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Rent gap reloaded: Airbnb and the shift from residential to touristic rental housing in the Palma Old Quarter in Mallorca, Spain

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In light of the advent of Airbnb, rent gap theory can be helpful for understanding how tourist rentals affect residential rental housing. It is argued that on those properties currently rented to residents, rental payments are not only ‘actual ground rent’, but also ‘potential ground rent’. The shift from a residential to a touristic use of rental housing thereby creates a potential ground rent. Taking as a case study the Palma Old Quarter in Mallorca, Spain, this paper analyses the evolution of the stock, prices, and revenues of residential rentals vis-à-vis tourist rentals and finds that, because it is more profitable to rent to tourists than to residents, the number of houses listed on Airbnb has increased, housing affordability for residents has shrunk, and the threat of displacement has increased.
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Urban Studies
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DOI: 10.1177/0042098018803261
Rent gap reloaded: Airbnb and the
shift from residential to touristic
rental housing in the Palma Old
Quarter in Mallorca, Spain
Ismael Yrigoy
Uppsala University, Sweden
In light of the advent of Airbnb, rent gap theory can be helpful for understanding how tourist rentals
affectresidentialrentalhousing.Itisarguedthaton those properties currently rented to residents,
rental payments are not only ‘actual ground rent’, but also ‘potential ground rent’. The shift from a
residential to a touristic use of rental housing thereby creates a potential ground rent. Taking as a
case study the Palma Old Quarter in Mallorca, Spain, this paper analyses the evolution of the stock,
prices, and revenues of residential rentals vis-a
`-vis tourist rentals and finds that, because it is more
profitable to rent to tourists than to residents, the number of houses listed on Airbnb has increased,
housing affordability for residents has shrunk, and the threat of displacement has increased.
Airbnb, Palma, potential ground rent, rent gap, rental housing, residential rental, tenure structure,
touristic rental
Received June 2017; accepted August 2018
The creation of touristic rental platforms such
as Airbnb has led to a widespread conversion
Corresponding author:
Ismael Yrigoy, Department of Social and Economic
Geography, Uppsala University, Ekonomikum,
˚rdsgatan 10, Uppsala 751 20, Sweden.
of housing units from residential to touristic
use in cities all across the globe. Framed
within rent gap theory, this paper analyses the
reasons leading to a shift from a residential to
a touristic use of housing. The article argues
that Airbnb and similar platforms are creat-
ing and exploiting new rent gaps within rental
housing because it is presumably more profit-
able to rent on a daily basis to tourists than
on a monthly basis to residents.
In order to grasp this newly opening rent
gap, this paper compares the evolution of
residential rentals vis-a
`-vis tourist rentals in
Palma Old Quarter between 2010 and 2015,
using Airbnb as a proxy for tourist rentals.
Palma Old Quarter is the historical neigh-
bourhood of Palma, the capital city of
Mallorca, Spain. The article shows that, as
more and more dwellings are converted from
a residential to a touristic use every year, rev-
enues made from tourist rentals have
increased massively (+350% in five years)
whereas revenues made from residential ren-
tals have stagnated. By 2015, the revenues
made from all of the dwellings rented to
tourists were triple the revenues made from
all the houses rented to residents in Palma
Old Quarter. Notwithstanding this difference
in the revenues made from residential rentals
and tourist rentals, because the houses rented
to tourists have increased in numbers and in
variety (in 2010 only luxury villas were
rented to tourists, whereas by 2015 all sorts
of houses were rented to tourists), the aver-
age prices of touristic houses have decreased.
On the contrary, because fewer houses are
available to rent for residents, average resi-
dential housing prices have increased.
The aforementioned empirical findings
hint at the theoretical key point of the paper.
In each residential rental, the possibility of
shifting to a touristic use creates a new high-
est and best use for the building, which in
turn creates a new potential ground rent.
