When Airbnb began nearly 15 years ago, it offered a new and innovative solution to book short-term stays without any hassle. By renting out a spare room or an entire apartment, it provided an alternative to traditional hotel models which were often overpriced and overbooked. Airbnb now faces many critics as the company quickly grew, offering hundreds of thousands of stays around the globe, but not without a handful of negative experiences. Now, planners and policymakers are beginning to see the effects of the abundance of Airbnb listings and how it impacts a growing housing crisis.
Investors who construct Airbnb rental empires have become increasingly popular over the last decade. Especially in the present day, where people are looking to return to normal travel routines, Airbnbs have been a popular option and have played a significant part in the short-term rental market. In 2020, the purchase of vacation homes across the United States exceeded the growth of existing-home sales by more than 40% from 2019. Owners are seeing the benefits of buying up these homes and renting them out for high-profit margins. Opportunistic landlords can pay off their mortgages in just a few days by renting out their homes to visitors. However, this has partially contributed to a housing shortage that has impacted the globe, driving up rent prices in almost all major cities. This correlation between the increase of homes that have become dedicated to serving as Airbnbs and the rise in rental rates has been dubbed “The Airbnb Effect”.
