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Regulating Airbnb: how cities deal with perceived negative externalities of short-term rentals

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  • Shirley Nieuwland
  • Rianne van Melik

Abstract

In recent years, home-sharing platform Airbnb has developed into a major player in the tourism sector. It allows tourists to have authentic, off-the-beaten-track experiences in neighbourhoods previously unvisited. Although neighbourhoods can profit from increased attention and income, Airbnb and other short-term rentals (STRs) can also be disruptive to the traditional lodging industry and trigger gentrification processes; housing affordability and availability are jeopardized when housing units are turned into vacation rentals. Local governments worldwide are struggling to regulate STRs and their negative externalities. This paper focuses on key challenges cities face when dealing with STR platforms and the rationale behind different regulatory approaches. It first compares policies of 11 European and American cities and then zooms in on Denver to see how it regulates the impact of Airbnb. Most cities are relatively lenient towards STRs, with little to no (complete) prohibition. Instead, they limit the number of guests, nights and times a property can be rented, demand certain safety precautions and information provision, or require primary residency. Regulations are mostly directed to mitigate neighbourhood impacts, rather than creating a level playing field for the traditional lodging industry. Enforcement remains difficult due to the STR market’s dynamic nature and online practice.

Suggested Citation

  • Shirley Nieuwland & Rianne van Melik, 2020. "Regulating Airbnb: how cities deal with perceived negative externalities of short-term rentals," Current Issues in Tourism, Taylor & Francis Journals, vol. 23(7), pages 811-825, April.
  • Handle: RePEc:taf:rcitxx:v:23:y:2020:i:7:p:811-825
    DOI: 10.1080/13683500.2018.1504899
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    Cited by:

    1. Reichle, Philipp & Fidrmuc, Jarko & Reck, Fabian, 2023. "The sharing economy and housing markets in selected European cities," Journal of Housing Economics, Elsevier, vol. 60(C).
    2. Boto-García, David & Balado-Naves, Roberto & Mayor, Matías & Baños-Pino, José Francisco, 2023. "Consumers' demand for operational licencing: evidence from Airbnb in Paris," Annals of Tourism Research, Elsevier, vol. 100(C).
    3. Khalek, Sk Abu & Chakraborty, Anirban, 2023. "Access or collaboration? A typology of sharing economy," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).
    4. Calum Robertson & Sylvain Dejean & Raphaël Suire, 2023. "“Airbnb in the City”: assessing short-term rental regulation in Bordeaux," Post-Print hal-04123595, HAL.
    5. Johannes Luger, 2023. "Who depends on why: Toward an endogenous, purpose‐driven mechanism in organizations' reference selection," Strategic Management Journal, Wiley Blackwell, vol. 44(8), pages 2035-2059, August.
    6. Hongbo Tan & Tian Su & Xusheng Wu & Pengzhan Cheng & Tianxiang Zheng, 2024. "A Sustainable Rental Price Prediction Model Based on Multimodal Input and Deep Learning—Evidence from Airbnb," Sustainability, MDPI, vol. 16(15), pages 1-22, July.
    7. Tuomi, Aarni & Ascenção, Mário Passos, 2023. "Deliberative governance for tourism platforms," Annals of Tourism Research, Elsevier, vol. 103(C).
    8. 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).
    9. Martin Falk & Miriam Scaglione, 2024. "Effects of regulations on the Airbnb market in Geneva," Tourism Economics, , vol. 30(3), pages 615-632, May.
    10. Lutz, Christoph & Majetić, Filip & Miguel, Cristina & Perez-Vega, Rodrigo & Jones, Brian, 2024. "The perceived impacts of short-term rental platforms: Comparing the United States and United Kingdom," Technology in Society, Elsevier, vol. 77(C).

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