Therefore, the paper proves that rental
income not only acts as actual ground rent,
as the rent gap literature suggests, but also
as potential ground rent. The potential shift
from a residential to a touristic use of hous-
ing opens up a rent gap between the actual
ground rent coming from a residential use
and a potential ground rent that could come
from a touristic use. Furthermore, shifting
from a residential to a touristic use implies
the opening of new potential ground rents
without necessarily needing ‘capital depreci-
ation in the inner city’ (Smith, 1979: 543).
This paper is structured in the following
way. The first section introduces the litera-
ture dealing with tourism’s impacts on hous-
ing, and using rent gap theory it argues that
existing theoretical accounts on the role of
rental income in creating rent gaps are
scarce and portray rental income only as
actual ground rent, not as potential ground
rent. The second section discusses the
research methods, and it emphasises that
although some questions can be addressed,
others simply cannot be because of limita-
tions in the available data. The third section
briefly introduces the Palma Old Quarter
case study and explores the 2010–2016 evo-
lution in the number, prices, and revenues of
residential rentals and tourism rental proper-
ties. It makes four main claims. First, most
of the houses to be rented are advertised for
tourists and not for residents, especially in
the tourist season. Second, the average
Airbnb prices are decreasing as non-luxury
dwellings are also increasingly commercia-
lised via this platform, whereas residential
rental prices are increasing as fewer dwell-
ings are advertised for residents. Third,
despite Airbnb’s average price decrease,
Airbnb keeps converting houses from a resi-
dential to a touristic use because in each
house rented it is more profitable to rent to
tourists than to residents. Fourth, it is
claimed that despite the shifting pattern in
prices, revenues from tourist rentals have
sharply increased whereas revenues from
residential rentals in Palma have stagnated.
2Urban Studies 00(0)
The last section explores the potential
impact of the rent gaps that are thereby
opened and presents tentative conclusions as
to the implications of these findings. It is
concluded that the massive irruption of
tourist rentals will continue as long as it is
more profitable to rent to tourists than to
residents, and that this conversion has deep
implications for residential displacement.
Touristic use of housing and the
rent gap: Missing links
Touristic uses of housing in urban
environments: The footprint of Airbnb
Touristic and recreational uses of housing
have been a major source of land rents for
decades in Spain. Second homes and, to a
certain extent, summer holiday rentals have
existed in Spain and Palma since the early
20th century (Barcelo
´, 2000; Mazo
´n et al.,
2016). These types of houses were, since the
1920s and until the irruption of Airbnb, built
for a touristic purpose and were situated in
coastal urbanisations developed for recrea-
tional purposes (Barcelo
´, 2000; Cuadrado-
Ciuraneta et al., 2017). For those types of
dwellings, Airbnb has simply provided a new
commercialising platform for existing tourist
rentals (Yrigoy, 2017). Platforms such as
Airbnb incorporate previously existing
houses with a touristic use, thus adding an
easier and far-reaching advertisement plat-
form for those houses that already had a
touristic use.
The potential of tourism for gentrification
is therefore not new. More than a decade
ago, Gotham (2005: 1100–1101) coined the
concept ‘tourism gentrification’, highlighting
how the combination of capital flowing
towards real estate and a boost in urban
tourism might become a major gentrification
driver. Gotham positions his work within
the supply-side versus demand-side gentrifi-
cation debates that have long defined
gentrification theory, stressing the signifi-
cance of consumption-oriented activities
within residential space as a means of
encouraging gentrification. According to
Gotham, these consumption-oriented activi-
ties are, in the case of New Orleans’ French
Quarter, triggering a large-scale acquisition
of properties by tourism firms, leading to a
rise in property values (Gotham, 2005:
1114). But after the irruption of Airbnb, the
scale of tourism-led gentrification has surely
intensified. On the one hand, Airbnb tends
to expand beyond the traditionally touristic
core towards the rest of the neighbourhoods
of a city (e.g. tourism gentrification in New
Orleans is expanding, and nowadays tourist
use of housing via Airbnb has expanded well
beyond the limits of the French Quarter),
and the numbers of houses used for Airbnb
has sharply increased. Nowadays, literally
tens of thousands of houses are rented to
tourists in global cities such as Amsterdam,
Barcelona, Berlin, Paris, London, Los
Angeles, and New York. Beyond the scale
issue, one important novelty of Airbnb is
that it does not particularly rely on large
investments, as Gotham’s conceptualisation
of tourism did. Airbnb is able to open up
rent gaps without necessarily having previ-
ous increases in refurbishment investments.
