Short-term rentals (STRs) like Airbnb or VRBO have become a common — and often preferred — home-away-from-home option. Guests enjoy the privacy and additional space that comes with an apartment or an entire house. However, a recent study by Anytime Estimate found that neighbors have a different view, and it’s not pretty: 55% would rather live next to their in-laws than an Airbnb.
With nearly 2.5 million short-term rental properties across the United States, the number of users is projected to surpass 70 million by the end of this decade. The market is expected to hit $35.7 billion this year alone and top $80 billion by 2033.
Meanwhile, some cities and states are cracking down on these properties to keep their full-time residents happy. On the other side of the issue are often small business owners, who can see increased traffic from STR lodgers.
“This is a challenging issue — no one wants their community to feel like it’s been turned into a hotel,” said Paul Kromidas, CEO and founder at SummerOS. “At the same time, eliminating short-term rentals creates unintended consequences. A well-regulated short-term rental market promotes balance, offering accessible accommodation options while protecting local communities.”
Please Don’t Be My (Temporary) Neighbor
About 44% of homeowners say they’d be concerned if they learned their neighbor was operating an Airbnb, with their top worries being loud parties or events and increased crime or safety issues. This tracks with the types of guests they would be most opposed to in a short-term rental.
Only 5% of survey respondents would be okay with groups of college students or friends staying next door. Similarly, just 4% would support bachelor or bachelorette parties or a band as temporary neighbors.
Mark Severino, a real estate investor in Dallas and owner of Best Texas House Buyers, operated an Airbnb in a residential neighborhood that catered to partygoers. It had a fully furnished game room with a flat-screen TV, darts, a card table, and other fun amenities.
“That crowd was extremely loud, especially on the weekends,” he said. “It was stressful and expensive to manage. I shut it down within the year.”
Homeowners are more supportive of families, solo travelers, and business professionals renting next door. Older couples are the most appealing renters, according to 67% of those surveyed. Severino experienced this personally when an Airbnb opened next to his home.
The short-term rental was modeled after the movie “Home Alone” and had a Christmas theme. It included the life-sized Michael Jordan cutout, paint can booby traps, and a free cheese pizza. Severino said his temporary neighbors were never loud, with most being in bed by 9 p.m.
“It was always booked, and my neighbor made a killing,” he said. “That short-term rental remains the best-case scenario for a neighborhood.”
Why Are People Opposed to Airbnb in Their Neighborhood?
Few homeowners see Airbnb and other short-term rentals as good neighbors. Nearly half of the survey respondents (46%) believe STRs will negatively impact their neighborhood’s housing market, while roughly 40% foresee a decrease in the quality of life for residents. They also blame short-term rentals for driving up home prices and contributing to housing shortages.
“In markets where the housing inventory is constrained, the presence of investors seeking to purchase properties for use as short-term rentals is often viewed as unwanted competition for traditional buyers,” said Dr. Shelton Weeks, the Lucas Professor of Real Estate at Florida Gulf Coast University.
However, the 2024 State of the STR Industry report found that short-term rentals had only modest impacts on home prices and shortages. It cites a 2023 study that found that short-term rentals contributed just 0.4% of the 32.7% increase in housing prices from 2014 to 2021.
Without oversight, some investors can oversaturate markets. There’s also some evidence that STRs drive up the prices on long-term rentals.
For instance, some studies suggest Airbnb in New York City may have raised average rents by nearly $400 a year for residents. Of course, the impact largely depends on the location and the regulations a city, county, or state has in place.
“A three-bedroom home 20 miles outside Nashville operating as a vacation rental isn’t having the same housing impact as a multifamily unit in central Brooklyn,” Kromidas said. “The real problem arises when there’s no data or policy framework to distinguish between responsible and harmful STR activity.”
Most People Think STRs Are Good, Just Not Next Door
Despite their negative feelings toward having short-term rentals next door, 59% of Americans believe they’re good for the local economy. For one, the ability to list an Airbnb helps cash home buyers justify investing in homes that are in disrepair, enabling them to revitalize entire neighborhoods.
“Airbnbs are a short-cut to making unprofitable deals profitable and thereby moving distressed inventory in otherwise good neighborhoods,” said Doug Greene, owner of Cash House Closers in North Carolina.
Even a single homeowner who operates a short-term rental has an incentive to keep their property clean and well-maintained. This can have a knock-on effect on nearby houses, which can increase property values in the surrounding area.
In addition, short-term rental guests tend to spend more locally. According to the Vacation Rental Management Association (VRMA), rental guests spend an average of $1,722 per trip — money that goes directly to local restaurants, shops, and entertainment services.
The tax revenue can be significant, too. In Nantucket, Massachusetts, STRs generated $4.8 million in occupancy taxes during the summer of 2023, 10% more than the previous year. In Texas, STR spending led to more than $6.1 billion in business sales in 2022.
Ensuring a Positive Experience for Tenants and Neighbors
The short-term rental market is expected to continue growing, prompting cities, counties, and states to enact regulations governing its management. These vary from minor rules on zoning restrictions and noise ordinances to outright bans, Weeks said, and will depend on how much the local economy relies on tourism.
For instance, Leon Fisher, a Real Estate Advisor at Zook Cabins, said Santa Fe, New Mexico, will only issue one STR license every 200 feet. In New York City, owners can’t rent out an entire unit unless they live in it full time. In San Diego County, STR licenses are awarded by lottery or tied to housing availability metrics in a specific zone.
“These aren’t anti-Airbnb measures — they’re meant to protect housing availability and keep a functional residential structure in place,” he said.
In addition to abiding by state and local regulations, owners can take steps to make nice with their neighbors. Mark Sanchez, founder of Gator Rated in Florida, said he introduces himself to those living next door and gives them his phone number so they can contact him directly with any issues.
Sanchez also sets clear expectations for guests before they check in, and he does so in clear language: “This is a quiet street. No loud music, no driveway hangouts, and do not block mailboxes.” He even sends guests a one-minute video to help them understand the area’s tone and feel.
“It’s not about doing damage control after something happens,” he said. “It’s about preventing the drama altogether. That keeps the neighbor-to-guest dynamic calm and respectful without me having to constantly step in.”