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The Unintended Consequences of Short-Term Rental Regulation: Evidence from New York City's Local Law 18
Open accessAbstract
The rapid expansion of short-term rental platforms such as Airbnb has sparked intense debates about its impact on urban housing affordability. The rapid development of the short-term rental market in New York has brought great economic pressure to the local homeless residents. This paper uses the implementation of Local Law 18 in New York City in September 2023 as a natural experiment to investigate whether short-term rental regulations can effectively achieve stated goal of improving long-term residents' housing affordability. Through the analysis of internal data from Airbnb and housing market statistics, this study found that although the regulation successfully reduced approximately 90% of short-term rental supply, the expected improvement in long-term housing affordability was not achieved. The research results indicate that the housing affordability crisis in major cities is mainly driven by fundamental supply constraints rather than short-term rental platforms. This paper provides empirical evidence on the effectiveness of regulation and proposes evidence-based policy alternatives.
Checked 2026-11-13 · 1 reference not checked yet
Overview
CoChat Summary
TL;DR
Using New York City’s Local Law 18 as a natural experiment, this paper finds that the regulation cut legal short-term rental listings by over 90% but did not improve long-term housing affordability. It concludes that the city’s affordability crisis is driven mainly by fundamental housing supply constraints rather than short-term rental platforms.
Key findings
- Local Law 18 reduced short-term rental listings from approximately 38,500 to 3,000, a decline of about 92%.
- Despite that drop, Manhattan median rent rose from $4,200 to $4,700 (+12%) by July 2025, while Manhattan’s vacancy rate remained near 2.45% (versus 2.50% pre-law), far below the 5% threshold the paper calls a housing-crisis warning line.
- Short-term rentals made up only about 2% of NYC rental housing; even reclassifying all of them would raise Manhattan’s vacancy rate only from 2.45% to approximately 2.55%, so their removal had negligible effect on long-term rental supply.
- Hotel prices rose after the regulation: the average nightly rate increased from $265 to $283 (+7%), with busy-season rates reaching $417, while annual tourist arrivals rose from 63M to 68M (+8%).
Methods
- Natural experiment/case study of New York City’s Local Law 18, implemented in September 2023, comparing pre- and post-regulation housing market outcomes.
- Uses “Airbnb internal” data and government/housing market statistics, including Inside Airbnb, CoStar, and NYC Tourism Board data, to analyze short-term rental supply, rents, vacancy, hotel prices, and tourism.
- Also reports a fixed-effects panel regression on around 16,000 whole residences from July 2023 to January 2024, with average daily rate as the dependent variable and the number of competing listings as the main independent variable.
Limitations
- The paper states that reliance on publicly available “Airbnb internal” and government data may have measurement limitations; Airbnb has not released official data, and web scraping may miss or double-count listings.
- The paper states that the post-regulation period is short (about two years), so long-term effects on investment, new construction, and community composition may not yet be observable; it also notes the NYC-only focus and unique local characteristics limit generalizability, and that Airbnb-hotel substitution was not fully considered.
- Evident from the text: the main housing-market analysis is largely a descriptive pre/post comparison, so causal interpretation depends on the natural-experiment framing.
Model-written summary. Check it against the paper before relying on it.
Integrity signals
Registry
Cites
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Verification
Claims the paper makes
0 Valid · 2 Not valid · 21 Not checked · 10 Own results and interpretations
In the paper
“For most months of the year, hotel occupancy rates were higher than these had been before the new regulation [7].”
§ The Unintended Consequences of Short-Term Rental Regulation: Evidence from New York City's Local Law 18 > 3.4. Evidence of real estate market results
What the sources say
- Not matchedcites [7]
Couldn’t be matched to a paper in Crossref, so it can’t be checked.
plainstates an association- Asserted: passes — The authors put it forward as true.
- Checkable: passes — It can be checked against evidence.
- Load-bearing: unclear — It is unclear whether the paper’s conclusions depend on it.
- Based: passes — The paper gives a reason why it holds.
- Rests on an assumption not shown here.
- Not matched
None of the sources cited for this claim could be matched to a paper in Crossref, so there is nothing to check it against.
In the paper
“After the new rules were put in place, New York City's yearly rent growth was faster than what other similar cities in the US saw [1,7].”
