A report studying the effects of short-term housing rentals on the Denver housing market found that the industry doesn’t have an impact on housing costs in the city.
Short-term rentals are a popular alternative to staying in hotels. Consumers typically rent lodging through home sharing websites like Airbnb or Vrbo.
Denver began regulating short-term rentals in 2016 but started more strict enforcement earlier this year. The Denver District Attorney’s Office in the last few months charged individuals with felonies for illegally renting out their own properties on home-sharing websites like Airbnb.
Critics of the industry who support stringent regulation of short-term rentals often argue they raise housing costs by reducing the number of homes available on the market, thus raising rent and home prices.
The report, however, suggests that’s not the case in Denver. Short-term rental units make up only one percent of total housing units in the city, according to the report.
“It is unlikely that short term rentals have the potential to decrease the supply of housing units in Denver enough to increase housing costs,” the report said.
“Short term rentals in Denver do not appear to have an impact on housing costs at the citywide level,” the report concluded.
While a concentration of short-term rental units is “moderately positively correlated with increased home values,” the report attributed increases to the desirability of the area for visitors to the city.
The report also acknowledged that the city’s continued enforcement of regulations framework “is critical to ensuring that short term rentals do not inflate housing prices in Denver.”
Denver requires that properties rented on a short-term basis must be the owner’s primary residence. The city also requires owners obtain a business license to operate a short-term rental.