The effect of Airbnb on housing prices : evidence from the 2017 solar eclipse

This study estimates the causal impact of Airbnb expansion on local housing prices by exploiting the 2017 total solar eclipse as a natural experiment. The eclipse's path of totality created a exogenous temporary demand for short-term rentals that resulted in a persistent increase in area supply of Airbnb listings. The IV/2SLS results indicate that a one percent increase in Airbnb listings generates a 0.037 to 0.043 percent increase in housing prices, a magnitude consistent with other causal research on this question. However, we provide additional evidence that our result is driven by homeowners' willingness to accept (WTA) due to increased rental income from monetizing excess housing capacity, whereas previous research largely reports estimates that combine this effect with demand-driven displacements of long-term housing supply. These findings suggest that WTA effects play a major role in Airbnb's influence for more efficient utilization of housing as an asset, and that regulations that partially pan investor listings will have muted effects on housing affordability.