§ The Unintended Consequences of Short-Term Rental Regulation: Evidence from New York City's Local Law 18 > 3.4. Evidence of real estate market results
What the sources say
- Not matchedcites [1]
Couldn’t be matched to a paper in Crossref, so it can’t be checked.
- Not matchedcites [7]
Couldn’t be matched to a paper in Crossref, so it can’t be checked.
plainstates an association- Asserted: passes — The authors put it forward as true.
- Checkable: passes — It can be checked against evidence.
- Load-bearing: passes — The paper’s conclusions depend on it.
- Based: passes — The paper gives a reason why it holds.
- Rests on an assumption not shown here.
- Not matched
None of the sources cited for this claim could be matched to a paper in Crossref, so there is nothing to check it against.
In the paper
“By July 2025, the middle rent price in Manhattan hit $4,700, which broke the previous record.”
- Also stated in: § 5. Conclusion · plain
“The middle rent price in Manhattan hit a new record high of $4,700”
- Also stated in: § 5. Conclusion · plain
“Manhattan median rent | $4,200 | $4,700 | +12%”
§ The Unintended Consequences of Short-Term Rental Regulation: Evidence from New York City's Local Law 18 > 3.4. Evidence of real estate market results
What the sources say
- Not matchedcites [1]
Couldn’t be matched to a paper in Crossref, so it can’t be checked.
- Not matchedcites [7]
Couldn’t be matched to a paper in Crossref, so it can’t be checked.
plain- Asserted: passes — The authors put it forward as true.
- Checkable: passes — It can be checked against evidence.
- Load-bearing: passes — The paper’s conclusions depend on it.
- Based: passes — The paper gives a reason why it holds.
- Also stated in: § 5. Conclusion · plain
In the paper
“although the regulation successfully reduced approximately 90% of short-term rental supply”
- Also stated in: § 3.2. Implementation and immediate effects of the 18th local regulation · plain
“After just one year, the number of rentals that are allowed to operate legally dropped to around 3,000 -that's a cut of more than 90% [1].”
- Also stated in: § 5. Conclusion · plain
“even though this law cut the number of short-term rental listings by more than 90% (it went from around 38,500 listings down to just 3,000)”
§ The Unintended Consequences of Short-Term Rental Regulation: Evidence from New York City's Local Law 18 > Abstract
What the sources say
- Not matchedcites [1]
Couldn’t be matched to a paper in Crossref, so it can’t be checked.
plainstates a cause- Asserted: passes — The authors put it forward as true.
- Checkable: passes — It can be checked against evidence.
- Load-bearing: passes — The paper’s conclusions depend on it.
- Based: passes — The paper gives a reason why it holds.
- Rests on an assumption not shown here.
- Also stated in: § 3.2. Implementation and immediate effects of the 18th local regulation · plain
A result the paper reports from its own data — it cites no other source for it, so there is none to check. The quote shows it is in the paper.
In the paper
“the expected improvement in long-term housing affordability was not achieved”
- Also stated in: § 3.4. Evidence of real estate market results · plain
“Even though there was a big drop in the number of short-term rental units, the long-term housing market still didn't get better the way people thought it would.”
- Also stated in: § 5. Conclusion · plain
“it did not make housing more affordable for people”
§ The Unintended Consequences of Short-Term Rental Regulation: Evidence from New York City's Local Law 18 > Abstract
plain- Asserted: passes — The authors put it forward as true.
- Checkable: passes — It can be checked against evidence.
- Load-bearing: passes — The paper’s conclusions depend on it.
- Based: passes — The paper gives a reason why it holds.
- Rests on an assumption not shown here.
- Also stated in: § 3.4. Evidence of real estate market results · plain
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- Probably not a substantial claim. 11
- It may state two separate claims as one. 13
- The quote only partly states this claim. 1
Self-check
Percentages, sums and reported differences re-computed from the paper’s own numbers.
Each contradiction between two passages listed here was confirmed by an independent check.
Rated minor: it would not touch a result — a value no result rests on, a p-value that stays on the same side of the significance level, or a conflict that is clerical, resolved elsewhere in the paper, or outside its own findings.
In the paper
§ The Unintended Consequences of Short-Term Rental Regulation: Evidence from New York City's Local Law 18 > 2.1. Debate on the short-term rentals
“In work by Barron, Kung, and Prospiero, people found that across the United States, when the total number of Airbnb listings goes up by 1%, average rents go up by 0.018%, and overall housing prices go up by 0.026% [3].”
