Airbnb brought a revolution to the tourism and travel sector. Everyone can set up a short-term rental business, with fewer advertising costs and in a more efficient way than in the past. The fact that the market is now more accepting of a low-cost alternative also played a role in the success of Airbnb.
But everything comes with a cost. An article from the BBC, published in 2018, illustrated precisely the effects of Airbnb in a neighbourhood, especially in the case of a big success.
Good for owners, bad for inhabitants
Short-term rentals can be two to three times more lucrative than long-term contracts. The BBC mentioned a study that covered the Lower East Side of Manhattan, in New York, that showed evidence of this. For homeowners, the prospect of more significant profits is obviously appealing. But their are several adverse effects.
Main cities throughout the world have fewer and fewer homes available for residents, especially in city centers. Owners are not interested in renting their properties in those valuable areas.
Illegal market pressure
Older tenants are being pushed out of their contracts, to make way to the new business model. People that lived in the same house all of their lives are suddenly being threatened to leave and find a place elsewhere.
If more than half of the houses in a neighbourhood become short-term rentals, the area turns into a giant hotel. This means more noise and confusion; the sense of belonging to a community is lost.
It is no wonder that cities throughout the world are setting limits.