This vital point – that Airbnb does not
necessarily require a large investment in
order to attract tourism demand – illustrates
how Airbnb’s impact on urban milieus
remains undertheorised and understudied.
In historically gentrified cities such as
Palma, the irruption of Airbnb implies an
acceleration of the historical residential
rental market shrinkage trends in two inter-
related ways. On the one hand, before
Airbnb those houses that were pushed out
of residential rentals were following a pro-
cess of sharp depreciation that boosted the
sale of depreciated rented houses (Clark,
1992). However, the current widespread
implementation of touristic housing
Yrigoy 3
following the advent of Airbnb and similar
platforms is not necessarily characterised by
previous sharp processes of depreciation. On
the other hand, platforms such as Airbnb
have created a new tourism demand niche,
taking advantage of the global reach of
online platforms and the post-Fordist tour-
ism patterns that push for new accommoda-
tion in urban environments beyond hotels
(Wachswuth and Weisler, 2018). As a result
of these new trends, the potential impacts of
platforms such as Airbnb in terms of gentri-
fication and displacement go well beyond
the impacts that previous forms of touristic
housing have had.
Although studies in this area are still
scarce, some work has been done to address
the impact of Airbnb in different urban con-
texts (Arias Sans and Quaglieri Domı
2016; Co
´cola, 2016; Mermet, 2018;
Wachswuth and Weisler, 2018). There are
several interesting findings in all of the
above-mentioned papers that illustrate how,
in Co
´cola’s (2016) words, tourist rentals
have become ‘the new gentrification battle-
front’. First, all papers illustrate how the
majority of Airbnb ‘hosts’ are agents that
rent one or more houses during the entire
year, effectively showing that Airbnb-listed
tourist rentals do not mostly correspond to
second residence owners and/or hosts rent-
ing one room in their own house. Second,
the papers expose how the revenues that
landlords make from tourist rentals in cities
with high tourist demand tend to be much
higher than the revenues made from residen-
tial rentals. As Mermet (2018: 66) has
explained for the case of Reykjavik, ‘the
value of an entire month’s rent on the long
term market could be earned in only one
week on average on the short-term market’.
Last but not least, this literature reflects
upon how Airbnb has displaced populations
from those neighbourhoods having large
concentrations of tourist rentals. This paper
follows the same lines of inquiry as the
previous literature, particularly focusing on
the issue of the impact of tourist rentals on
residential rentals. Moreover, the paper aims
to add two key points to the aforementioned
literature: how the impact of tourist rentals
on residential rentals has evolved over a rel-
atively long time period (from 2010 to 2015)
and how the tourist rental market and the
residential rental market have changed in
such a time span.
Gaps in rent gap theory
Possibly one of the theories most widely
used to explain the production of rents in
urban environments is Neil Smith’s (1979)
well-known ‘rent gap theory’. Land rents are
conceptualised by Smith as payments to
landowners for the right to use land. In the
root of the Marxian conception of land
rents, there is the issue of tenure structure;
land rents are based on a landlord–tenant
social relation and are extracted in different
ways depending on different types of tenure.
Arguably the most common form of extract-
ing land rents from housing is the sale of
physical buildings, but there are other forms
of creating land rents such as regular income
from rental payments. Residential rentals
are understood here as those land rents
obtained from rental contracts paid on a
monthly basis and lasting for months or
years, whereas tourist rentals are understood
as those rentals that are very short-term
(usually less than a week) and that are usu-
ally paid on a daily basis.