§ The Unintended Consequences of Short-Term Rental Regulation: Evidence from New York City's Local Law 18 > References
“3. Martí-Ochoa, J., Martín Fuentes, E., Ferrer Rosell, B. (2024). Review of the scientific literature on Airbnb: Past, present and future.”
Rated minor: it would not touch a result — a value no result rests on, a p-value that stays on the same side of the significance level, or a conflict that is clerical, resolved elsewhere in the paper, or outside its own findings.
In the paper
§ The Unintended Consequences of Short-Term Rental Regulation: Evidence from New York City's Local Law 18 > Abstract
“Through the analysis of internal data from Airbnb and housing market statistics, this study found that although the regulation successfully reduced approximately 90% of short-term rental supply, the expected improvement in long-term housing affordability was not achieved.”
§ The Unintended Consequences of Short-Term Rental Regulation: Evidence from New York City's Local Law 18 > 4.1. Limitations
“Firstly, this study relies on publicly available data from "Airbnb internal" and government channels, and these data may have measurement limitations.Airbnb itself has not released official data, and the web scraping method used by "Airbnb internal" may have missed some listings or double-counted some listings.”
Citations
Cites
The Distributional Impact of the Sharing Economy on the Housing MarketPreprint
Calder-Wang, S. (2021) · SSRN Electronic Journal · doi:10.2139/ssrn.3908062 · Cited by 66
Competitive Imperfect Price Discrimination and Market Power
Belleflamme, P., Lam, W. M. W., & Vergote, W. (2020) · Marketing Science · doi:10.1287/mksc.2020.1234 · Cited by 61
Research works printed but not linked: 6
- Voltes-Dorta, A. (2024). Price competition among short-term Airbnb listings in New York City following Local Law 18. Tourism Economics, 30(8), 2047-2051. Retrieved from https: //doi.org/10.1177/13548166241234567 · DOI
- Martí-Ochoa, J., Martín Fuentes, E., Ferrer Rosell, B. (2024). Review of the scientific literature on Airbnb: Past, present and future. Journal of Tourism Analysis, 31(2), 75-112. Retrieved from https: //doi.org/10.1108/jta-2024- 0012 · DOI
- O'Connor, P., Pung, J. M. (2025). Exploring the impact of short-term rental regulations on housing availability and affordability: A case study and research agenda. In Information and Communication Technologies in Tourism 2025 (pp. 275-285). Springer. Retrieved from https: //doi.org/10.1007/978-3-031-12345-6_25 · DOI
- Hidalgo, A., Velazquez, F. J. (2026). The economic impacts of short-term rentals and regulations: A literature review. Documentos de Trabajo (FEDEA), (2), 1-55.
- Benítez-Aurioles, B. (2021). A proposal to regulate the peer-to-peer market for tourist accommodation. International Journal of Tourism Research, 23(1), 70-78. Retrieved from https: //doi.org/10.1002/jtr.1234 · DOI
- Zhang, C. (2025). Essays in leveraging machine learning and big data analytics in Airbnb for forecasting and pricing (Doctoral dissertation, King's College London). King's College London Research Portal. Retrieved from https: //kclpure.kcl.ac.uk/portal/en/studentTheses/essays-in-leveraging-machine-learning-and-big-data-analytics-in- a/
Cited by
Still being checked.
Metadata
- Authors
- Dong, Y.
- Affiliations
- Beijing Luhe International Academy
- Venue
- Advances in Economics, Management and Political Sciences
- Publisher
- EWA Publishing
- Published
- 2026-06-23
- Volume
- 276
- Issue
- 1
- Pages
- 142-148
- ISSN
- 2754-1169 (ISSN-L)
- 2754-1177
- OpenAlex
- W7165652512
- Cited by
- 0
- References
- 1
- FWCI
- 0.00
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Licence
- cc-by
- Locations
- Advances in Economics Management and Political Sciences (publishedVersion, cc-by)
- Topics
- Social Sciences › Business, Management and Accounting › Marketing › Sharing Economy and Platforms
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Housing Market and Economics
- Social Sciences › Economics, Econometrics and Finance › Finance › Housing, Finance, and Neoliberalism
- Keywords
- short-term rental regulation, Airbnb, housing affordability, housing supply constraints, long-term residents, unintended consequences of regulation, urban housing policy
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