Short-Term Stays, Long-Term Consequences: Housing in the Age of the Rental Gold Rush

By: Fabian De La Espriella

In cities across the globe, from Lisbon to Los Angeles, a quiet shift is reshaping the fabric of neighborhoods. Once tight-knit blocks of long-term residents are now dotted with rolling suitcases, keyless entry pads, and a revolving door of visitors. Short-term rentals (STRs)—the kind booked through platforms like Airbnb and Vrbo—have gone from fringe to fixture. But as their popularity soars, so do the consequences.

The debate surrounding short-term rentals often gets reduced to a binary: should governments regulate them or not? But the reality is far more complex. At its core, the conversation is about what kind of communities we want to live in, and who gets to stay in them.

The Case for Concern

There’s mounting evidence that short-term rentals are amplifying housing scarcity, displacing long-term renters, and fueling real estate speculation. In tourist-friendly cities, entire apartment buildings are being converted into defacto hotels. Investors buy up properties not to house families, but to house tourists—one weekend at a time.

This shift creates development pressure that drives up home prices and rental costs, particularly in historically working-class or racially diverse neighborhoods. Long-term tenants, many under older, more affordable leases, are often pushed out, either directly or indirectly, as landlords chase higher returns through STR conversion. The net result: fewer homes for actual residents, and a slow erosion of the cultural and social glue that holds communities together.

What Europe is Teaching Us

Cities like Barcelona, Amsterdam, and Florence have responded with aggressive regulation: capping the number of nights a property can be rented, restricting STRs to principal residences, and even banning them in some zones. The goal isn't to eliminate short-term rentals, but to rebalance the scales—ensuring that local housing needs aren’t sacrificed at the expense of the tourism industry and investor profits.

Contrast this with cities like Miami Beach, where the impacts of STRs have been especially visible—rising rents, investor-led neighborhood conversions, and increasing community tensions—yet comprehensive regulation has lagged. Despite warnings from housing advocates and mounting data pointing to destabilization, enforcement remains sporadic and legal battles with platforms persist. The result is a slow hollowing of the city’s residential core, as longtime residents are displaced by a rotating cast of short-term guests.

Miami Beach serves as a cautionary tale—not just of speculative STR activity, but of the cost of inaction. It is a place where tourism is booming (and had been for decades), but housing stability is eroding, and where policy inertia may soon become irreversible.

In recent years, several European cities have stepped up as global leaders in grappling with the unintended consequences of short-term rentals. Their message is clear: if left unchecked, the short-term rental market can destabilize local housing—and public policy must catch up.

One of the most widespread regulatory tools is the licensing system, now in place in many regions of Spain, including cities like Barcelona, Madrid, and Valencia. There, property owners must apply for a license to operate a unit as a short-term rental. These licenses are limited in number, tied to specific areas/zones, and not freely transferable, which helps prevent speculative purchasing and ensures that STRs don't overwhelm residential neighborhoods. In some cities, no new licenses are being issued or renewed at all, effectively capping the STR market.

This licensing framework has two critical benefits:

1. It brings transparency—municipalities know how many units are operating as STRs and where.

2. It enables enforcement—illegal or unlicensed listings can be penalized, including with fines or platform delisting. This approach to enforcement is also more cost effective than the reactive response to resident complaints triggering home inspections by municipal staff.

   
   

Additionally, cities like Amsterdam and Lisbon have adopted rules that restrict STRs to a host’s primary residence, and often only for a limited number of nights per year (e.g., 30 to 60 nights). This regulation is designed to prevent the conversion of entire homes into full-time tourist accommodations, while still allowing homeowners to occasionally rent out a spare bedroom or their home while they’re away.

To clarify: when STRs are limited to principal residences, it doesn’t always mean you can’t rent the whole unit—but it does mean that you must live there most of the year, and you can only rent it out for a limited period. Many cities further restrict hosts to only renting rooms within their residence—not the entire unit—unless the host is temporarily absent. This keeps STR activity aligned with the idea of “home-sharing,” not property speculation.

These layered approaches, licensing, principal residence requirements, and annual caps, are proving to be among the most effective tools in preserving housing for locals, especially in high-demand areas where tourism puts extreme pressure on affordability.

In contrast, U.S. cities like Miami Beach are experiencing many of the same pressures—skyrocketing rents, absentee landlords, and neighborhood turnover—but without the same policy muscle or enforcement systems. As a result, cities are left to manage the fallout with outdated zoning codes and reactive code enforcement strategies, while the STR market continues to outpace regulation.

A Matter of Property Rights?

Opponents of regulation often frame this as an issue of individual freedom and property rights. If someone owns a property, they argue, shouldn’t they be allowed to derive the maximum financial benefit from it?

It’s a compelling argument—until we consider the collective cost. Property rights have never been absolute; zoning, safety, and tax laws have always defined the boundaries. Regulating STRs is not about punishing owners, it’s about preserving access to a fair and functional housing market for everyone, especially for those who have fewer choices.

Is There Another Path?

Some say the answer lies not in regulation, but in building more affordable housing. Incentivize developers with tax credits. Use public land for housing. Expand subsidies and vouchers. All valid ideas—but insufficient on their own.

Why? Because while new housing takes years to materialize, STR conversions can destabilize housing supply in months. Without intervention, entire communities can flip from residential to transient in the time it takes to build a single affordable complex.

We cannot build our way out of a crisis if we’re also bleeding housing stock through unregulated conversions.

The Local Lens

The impacts of STRs aren’t the same everywhere. In rural towns with surplus housing, they may boost the local economy. But in high-demand urban centers already grappling with affordability issues, they are a form of housing extraction—extracting units from the residential market and extracting wealth from neighborhoods.

This is why local context must drive policy. But the guiding principle should be consistent: homes should be for people, not just profits.

Final Thoughts: Who Gets to Belong?

In the end, the STR debate is a microcosm of a broader societal question: Who gets to live here, and on what terms? If we’re serious about inclusive cities—places where teachers, artists, baristas, and nurses can live alongside tourists and corporate executives—then regulation isn’t just justified, it’s essential.

Short-term rentals may offer flexibility and income for some, but without guardrails, they risk hollowing out the very neighborhoods that make our cities worth visiting in the first place.