Short-term rentals and Boston's housing market: What the data actually shows

Boston's 2019 Airbnb restrictions eliminated 56% of short-term rental listings, yet housing prices continued climbing to record highs. This counterintuitive outcome mirrors national patterns and reveals why STR regulation alone cannot solve the region's housing crisis. For investors and buyers navigating the Boston market, the data points to a more nuanced reality than headlines suggest—one where structural undersupply, not Airbnb, drives the housing squeeze.

The 2020-2023 period created a natural experiment across American cities. While remote work reshaped housing demand nationwide, Boston's strict owner-occupancy requirements for STRs blocked the investor-fueled Airbnb expansion that transformed markets like Austin, Phoenix, and Nashville. Understanding these dynamics is essential for anyone making real estate decisions in Greater Boston today.

When Boston implemented comprehensive short-term rental regulations in January 2019, city officials expected displaced Airbnb units to flow back into the long-term rental market. The rules required STR operators to live in the property as their primary residence for at least nine months annually—effectively banning investor-owned vacation rentals.

The regulations achieved their first goal decisively. A 2025 Boston University study found listings dropped from roughly 6,300 to under 3,000, a 56% reduction. Entire-home rentals specifically fell 46%. Roughly 3,000 units were removed from Airbnb between mid-2018 and early 2020.

Yet rents kept climbing. NBC Boston reported that despite the steep STR decline, the ordinance was "associated with an increase in rental costs." Median Boston rents rose to become the third-highest among major US metros, while the apartment vacancy rate collapsed to 0.65%—far below the 6% threshold considered healthy for renters.

Why the disconnect? Academic research suggests Boston's STR inventory—even at its peak—represented only about 2.1% of total housing units and roughly 3.6% of rental stock. Today, with stricter enforcement, those figures have dropped to 0.85-1.17% and 1.45-1.99% respectively. Paul Willen, principal economist at the Federal Reserve Bank of Boston, captured the structural reality: "Boston, no matter what happens, rents go up."

The most rigorous studies paint a consistent but moderate picture of short-term rentals' housing market impact. A landmark 2021 study by researchers from Wharton, UCLA, and USC Marshall found that nationally, a 1% increase in Airbnb listings correlates with a 0.018% increase in rents and a 0.026% increase in home prices. Aggregated across all markets, this means home-sharing explains approximately one-fifth of annual rent growth and one-seventh of home price appreciation.

Boston-specific research from UMass Boston economists Keren Horn and Mark Merante found that one standard deviation increase in local Airbnb density was associated with a 0.4% rent increase and a 5.9% decrease in rental units offered to long-term tenants. Their 2017 paper also revealed the commercial nature of Boston's STR market even then—while 82% of hosts operated single listings, the remaining 18% controlled 46% of all Boston listings.

The mechanism is straightforward: landlords shifting units from long-term to short-term rentals reduce available housing supply without reducing total housing stock. The Wharton study confirmed that Airbnb entry increases short-term supply while decreasing long-term rental supply—but doesn't change total housing supply. This reallocation effect is strongest in areas with low owner-occupancy rates, precisely the neighborhoods where Boston has historically seen STR concentration.

Federal Reserve Bank of San Francisco research delivered a striking finding: remote work accounted for more than 60% of pandemic-era home price growth—roughly 15 percentage points of the 24% national appreciation between November 2019 and November 2021. Each additional percentage point of remote work adoption corresponded to nearly 1% in house price increases.

This dwarfed STR effects. The markets that experienced the most extreme boom-bust cycles—Austin (+61%), Boise (+53%), Phoenix (+59%)—combined high STR concentrations with massive remote worker influxes and permissive building environments. Boston's experience diverged because its regulations blocked investor-owned STR expansion while its geographic and regulatory constraints limited new construction regardless of demand.

Greater Boston lost 36,000 residents between 2020 and 2022, including 21,000 from the city proper—a 3.1% decline. Massachusetts recorded its highest outmigration in 30 years, with 111,000 people leaving between April 2020 and July 2022. Remote work enabled departures to lower-cost metros, but international migration partially offset losses. The Boston Foundation attributed the exodus partly to "the flight to the suburbs and rise of remote learning and remote work."