Since Smith’s initial article describing rent
gap theory, several scholars have engaged in
theoretical debates – e.g. Bourassa (1990,
1993) and Clark’s (1992, 1995) exchange –
and have performed in-depth empirical stud-
ies (for an excellent review, see Lees et al.,
2008: 55–89). Two key concepts were coined
by Smith to explain how rent gaps work –
‘actual ground rent’ and ‘potential ground
rent’. Potential ground rent refers to the
4Urban Studies 00(0)
income that landlords would receive ‘under
the land’s highest and best use’ (Smith, 1979:
543), and actual ground rent refers to the
income that landlords are currently receiving
for the use of the housing unit ‘given the
present land use’ (Smith, 1979: 543). There
are, however, two key issues within current
rent gap studies concerning the current case
study that remain under-scrutinised.
First, the rental sector itself is scarcely
studied within rent gap studies. Indeed, rent
gap theory tends to focus mainly – if not
only – on the rents coming from the sale of
buildings, not taking into account how these
gaps operate within the rental sector. In
Clark’s words (1992: 18), ‘Rent gap theory
suffers from insensitivity to other forms of
tenure [beyond ownership]’. Very few studies
have dealt with the role of the rental sector
in creating rent gaps. There have neverthe-
less been two theoretical threads within rent
gap theory that have partially addressed the
rental issue. On the one hand, Smith (1979:
544) argued that as neighbourhoods depreci-
ate, landowners tend to rent out houses in
depreciated neighbourhoods, and thus there
is a tenancy shift from ownership to rental.
Rental income appears thus as another pos-
sible way of accruing actual ground rent.
According to Smith (1979: 543), ‘In the case
of rental housing where the landlord pro-
duces a service on land he or she owns, the
production and ownership functions are
combined and ground rent becomes even
more of an intangible category though nev-
ertheless a real presence; the landlord’s
actual ground rent returns mainly in the
form of house rent paid by the tenants]. On
the other hand, Hamnett and Randolph
(1984) and Clark (1992) made a step for-
ward from Smith’s argument, and they
argued that a ‘gap’ might also arise between
the present rental income of a rented prop-
erty and the rent that a landowner would get
from selling the property (instead of renting
it). Both authors argued that there is a need
to integrate these rental-rooted ‘gaps’ within
the broader rent gap theory. In the above-
mentioned papers, it is assumed that a prop-
erty sale will imply a larger rent than rental
payments. But what is missing from the pre-
vious literature is that rental-based rents are
not only ‘actual ground rents’, as Smith
(1979) and Clark (1992) point out, but can
also be signals of ‘potential ground rents’ as
this paper demonstrates. Indeed, different
kinds of rental rents can at the same time
represent actual ground rents and potential
ground rents.
Second, rent gap theory is based on the
idea that the built environment needs depre-
ciation, and eventually devaluation, in order
to create rent gaps. ‘Depreciation produces
the possibility of profitable reinvestment’.
claims Smith (1979: 542), because it is pre-
cisely this depreciation that actually creates
the gap between actual ground rent and
potential ground rent. As Smith (1979: 545)
puts it, ‘The rent gap is produced primarily
by capital depreciation (which diminishes
the proportion of the ground rent able to be
capitalized)’. This idea has been echoed by
Clark, who argues that ‘as the building
depreciates, it will have a depressing effect
on actual land rent, and the gap between
potential rent and actual rent will increase’
(1987: 79). Nevertheless, what the current
paper demonstrates is that in order to create
potential ground rents, depreciation of the
built environment is not a condition sine qua
non for the creation of rent gaps. The very
process of shifting to a touristic use, irrespec-
tive of depreciation dynamics, creates poten-
tial ground rents. Equally important, Airbnb
is able to capitalise on potential ground rent
without necessarily pursuing a physical reno-
vation or physical upgrading of the built
environment (i.e. a dwelling can be in a bad
state, but there still will be a gap between the
actual ground rent in the form of rental pay-
ment and the potential ground rent if this
rental payment is executed via Airbnb).
