How short-term rentals are changing the neighborhood

This paper examines how short-term rentals are changing living conditions and the composition of the population in the affected parts of the town. First, to analyze the relation between quality, distance, and rents, we develop two different models: an urban economics model and a non-spatial housing market model. Second, in an exploratory study for the city of Berlin (Germany) in 2019 for 200 m networks, we show that the proportion of poor quality and noisy residential units on average correlates negatively with the probability of Airbnb listings and the number of these listings, but positively near the city center. Third, applying fixed effect and IV strategies, we investigate the impact of Airbnb listings on living conditions and the composition of the population in the almost 450 planning areas of Berlin in the years 2016-2019. We show that Airbnb offers increase the number of residents with long periods of residence and reduces the number of residents in poor quality residential environments, but we do not find above average effects on socially weak groups.