Senior Honors Projects, 2020-current
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Date of Graduation
Bachelor of Science (BS)
Department of Economics
In recent years, short-term home rental companies such as Airbnb and Vacation Rentals by Owner (VRBO) have grown in popularity throughout the United States and the world. The lack of regulation of this rapid growth, which stemmed from the legal grey area these rentals fall under, caused some states to adopt specific regulatory policies. These regulatory policies attempt to better monitor this sector, to tax rental earnings, and to reduce perceived negative externalities to this new market. This thesis researches the benefits and costs that short-term rentals (STRs) provide to cities and the regulatory implications on the growing rental market. Using census data along with a STR regulatory index developed by the R Street Institute that measure city-level regulations, this paper presents evidence that city-level regulations of STRs were largely unpredictable. Although no widespread common factors explain regulatory decisions, local sales tax rates, residents’ political policy preferences, city population age, and owner-occupied median home values were found to have some influence in explaining variations among cities in short-term rental regulation.
Kauffman, Joseph L. and Hooper, Harrison D., "An economic analysis of the short-term rental market: Local regulatory decisions" (2020). Senior Honors Projects, 2020-current. 99.