If there's enough Airbnb demand to drive up residential rents, then you'd also have to factor in some or all of...
• Hotel rates go down from the competition; some hotel space/development at the margin is shifted into residential/Airbnb units
• Those renters who take vacations to other cities pay less when on vacation (in either Airbnb units or competed-lower Hotel rates)
• Some renters make up some or all of the raised rents through occasional re-renting via Airbnb (as when they are on vacation)
Ultimately, holding both people and housing units (including hotels) constant, it's not at all clear that a new commercial system for reallocating who-is-in-what-bed-when causes any net increase in prices paid. By better utilizing stock that might otherwise have been empty, it might increase a city's effective carrying capacity with no costly new construction. Even if it does drive up rents, that's only happening in concert with a bunch of other value - more people on vacation, more useful density/utilization in the most desirable locations, more options for many renters – that helps offset the negatives.
Comments
If there's enough Airbnb demand to drive up residential rents, then you'd also have to factor in some or all of...
• Hotel rates go down from the competition; some hotel space/development at the margin is shifted into residential/Airbnb units
• Those renters who take vacations to other cities pay less when on vacation (in either Airbnb units or competed-lower Hotel rates)
• Some renters make up some or all of the raised rents through occasional re-renting via Airbnb (as when they are on vacation)
Ultimately, holding both people and housing units (including hotels) constant, it's not at all clear that a new commercial system for reallocating who-is-in-what-bed-when causes any net increase in prices paid. By better utilizing stock that might otherwise have been empty, it might increase a city's effective carrying capacity with no costly new construction. Even if it does drive up rents, that's only happening in concert with a bunch of other value - more people on vacation, more useful density/utilization in the most desirable locations, more options for many renters – that helps offset the negatives.