Over the past decade, home-sharing has evolved from fringe activity to encompass a booming short-term rental (STR) market of global scale. This rise has not been without criticism, as Airbnb and other STR platforms have been charged with exacerbating over-tourism, gentrification, and housing issues and engaging in anti-competitive behaviour. On the other
POLICY RECOMMENDATIONSAs a result of our analysis, we recommend that jurisdictions looking to manage the STR market consider the following recommendations and insights in establishing regulatory approaches:1. The STR market is diverse. Policymakers must account for the existence of a spectrum of host types-from unsophisticated home-sharers to professional STR businesses-and refrain from crafting regulations that conceive of all STR hosting as commercial activity.2. Relatedly, hosts and guests participate in the STR market for social, practical, and profitbased reasons, and policymakers must keep these distinct and overlapping motivations in mind. In particular, regulations should be designed to limit commercialization without undermining access to the social and practical benefits of STRs.3. The costs and benefits of STRs vary depending on the shape and nature of the market in a given jurisdiction, as well as the local context. Thus, effective regulation rests on the ability of policymakers to both understand local market dynamics and how they intersect community issues, as well as leverage such information to craft tailored solutions.4. The STR market confounds typical two-sided market models, given the active participation of platforms alongside hosts and guests. Common regulatory approaches are ill-suited to addressing the dynamics produced by this three-dimensionality, and thus jurisdictions will need to innovate beyond usual tools to ensure regulatory effectiveness.
5.As key market participants, platforms have vested interests, including in influencing policy and regulations. Regulators must understand the central role platforms play in shaping the market and regulatory spaces, and account for this in regulatory frameworks. 6. To address issues, such as lack of compliance, authorities might consider the merits of co-regulation, whereby platforms are given responsibility for certain regulatory functions.