Land value impacts of Airbnb listings on single-family homes in Austin, Texas, USA

• DOI: https://doi.org/10.1108/IJHMA-01-2021-0008
• Published date: 31 May 2021
• Date: 31 May 2021
• Pages: 392-410
• Subject Matter: Property management & built environment,Real estate & property,Housing markets
• Author: Junfeng Jiao,Kent Hansen,Amin Azimian

Land value impacts of Airbnb

listings on single-family homes in

Austin, Texas, USA

Junfeng Jiao,Kent Hansen and Amin Azimian

Urban Information Lab, The University of Texas at Austin, Austin, Texas, USA

Abstract

Purpose –This study aims to explore the impacts of Airbnblistings on land values in the Austin, Texas,

USA area, particularlyon single-family homes. The goal of the analysis is to shed light on how greatly and in

what direction Airbnb is affecting the housing market, with an emphasis on the spatial distribution of its

effects.

Design/methodology/approach –The analysis in this paper is performed using threedistinct models

on a data set of land parcel data within Travis County: an ordinary least squares regression model, a

geographically weighted regression (GWR) aimed at detectingthe inf‌luence of variables at the census tract

level, and a Bayesianapproach, which describes spatial and temporal effectson the data.

Findings –The f‌indings of the analysis indicate that across the years 2013 to 2019, higher numbers of

Airbnb listingswere associated with lower percentage increasesin land value in certain tracts in the northern

and eastern parts of the city. Additionally, the results of the Bayesian model indicated that much of the

change in landvalue can be attributed to unobserved factors withincensus tracts.

Originality/value –The contribution of this study to theexisting literature is its analysis of the spatial

and temporal analysis of the effects of Airbnb listings on land value using a GWR and a Bayesian model.

Also, as the negative correlationfound in the study departs from previous research, this paper may provide

policymakers insight into the complex spatial distribution and conf‌licting effects of Airbnb listings across

distinctparts of cities.

Keywords Housingmarket, Bayesian,Airbnb, Short-termrental, Geographically weighted regression,

Land value

Paper type Research paper

Introduction

Since their emergence more thana decade ago, short-term rental companies such as Airbnb

have played an increasingly important role in the economy, particularly at the level of the

city. The service promotes itself as a way to provide both convenient lodging options to

tourists and travelers,as well as a means by which homeowners can earn income by renting

out their homes. It shouldbe noted that this emergence has raised numerous questions about

the effects of Airbnb properties on the cost of housing and rent, the need for regulation by

city governments and the company’s relationship to the hotel industry, among many other

concerns (Bivens,2019).

There is evidence that theexpansion of Airbnb in cities in the USA has led to increases in

the cost of housing. Some haveargued that this increase in home values can be of benef‌itto

homeowners who are renting their properties by allowing them to offset the costs of

ownership through rentalincome and can help maintain the property value and character of

This project was supported by the Good System Grand Challenge and the Cooperative Mobility for

Competitive Megaregions (CM2) center both at The University of Texas at Austin.

IJHMA

15,2

392

Received19 January 2021

Revised7 March 2021

Accepted10 March 2021

InternationalJournal of Housing

Marketsand Analysis

Vol.15 No. 2, 2022

pp. 392-410

© Emerald Publishing Limited

1753-8270

DOI 10.1108/IJHMA-01-2021-0008

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1753-8270.htm

a community (Jefferson-Jones, 2015). Others point out that the rise in housing costs puts

pressure on families and communities and that the expansion of Airbnb has caused

signif‌icant increases in rent. In New York City, for instance,Airbnb growth may have been

responsible for a $400 annual increasein rents (Bivens, 2019).

It is evident, then, that the role of Airbnb in the housing market, as well as the economy

as a whole, is signif‌icant and that there is still much that is not fully understood about its

impact due to its age and the speed of its proliferation in cities. This paper aims to explore

aspects of the impact of Airbnb listings on the change in land value for single-familyhomes

in Austin, TX through analysis of the relationship between these values between 2013 and

2019.

Literature review

Previous research has explored the various socio-economic impacts of the presence of

Airbnb and other short-term rental companies on local economies. In particular,research in

this area tends to focus on impacts on the hospitality industry, as well as local housingand

rental markets. For instance,Dogru et al. (2020) explored the overall impact of Airbnb on the

structure of the US hotel market.Through an analysis of the effect of a number of variables,

including the number of active Airbnb listings, hotel supply variables and the number of

airport passengers on metrics of hotel revenue and occupancy, the number of Airbnb

listings is found to have a negative effect on the revenue of hotels and a statistically

insignif‌icant effect on hotel occupancy.Because of the time series nature of the data, an auto

regressive distribution lag regression model was used. Other research has focused on the

effects of Airbnb on the overall housing market, including home prices and rents. Franco

et al. (2019) examined the role of short-termrentals in the housing market in Portugal. Using

various ordinary least squares(OLS) and other regression models that take into accountthe

density of Airbnb listingsin each municipality, they found that between 2014and 2016, each

percentage point increase in the share of Airbnb properties resulted in a 4.5% increase in

home prices and a 2.26% increase in rents, particularly in central and historical areas of

Lisbon and Porto. Barron et al. (2018) similarly analyzedthe effects of short-term rentals on

the general housing market acrossthe USA. The study factors in Google trends data, as well

as how tourist-friendly a particular zip code is to determine the effects of the number of

Airbnb listings on rental rates and home values, obtainedusing indices provided by Zillow.

com. Moreover, they found that a 1% increase in Airbnb listings results in a 0.018%

increase in rents and a 0.026% increase in home values at the zip code level. The f‌indings of

Benitez-Aurioles and Tussyadiah (2020) are consistent with this, indicating that house

prices increased more than rents in the presence of Airbnb listings. Lee (2016) went further

in their argument to say that these increases are a contributingfactor toward gentrif‌ication

and segregation in Los Angeles, arguing for more regulation of the platform. In another

analysis of Los Angeles, Koster et al. (2018) foundthat an increase in regulations on Airbnb

resulted in a 50% dropin listing and a corresponding 2% decrease in housingprices.

Some research in the area of short-term rentals focused on impacts specif‌ically to the

rental market. For instance, Horn and Merante(2017) investigated the role of Airbnb in rent

increases in Boston and whether these increases are due to a decrease in the supply of

housing. Using a regression model, which accounts for the density of Airbnbs, as well as

characteristics of the listing and census tract, the rent for that unit is approximated. They

reported that a one standard deviation increasein the number of Airbnb listings results in a

0.4% increase in rents. Schafer and Braun (2016) similarly explored the impact of Airbnbs

on the rental market, f‌inding that areas with properties being “misused”as Airbnb listings

consistently show higher rates of rent than other areas. Sheppard and Udell (2016) used a

Land value

impacts

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