New Study: The Economic Costs and Benefits of Airbnb

We now know San Diego County was the second most popular California destination for Airbnb users in 2018; hosts saw $213 million in income from some 1 million guests who stayed in Airbnb rentals. (LA County was first with 2.7 million guests.) San Diego Union-Tribune

Yet a new study out from the Economic Policy Institute reveals the economic costs and benefits of Airbnb – and their summary had a far-less rosy picture of how short-term rentals affect cities and counties.

In their cost-benefit analysis, they found “the costs to renters and local jurisdictions likely exceed the benefits to travelers and property owners.”

• The economic costs Airbnb imposes likely outweigh the benefits.
• Airbnb might, as claimed, suppress the growth of travel accommodation costs, but these costs are not a first-order problem for American families.
• Rising housing costs are a key problem for American families, and evidence suggests that the presence of Airbnb raises local housing costs.
• The potential benefit of increased tourism supporting city economies is much smaller than commonly advertised.
• Property owners do benefit from Airbnb’s capacity to lower the transaction costs of operating short-term rentals, but the beneficiaries are disproportionately white and high-wealth households.
• The shift from traditional hotels to Airbnb lodging leads to less-reliable tax payments to cities.
• City residents likely suffer when Airbnb circumvents zoning laws that ban lodging businesses from residential neighborhoods.
• Because Airbnb is clearly a business competing with hotel lodging, it should be subject to the same taxation regime as hotels.

For the full report – go here.