Airbnb driving housing shortages and rental price hikes in global cities: report
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A new study has revealed Airbnb is exacerbating housing shortages and pushing up rental prices in major cities worldwide, with returns for short-term rental investors far outpacing traditional property investments.
Research by Australian-based Grounded Community Land Trust Advocacy found Airbnb investor returns exceeded traditional property investors by 118% across seven global cities.
Karl Fitzgerald, Managing Director of Grounded Community Land Trust Advocacy, said the trend is having a significant impact on housing affordability and availability for local residents.
“As returns rise for Airbnb investors, local residents struggle to find stable and affordable housing, impacting the social fabric of communities and perpetuating inequality,” Mr Fitzgerald said.
The study examined Airbnb’s impact in Berlin, Barcelona, Vancouver, London, Los Angeles, Paris and Sydney. In hotspots like Berlin and Barcelona, short-term rental earnings were 201% and 171% higher respectively than long-term rentals.
Mr Fitzgerald said the high returns are driving rapid growth in Airbnb listings, with active listings increasing by 5.6% annually across the studied cities.
To address the issue, Grounded proposes implementing a cap and trade system to limit short-term rental growth while channeling profits towards Community Land Trusts (CLTs) for affordable housing.
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“The cap and trade system works by capping the number of Airbnb’s and creating a license. Over time, the number of licenses reduces, putting pressure on the 48% of listed Airbnb’s that were not rented out,” Mr Fitzgerald explained.
The proposed system could generate significant revenue for cities while still allowing Airbnb owners to profit. Paris, for example, could potentially raise $140 million in its first year.
Mr Fitzgerald emphasised the urgent need for action, stating: “Airbnb is enforcing rapid change that squeezes communities sideways as short term profits reign supreme. CLTs can add resilience to that local community, ensuring its long term survival.”