A Theoretical Model for Regulating Airbnb
By Stephen R. Miller (University of Idaho)
This short essay proposes a theoretical model for regulating the short-term rental market, which is typified by online markets such as Airbnb.com. The basic mechanism proposed here is a “transferable sharing right” (TSR), which is modeled on existing transferable development rights regimes. The proposed TSR regime would provide cities a means of regulating short-term rentals while also charging a fee equal to externalities and lost city revenue resulting from short-term rentals. Further, TSRs could be used to re-invest in neighborhoods where short-term rentals occur or to drive economic development to neighborhoods where cities seek to encourage tourism.
Full Content: SSRN