Choi & Sunghwan Kim, 2024. "Impact of COVID-19 Pandemic on Airbnb Listings in New York City: Challenges and Opportunities for Urban Housing Sustainability," Sustainability, MDPI, vol. 16(20), pages 1-18, October.
    7. María Barrero-Rescalvo & Ibán Díaz-Parra, 2024. "Short-term rentals’ supply-side structure and the struggle for rent appropriation: Insights from Andalusia, Spain," Environment and Planning A, , vol. 56(2), pages 508-524, March.
    8. Katsinas, Philipp, 2021. "Professionalisation of short-term rentals and emergent tourism gentrification in post-crisis Thessaloniki," LSE Research Online Documents on Economics 108590, London School of Economics and Political Science, LSE Library.
    9. Thomas Sigler & David Wachsmuth, 2020. "New directions in transnational gentrification: Tourism-led, state-led and lifestyle-led urban transformations," Urban Studies, Urban Studies Journal Limited, vol. 57(15), pages 3190-3201, November.
    10. Agustin Cocola-Gant & Angela Hof & Christian Smigiel & Ismael Yrigoy, 2021. "Short-term rentals as a new urban frontier – evidence from European cities," Environment and Planning A, , vol. 53(7), pages 1601-1608, October.
    11. Martí Cors-Iglesias & María Belén Gómez-Martín & Xosé Antón Armesto-López, 2020. "Peer-to-Peer Accommodation in Rural Areas of Catalonia: Defining Typologies of Rural Municipalities," Sustainability, MDPI, vol. 12(15), pages 1-15, July.
    12. Ferreri, Mara & Sanyal, Romola, 2022. "Digital informalisation: rental housing, platforms, and the management of risk," LSE Research Online Documents on Economics 112794, London School of Economics and Political Science, LSE Library.
    13. José Fernandes & Pedro Chamusca & Rubén Lois & Helena Madureira & Juliano Mattos & Jorge Pinto, 2024. "Tourism-Led Change of the City Centre," Land, MDPI, vol. 13(1), pages 1-15, January.
    14. Helen X. H. Bao & Saul Shah, 2020. "The Impact of Home Sharing on Residential Real Estate Markets," JRFM, MDPI, vol. 13(8), pages 1-18, July.
    15. repec:diw:diwwpp:dp1890 is not listed on IDEAS
    16. Duso, Tomaso & Michelsen, Claus & Schaefer, Maximilian & Tran, Kevin Ducbao, 2024. "Airbnb and rental markets: Evidence from Berlin," Regional Science and Urban Economics, Elsevier, vol. 106(C).
    17. Agustin Cocola-Gant & Antonio Lopez-Gay, 2020. "Transnational gentrification, tourism and the formation of ‘foreign only’ enclaves in Barcelona," Urban Studies, Urban Studies Journal Limited, vol. 57(15), pages 3025-3043, November.
    18. Philipp Katsinas, 2021. "Professionalisation of short-term rentals and emergent tourism gentrification in post-crisis Thessaloniki," Environment and Planning A, , vol. 53(7), pages 1652-1670, October.
    19. Taylor Higgins & Federico Martellozzo & Filippo Randelli, 2023. "Airbnb and the City: Comparative Analysis of Short-Term Rentals policies in Florence (Italy)," Working Papers - Economics wp2023_10.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    20. Francesca Leccis, 2023. "Urban Regeneration and Touristification in the Sardinian Capital City of Cagliari, Italy," Sustainability, MDPI, vol. 15(5), pages 1-29, February.
    21. Moaaz Kabil & Mohamed Abouelseoud & Faisal Alsubaie & Heba Mostafa Hassan & Imre Varga & Katalin Csobán & Lóránt Dénes Dávid, 2022. "Evolutionary Relationship between Tourism and Real Estate: Evidence and Research Trends," Sustainability, MDPI, vol. 14(16), pages 1-19, August.
    22. Pere Mercadé-Melé & Fernando Almeida-García & Aitor Martinez-Garcia & Miquel Angel Coll-Ramis, 2023. "Hotel Rooftops as a Space for Consumption in Historic Centres: The Case Study of Palma (Spain)," Land, MDPI, vol. 12(3), pages 1-12, March.

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