Yrigoy 5
Together with the fact that the touristic
use of housing remains understudied, the
need for further theorisation of the role of
rentals within rent gap theory – regarding
the lack of acknowledgement of rentals as
potential ground rent and the not so central
role of depreciation in creating rent gaps –
demands the empirical scrutiny of Airbnb
dynamics. Nevertheless, this is by no means
an easy task, as the available data remain
scattered and scarce.
Research methods: Challenges
and limits
Because a potential shift from a residential
to a touristic use of housing creates a ‘high-
est and better use’ for housing buildings, a
new potential ground rent is created.
Therefore, the key empirical task carried out
in this paper is to measure the gap between
residential rental prices (used as a proxy for
actual ground rents) and touristic rental
prices (used as a proxy for potential ground
rents). How to measure such a gap? The
empirical ground of this paper faces some
basic, and to some extent, insurmountable
limits. As Lees et al. (2008: 59) have put it,
‘Unfortunately, the rent gap involves con-
cepts that are extremely hard to measure:
nothing close to the phenomenon of actual
ground rent appears in any public database
or accounting ledger’. Moreover, despite the
popularity of rent gap-related debates, there
have been very few authors who have actu-
ally empirically addressed such issues.
Clark (1987) was the first to provide a
comprehensive empirical method to measure
actual ground rents and potential ground
rents. Using tax assessment data, he first dis-
tinguished between land value and housing
value – which he considers to be an equiva-
lent of actual ground rent. According to
Clark, the tax assessments are not updated
to the real market values, and he used sale
prices to calculate the real value of housing
units and used tax assessments to distinguish
which share of sale prices corresponded to
land value and which share corresponded to
actual ground rent in each housing unit ana-
lysed. He then calculated the potential
ground rent from sale agreements prior to
and after redevelopment. Following Clark,
Badcock (1989: 129) used sale prices of
undeveloped land and housing as proxies for
actual ground rent and potential ground
rent. Likewise, Hammel (1999) used Clark’s
formula of using tax assessment data with
sale prices to calculate actual ground rents
and sale prices prior to and after develop-
ment. To calculate potential ground rents.
In Yung and King’s (1998) study of how
actual ground rents change as housing units
approach the city centre, they used sale
prices as proxies for land rents. Following
Yung and King (1998), Porter (2012) also
studied the price evolution of housing units
in accordance with their distance to the city
centre. In a nutshell, prices have been used
in the few existing empirical tests of the rent
gap theory as proxies for rents. Yet, to the
best of our knowledge, there have been no
empirical studies addressing the rent gap
issue within the sphere of rental prices.
Inspired by Clark (1987), we used rental
prices as proxies for rent gaps within the
rented properties. Residential rental prices
were used as a proxy for actual ground rent,
and touristic rental prices were used as a
proxy for potential ground rent.
We used a three-step process to analyse the
data (see Table 1). The first step consisted of
creating data showing the spatial and tem-
poral evolution of touristic and residential
rental stocks (Figures 1 and 3). The data refer-
ring to the evolution of residential rental stock
between 2010 and 2016 (Figure 3) were
obtained directly from the 2011 Spanish cen-
sus for the years 2010 and 2011, whereas for
the 2012–2016 period they were estimated
based on two scenarios. One scenario assumed
6Urban Studies 00(0)
that the historical evolution of residential
rental stock followed the same evolution as
the whole Balearic region – which decreased
between 2011 and 2016. The second scenario
assumed that the housing stock remained con-
stant between 2011 and 2016.
The second step consisted of analysing
the evolution of touristic and rental prices
for the period studied (Figures 2 and 4). The
real estate intermediaries’ webpages Idealista
( and Fotocasa
( were used to study
rental housing price evolution in Palma Old
Quarter from 2010 to 2016. The data regard-
ing Airbnb prices were obtained from Inside
Airbnb ( and Airbnb
( for the period of 2015–
2016 and extrapolated to the previous years.
