The Airbnb Effect: How Short-Term Rentals Are Disrupting the Housing Market

Renters looking for affordable housing are failing in their mission because of the rise of short-term rentals, including Airbnb. Researchers suggest that the construction of affordable housing will not be able to meet the demand, as apartments and homes are being used as short-term rentals. The prices of houses have frighteningly risen to 8.8 times the average earning. The prices have jumped 318%, while the earnings have risen only 94%. However, the rent in the United Kingdom constantly increases, making the tenants face financial hardships. We are going to discuss The Airbnb Effect: How Short-Term Rentals Are Disrupting the Housing Market, Let's dive into it. 

What is a short-term rental?

Any rental for less than 6 months can be for some days to some weeks. A landlord can enter into a short-term agreement with Airbnb from their website. These short-term rentals can be problematic for cities where tourist crowds arrive more. Although they allow the local hotels to survive, they disrupt the housing market. 

How is it affecting the Market?

• Short-term rentals are the reason for the low availability of long-term rentals; with time, this availability will decrease more. Landlords may find short-term rentals more beneficial and profitable than long-term rentals. They would rather offer their property to be rented by a tourist for a short term instead of renting to the locals. This can increase the rental price and limit the options for residents. 

• Short-term rentals can disrupt culture and the community as well. Tourists happen to behave differently from the locals, which is quite obvious because a tourist does not know about the local traditions and culture. This can disrupt the community and also lead to noise.
• Local hotels and hospitality businesses can face hardships. Short-term rentals are an unfair competition because they are a more flexible accommodation option with lower prices, which can seriously impact them. 
• Cities are having trouble successfully regulating short-term rentals. They face challenges in following local laws such as taxes, zoning restrictions, and safety regulations. This can create a lack of assurance and potential risks for guests. 

 

Disadvantages of short-term rentals

 

The Homeowners and property owners must know about the risks and challenges they would face if they choose short-term rentals, Here are some key risks and challenges owners are likely to face when they go for the short-term rental option:

• High Time Investment: The owners would have to invest more time in their property because cleaning and tuning the place in a detailed way is necessary. Although they can hire other people for maintenance, the cost will be increased. 
• Maintenance cost: The furniture will wear out fast due to constant use and different tenants. The accommodations must be well-decorated and updated to keep the rental price and occupancy rate high, requiring the owner to incur some extra expenses. 
• Administrative cost: Indeed, the profit rate is higher, but the commission price and administrative charges are also high when the property is used for short-term rentals.

 

Conclusion

Short-term rentals are a more profitable option for owners, but they also require high costs and investment. They are also negatively affecting the housing market, which will directly disrupt the lifestyle of locals; from community disputes to a lack of jobs, it creates many problematic situations. Some cities have made and implemented rules and regulations regarding short-term rentals, like designating areas for short-term rentals, requiring owners to have a permit for short-term rentals, imposing local taxes, or making the owners accountable for the guest's behavior and also charging them with penalties for violations and misbehavior. This was the comprehensive discussion of The Airbnb Effect: How Short-Term Rentals Are Disrupting the Housing Market.