Short term vacation rentals have not significantly impacted the American housing market, according to a nationwide study conducted by Oxford Economics that was commissioned by hotel booking website Expedia Group Inc.
The first-of-its-kind report took a look at more than 2,500 counties throughout a four year period, from 2014 to 2018, with a focus on urban areas and vacation hotspots. The findings? Short term vacation rentals have increased the average American mortgage payment by just $9 per month.
Home renters found a similar outcome, with only 0.2 percentage points of the 4.3% rise in inflation-adjusted rent likely attributed to the effects of short-term rentals.
“Expedia Group believes fair and effective short-term rental policies are not only achievable but vital to the long-term health of our communities,” said Amanda Pedigo, Vice President of Government and Corporate Affairs at Expedia Group, in a transcript provided by Yahoo! Finance. “Those policies are built upon a foundation of fact-based dialogue and collaboration.”
The report, which was officially unveiled at the 2019 National League of Cities City Summit in San Antonio, Texas, placed the lion’s share of the blame for rising mortgage and rental prices on improvements in the labor market and the steady advancement of household earnings.
The study went one step further, suggesting that regulating the short term rentals industry will not help Americans find affordable housing.
“Adopting stricter regulations on short-term rentals is unlikely to solve the housing affordability crisis faced by many American households, in both the rental and homeowners’ market,” said Oxford Economics Senior Economist and project lead, Alice Gambarin. “It is important to weigh these potentially modest affordability benefits against the associated negative consequences for the local economy, including lower levels of tourist expenditures and tax receipts.”
A 2017 study conducted by University of California reported findings at odds with the Oxford Economics study, with Los Angeles economics professor Edward Kung submitting short term rentals impacted the housing market at a rate three times higher than suggested by this most recent report. It must be noted, however, these two studies used different methodologies, with the University of California report focusing solely on America’s largest 100 counties.
“Using larger geographies as the unit of analysis may mask the impact of STR growth in particularly impacted neighborhoods,” Kung told Morningstar, suggesting a flaw in the study conducted by Oxford Economics and Expedia.
Many American municipalities, like Jersey City, have taken steps to curb short term rentals, issuing stiffer regulations, as we previously reported.