Airbnb has perhaps avoided some of the criticism aimed at fellow sharing economy behemoth Uber, but nonetheless there are many who believe they harm local neighborhoods and push up house prices for those who actually want to live there.

New research from USC explores the impact the company is having on the long-term housing stock in cities around the world.  The research tapped into publicly available information from Airbnb, the Zillow ZIP code and Census data to explore the impact rentals were having, even accounting for things like gentrification and broader economic trends.

The data showed that a 1% increase in Airbnb listings in an area led to a 0.018% increase in rental rates, and a 0.026% increase in house prices, which might sound low until you realize that the rate of growth in Airbnb listings was 28% across the regions covered in the study.  As such, the actual increase was 3.2% and 5.7% respectively.

Significant change

As a result, the researchers estimate that a year-over-year increase of 0.59% and 0.82% in rental and house prices respectively, which is a significant proportion of current price changes, and represents around 1/5 of the annual increase in rental prices and 1/7 the increase in house prices.  What’s more, it’s possible that these impacts may even be under-estimated.

“The impact of moving a whole unit from long-term occupancy to short term is equivalent to a demolition,” the researchers say. “You just subtracted a housing unit from the rental stock.”

Of course, Airbnb has shifted away from its original approach where spare capacity in properties was rented out rather than entire flats and houses.  It’s an approach the researchers believe would mitigate some of these price rises.

Despite these apparently negative consequences of a large Airbnb presence in an area, the authors are at pains to point out that things are not solely negative.

“Some Airbnbs are in locations where there are no hotels, and this has the potential to favor the economy of these areas,” they explain. “Restaurants that were insulated from tourists before can now benefit from Airbnb travelers. All these things need to be taken into account to make policies that work for everyone.”

Whilst Airbnb are an obvious and very visible target for angst, in reality, the housing issues of many cities have a much bigger basis.  For instance, Los Angeles County are believed to have a housing shortage of over 300,000 units, which makes any properties drawn into the Airbnb network felt hard, especially by younger people.

It’s more a case of Airbnb aggravating pre-existing conditions rather than causing them.  While various local housing policies can undoubtedly help, the harsh reality is that for many places, the best solution is simply to have more houses.

“You have to have more houses,” the researchers say. “As long as people don’t want houses built in their neighborhood or changes in zoning that would increase density, there’s always going to be a shortage.”

It’s no good pretending that people don’t need and want temporary accommodation, but to rather work effectively to fulfill that demand while also catering for local needs.