For Boston's STR market specifically, the pandemic was devastating. AirDNA data showed Boston STR demand in February 2022 was 49.4% below 2019 levels—the worst performance among major coastal cities. Yuvoh Analytics reported Boston Airbnb revenue dropped from $93 million in 2019 to $63 million in 2020, a 32% decline. Urban short-term rentals suffered disproportionately as travelers favored larger vacation rentals in less dense destinations.

Despite regulations designed to favor individual homeowners renting spare rooms, professional operators dominate Boston's STR market. The 2025 BU study found that 76% of STR supply comes from professional hosts and management agencies. More concerning: 73% of entire-home listings are managed by hosts with multiple entire-home listings in Boston—a pattern that "points to a high degree of non-compliance" given that investor-owned units are prohibited.

Only 41% of current listings display registration numbers that match the city's official registry. The gap reveals enforcement limitations. Researchers noted that "the reactive nature of investigations and the city's limited enforcement capacity may disproportionately affect 'amateur' landlords" while larger operators use corporate structures to evade detection.

The profile of Boston STR operators breaks down as follows:

Current Boston STR market metrics show the remaining operators earning solid returns: average annual revenue of $50,000-55,000, occupancy rates of 62-74%, and average daily rates of $201-343. Top-performing 10% of properties earn over $9,200 monthly, explaining persistent interest despite regulations.

New York's Local Law 18, effective September 2023, provides the most recent large-scale test of aggressive STR regulation. The results should temper expectations about what Boston might achieve through further restrictions.

NYC's law required registration, host presence during rentals, and limited guests to two people. The impact on listings was dramatic: STR listings for stays under 30 nights dropped 83% between July 2023 and July 2024, from 21,900 to 3,700. Yet 18 months later, Manhattan rents hit record highs of $4,500 for a one-bedroom apartment. Rental vacancy remained unchanged at 3.2%. Rental inventory actually fell 6.3% since the law took effect.

Kenny Lee, StreetEasy's senior economist, explained why: the number of short-term rental listings "is too small to impact the 1 million unit market-rate rental housing stock in NYC." Harvard Joint Center for Housing Studies research reached the same conclusion—"banning or greatly restricting Airbnb rentals would not have a major impact on housing affordability in New York City, because it would not address the fundamental challenge: a lack of overall housing supply."

Many NYC hosts pivoted rather than converted to long-term housing. Listings requiring 30+ night minimum stays increased 29% as operators shifted to medium-term rentals serving traveling nurses, business travelers, and relocating professionals. Boston's data shows a similar pattern—37% of current listings already require 30+ night stays.

The evidence points to several actionable conclusions for those navigating Boston's market:

Boston's fundamental housing problem predates Airbnb's 2008 founding and will persist regardless of STR policy. Federal Reserve economists estimate the national housing deficit accumulated over a decade of post-2008 underbuilding at 2.8 to 5.5 million units. Boston's constraints are more acute—geographic limitations, restrictive zoning, and complex development approval processes combine with relentless demand from expanding life sciences and technology sectors.

The MBTA Communities Act may eventually ease some constraints by requiring multifamily zoning near transit stations, but effects won't materialize for years. Meanwhile, Boston is on pace for its lowest new construction in six years. The vacancy rate remains at historically low levels.

For investors, this structural undersupply means sustained demand for well-located properties regardless of STR policy shifts. For buyers, it suggests price relief will require policy changes far more fundamental than Airbnb restrictions. And for policymakers hoping STR regulation might ease housing pressure, the evidence from Boston's own five-year experiment—and NYC's more recent crackdown—suggests a sobering conclusion: you cannot regulate your way out of a supply crisis.

The path to affordability runs through zoning reform, streamlined permitting, and significant new construction. Short-term rental policy, whatever its merits for neighborhood character or hotel competition, is largely a sideshow to the main event.