Airbnb: A Land of Opportunity

Abstract

Few and far between are the areas that have been left untouched by the rapid and unwavering growth of short-term rental platforms such as Airbnb. Particularly in the post-pandemic world, Airbnb’s presence in rural America has expanded, tapping into new, previously underserved markets. With the ability for investors to purchase properties at below-average prices, listing them for half of the local average month’s rent in a night, the aim of this thesis is to examine preliminary effects observed in these communities, and to develop policies accordingly to maximize growth while limiting the dangers of this expansion.

The first two chapters of this thesis will aim to provide the background of what short-term rentals are, their role in the sharing economy, and the financialization of the real estate market. The subsequent two chapters will delve into the founding and growth of Airbnb specifically, how it has changed throughout the years, and how COVID specifically has reshaped the real estate market and affected Airbnb’s own plans.

Having laid this foundation, we will examine three case studies, in order to provide specific policy recommendations. Essentially, the policy’s objective will be to maximize economic potential in these regions, while ensuring a quality of life and accessibility for its residents. The solutions I suggest are: implementing a landlord to listing radius, to ensure host presence and responsiveness which will help mitigate concerns about disruption and gentrification, and ensure revenue remains within the community, limiting the number of properties per host, and creating an oversight office will be a response to this new challenge.

Given how frequently rural communities are left out of conversations regarding tourism and economic opportunities, it is important to me to speak up on this topic. Short-term rental platforms have numerous potential benefits for these communities: bringing new life, creating new jobs, allowing small business to thrive, to name a few. However, there are also dangers: property destruction, public nuisances, and gentrification. The key to achieving these benefits lies in the limitation of these dangers. Providing this research and these policy recommendations will hopefully provide a basis for future research and decision-making.