Airbnb and rental markets: Evidence from Berlin

We exploit the differential responses of Airbnb hosts to two distinct policy interventions in Berlin to shed light on the optimal design of policies targeting short-term rental platforms to mitigate rental market inflation. The first intervention, which affected commercial listings, significantly impacted long-term rental markets, unlike the second intervention, which mainly affected non-commercial listings. Leveraging these policy variations, we estimate the marginal impact of Airbnb on rental supply and rents. Each additional commercial Airbnb listing displaces 0.23 to 0.37 rental units and increases rent per square meter by 1.3 to 2.4 percent. This underscores the importance of targeting commercial listings when regulating short-term rental markets. •Policy changes in Berlin in 2016 and 2018 reduced the supply of Airbnb listings.•Only the 2016 reform removed many commercial Airbnb listings.•Only the 2016 reform resulted in an increase in supply of long-term rentals.•More nearby Airbnb listings mean fewer rentals and higher rents on average.