Airbnb prices were multiplied by the number
of days each advertisement was available per
year. Because the only available data regard-
ing prices and availability were from 2015
onwards, the price evolution patterns
between 2015 and 2016 were used as a proxy
to estimate the price evolution of 2010–2014,
assuming therefore that price patterns had
remained constant in each listing. The seaso-
nal variations in prices and the total number
of houses listed were addressed through
average price calculations taking into
account three different data ‘cuts’ for the
year 2016: one in January (obtained via
Inside Airbnb), one in May (our own web
scraping of the Airbnb website), and an
additional one in October (our own web
scraping of the Airbnb website). Additional
information on average annual prices was
obtained via Airdna reports for the 2015–
2016 period.
In the third step, gross rental revenues
were calculated (Figure 5). In the rental sec-
tor, this data set was obtained by multiply-
ing the annual rental prices by the estimated
number of residential rentals. In the case of
Airbnb’s gross revenues, the monthly prices
of each listing were multiplied by the num-
ber of days or months each listing was avail-
able and by the annual stock of houses listed
on Airbnb each year.
Furthermore, the work faced the limita-
tion that there is no available source detail-
ing what the previous use was of those
houses rented to tourists. Of course, a great
deal of these dwellings were primary resi-
dences, but it might also be the case that
some of the dwellings that now are rented to
Table 1. Indicators, methods, and data sources used in the article.
Indicator Method Data source
Spatial spread of Airbnb (Figure 1) Kernel density (ArcGIS spatial
InsideAirbnb/Airbnb website
Residential rental stock evolution
(Figure 3)
Estimations from website 2011 Spanish census/Idealista
Airbnb stock evolution (Figure 3) Direct extraction from website Airbnb/Insideairbnb websites
Average residential rental/sale
prices (Figures 2 and 4)
Direct extraction from website Idealista/Fotocasa websites
Average Airbnb prices (Figure 4) Direct extraction/extrapolation Airbnb/Airdna/Insideairbnb
Average rental gross revenue
(Figure 5)
Multiply monthly prices *
number of houses to be rented
Idealista websites
Average Airbnb gross revenue
(Figure 5)
Multiply average daily prices *
days occupied *number of
houses listed on Airbnb
Source: Own elaboration.
Yrigoy 7
Figure 1. Airbnb units per 50 m 350 m cells in Palma Old Quarter (2010–2015).
Source: Own elaboration from Insideairbnb (2016).
8Urban Studies 00(0)
tourists were secondary residences or empty
houses. Even if the exact number of houses
that have been converted from a residential
to a touristic use cannot be grasped quanti-
tatively, the aforementioned use of prices as
proxies for rents does grasp the potential
impact of tourist rentals on the residential
market as a whole.
All of the preceding information begins to
explain why the empirical focus of this arti-
cle is primarily on Palma Old Quarter. First,
this is one of the geographical areas in Spain
where tourist rentals have raised a good
deal of attention, and thus more quantita-
tive information is available to carry out
such a study. Moreover, Palma is one of
Figure 2. Sale and rental prices (e/m
) in Palma.
Source: Own elaboration from Fotocasa (2016) and Idealista (2016).
Figure 3. Residential rentals and Airbnb rentals estimation.
Source: Own elaboration from Airbnb (2016), Airdna (2017), INE (2016b) and Insideairbnb (2016).
Yrigoy 9
Figure 4. Difference in average residential rental and Airbnb rental markets.
Source: Own elaboration from Airbnb (2016), Idealista (2016), Insideairbnb (2016), and Fotocasa (2016).
Figure 5. Residential rental and touristic rental revenues (2010–2015).
Source: Own elaboration from Idealista (2016), Fotocasa (2016) and INE (2016a).
10 Urban Studies 00(0)
Spain’s foremost tourism cities, and this
means on the one hand that it is one of the
spots where possibly Airbnb is more clearly
producing potential ground rents, and on
the other, Palma has been historically one
of the cities where tourism has boosted the
housing sector, often leading to gentrifica-
tion processes.
