Do short-term rentals increase rent prices?

A Harvard Business School study estimated that a 1% increase in Airbnb listings in a ZIP code leads to a 0.018% increase in rents. That sounds tiny, but across thousands of neighborhoods in a city like New York or Los Angeles, the cumulative effect is real. In most major cities, STR growth pushes rents up.

The supply-side effect is straightforward. Every unit converted from a long-term rental into a full-time short-term rental removes one home from the available housing stock. In markets where housing supply is already tight (which describes most major cities), even a modest reduction in available units pushes rents upward.

The concentration effect matters more than the citywide average. A few scattered short-term rentals in a large city have negligible impact on overall rent levels. But in specific neighborhoods, particularly those close to tourist attractions, transit hubs, or nightlife districts, the concentration is high enough to meaningfully reduce the pool of available apartments and drive local rents up by several percentage points.

Secondary effects also contribute. When landlords see that short-term rentals generate more revenue per night than a long-term lease, some choose not to renew existing tenants' leases in order to convert units. This dynamic creates additional competitive pressure in the rental market and displaces long-term residents who are priced out of their own neighborhoods.

For renters trying to understand whether short-term rental activity is affecting their housing costs, check the BnBIndex score for your building and surrounding addresses on BnBDetector. High concentration in your area means you are likely paying more rent because of it.