Title: Why do cities restrict short-term rentals such as Airbnb: an empirical panel analysis from the US

Authors: Joshua Smith

Addresses: Trevecca Nazarene University, 333 Murfreesboro Pk., Nashville, TN, 37210, USA

Abstract: This paper asks why local governments pass policies regarding short-term rentals (STRs), such as Airbnb, using stakeholder theory. A novel dataset from 19 US cities over the years 2012 to 2019 is constructed, examining seven different types of STR restrictions and regulations. This analysis finds that a reduction in housing affordability is the most common motivation for these laws and the most significant with large magnitudes. In addition, cities with budgets that are increasingly dependent on hotel revenues and have a higher penetration of Airbnb are also more likely to pass policies. This study contributes to the literature on Airbnb, government response, and affordability concerns. It shows that housing affordability is a primary policy driver in US, suggesting that governments are concerned with addressing the negative externalities that STRs create.

Keywords: Airbnb; STRs; short-term rentals; local government policy; restrictions; housing affordability; tourism; hosts; guests; stakeholder theory; tourism-driven gentrification.

DOI: 10.1504/IJTP.2025.144173

International Journal of Tourism Policy, 2025 Vol.15 No.1, pp.67 - 80

Received: 04 Jun 2024
Accepted: 12 Sep 2024
Published online: 30 Jan 2025 *

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