The Effects of Short-Term Rental Regulation: Insights from Chicago
We provide an in-depth study of short-term rental (STR) regulation in Chicago. While many municipalities choose between outright bans or laissez-faire strategies concerning STR activities, Chicago pioneered a middle-ground ordinance, enabling the market to exist with limitations and registrations, and imposing a new tax. We show that compared to three control cities, the number of active Airbnb listings in Chicago declined 16.4% in the two years after the ordinance, but this effect is only significant after the city began receiving detailed data feeds from STR platforms. We further demonstrate (i) localized reductions in burglaries near buildings that prohibit STR listings as part of a new capability of the ordinance, (ii) Airbnb revenues declined more in zip codes with above-median hotel revenues, and (iii) Chicago’s middle ground approach generated different and nuanced effects on different STR stakeholders, including the city itself in terms of its STR tax revenues.
Non-Technical Summaries
- The rapidly expanding home-sharing market has led to calls for new regulations to restrict activity in short-term rental (STR) markets....
Published Versions
Ginger Zhe Jin & Liad Wagman & Mengyi Zhong, 2024. "The Effects of Short-Term Rental Regulation: Insights from Chicago," International Journal of Industrial Organization, .
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