Replication Package for "The Effect of Short-Term Rentals on Long-Term Rents: Evidence From Santa Monica"

This study investigates the relationship between the short-term rental platform Airbnb and residential rents in the long-term housing market. We focus on the city of Santa Monica, which, in 2015, implemented the Home Sharing Ordinance, a stringent regulation targeting short-term rentals. Employing a Synthetic Control Method, our analysis reveals that within two years of its implementation, the ordinance caused Airbnb listings to decrease by 60%. Interestingly, we find no evidence that the regulation affected long-term rental prices. Furthermore, we provide suggestive evidence that the ordinance did not lead to an increase in the supply of houses available for rent during the studied period, which may help explain its lack of effect on rents.