The housing affordability conversation has been dominated by one explanation: zoning. Restrictive land use rules, single-family mandates, and slow permitting are real and worth fixing. But in the most expensive markets in America, a quieter force has removed enormous quantities of existing housing from the long-term market without changing a single zoning rule. Short-term rental platforms have converted neighborhoods into hotels, and the supply effect dwarfs what marginal upzoning can offset.
The numbers in tourist-heavy cities
In New Orleans, Nashville, Austin, San Diego, Honolulu, and parts of New York, short-term rental units number in the tens of thousands per metro. AirDNA and academic researchers tracking the platforms estimate that in the most affected ZIP codes, 5 to 15 percent of total housing stock has been pulled out of the long-term rental market and converted to short-term hosting. That’s not casual hosts renting out a spare room. The dominant pattern is professionalized operators running multiple units, often LLC-owned, treating residential housing as a lodging asset class. A 2023 study from McGill found that the introduction of Airbnb at scale was associated with measurable rent increases in affected neighborhoods, with the largest effects in tourist-dense urban cores. Removing thousands of homes from the rental market while population grows produces exactly the price pressure you’d expect.
Why zoning narrative is incomplete
The pro-supply YIMBY argument is correct that more housing reduces prices over time. It’s also incomplete when applied to cities where short-term rentals are siphoning units faster than new construction can deliver. Building a new 200-unit apartment building takes three to seven years from entitlement to occupancy. A landlord can convert a long-term unit to a short-term rental in a weekend. The pace asymmetry means that in tourist markets, short-term rental growth can offset years of new construction. Cities like Barcelona, Amsterdam, and Lisbon recognized this earlier than most U.S. metros and imposed permit caps, host registration, and primary-residence requirements. The U.S. has been slower, partly because the platforms invested heavily in lobbying and partly because the political coalition for housing supply has been reluctant to acknowledge any constraint that isn’t zoning.
What sensible regulation looks like
The argument isn’t to ban short-term rentals. Real, casual home-sharing — a homeowner renting a room or their primary residence for weekends — has limited supply impact and offers travelers genuine value. The problem is the commercial conversion of multi-unit housing stock into de facto hotels operated remotely. Sensible policies include: capping non-primary-residence short-term rentals, requiring registration with enforcement teeth, limiting nights rented per year, and applying lodging taxes consistently. Cities that have implemented these rules — like Santa Monica, Boston, and parts of New York — have seen measurable returns of housing units to the long-term market without eliminating the platform entirely.
The takeaway
Zoning reform matters, but it’s not sufficient on its own. In any city where tourism is a serious industry, the fastest way to recover housing supply is to regulate the channel that’s actively removing it. Pretending short-term rentals are a sideshow has cost residents real units and real affordability.
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