Palma Old Quarter: Increasing
the potential ground rent by
switching to tourist rents
Contextualising Airbnb in Palma Old
Quarter’s housing dynamics
Since the early 1960s, Palma has been a tour-
ist attraction complementary to the sea and
sun spots across the island. The neighbour-
hood analysed here – Palma Old Quarter – is
the historical part of the city, located at the
very geographical centre of the city of
Palma. This quarter has 22,847 inhabitants,
out of the 400,578 total inhabitants of Palma
(INE, 2016a). Within the contours of Palma,
most of the tourist attractions such as histor-
ical landmarks, retail stores, and nightlife
are located within Palma Old Quarter. As a
result, it is a neighbourhood that has had a
story of gentrification and a shrinking of the
residential rental market that long precedes
the irruption of Airbnb.
From 2001 to 2011, there was a decrease
in the stock destined to residential rentals
from 4651 down to 2251 houses in Palma
Old Quarter (INE, 2016a, 2016b). Not only
did rental housing decrease between 2001
and 2011, but the primary residence use of
housing stock shrank as primary residences
decreased from 12,986 houses in 2001 to
5270 houses in 2011. Several authors framed
these shifts within wider gentrification pro-
cesses triggered by neoliberal urban projects
(Franquesa, 2007; Morell, 2009; Vives-Miro
2011). The Sa Gerreria area within Palma
Old Quarter vividly visualises such
processes. In the 1970s and 1980s this area
was the red-light district of Palma, widely
known for being a centre for prostitution
and the drug trade. According to Vives-
´(2011), a massive urban renewal pro-
cess triggered by a municipal-led internal
reform plan implemented in the mid-1990s
led to a substantial increase in the sale prices
of the refurbished dwellings in the area.
Indeed, the selling prices in Sa Gerreria were
more than four times below the city average
before the internal reform plan was
approved, whereas in 2008 Sa Gerreria
prices more than doubled Palma’s average
sale prices (Vives-Miro
´, 2011). The increased
gentrification in the early 2000s led to a mas-
sive increase in prices, which stopped
because of the financial crisis of 2008.
Between 2008 (the start of the economic cri-
sis) and 2012 (the widespread popularisation
of Airbnb in Palma Old Quarter) average
residential sale prices remained steady at
around e2500/m
, whereas rental prices
slightly decreased from an average of e9/m
down to e8/m
(Fotocasa, 2016; Idealista,
2016). Even if the slight depreciation as a
result of the crisis is considered, the Palma
Old Quarter shows that residential rental
prices were not particularly depressed prior
to the irruption of Airbnb. That is, the
potential ground rents created by Airbnb
have not required a previous process of
sharp depreciation – even though they can
benefit from episodes of depreciation – and
it is only the potential switch towards a
‘higher and better use’ that has produced
such a rent gap.
Within this already heavily gentrified
area, there has been a massive blossoming of
dwellings listed on Airbnb (see Figure 1).
The geographical and temporal spread of
Airbnb in Palma Old Quarter has mainly
taken place between 2012 and 2015, when
most of these advertisements were created.
Official estimations calculate that in 2016 up
to 70% of Palma’s city tourist beds consisted
Yrigoy 11
of touristic housing rentals, and thus only
30% consisted of hotels, hostels, and other
traditional accommodations (Govern de les
Illes Balears, 2016).
In a nutshell, the pre-crisis housing mar-
ket dynamism is currently being revived by
the irruption of Airbnb, which in particular
is shaking up residential rental properties.
Former primary residences and secondary
residences are now being rented to tourists
via platforms such as Airbnb. As stated
above, it is unclear what proportion of
Airbnb listings existed before as secondary
residences or residential rentals, but regard-
less of this the conversion of housing to
tourist rentals is deeply impacting the resi-
dential rental market. First, dwellings that
could be potentially rented to residents are
now offered to tourists. Moreover, the
impact of Airbnb on residential rental hous-
ing consists not only in a scarcity of residen-
tial rentals because of a potential shift to the
touristic ‘highest and better use’, but Airbnb
also increases the perception of such scarcity
and contributes to the appreciation of rental
This Airbnb-led housing market dyna-
mism differs from previous housing bubbles
in Palma Old Quarter in two senses. On the
one hand, while in previous housing bubbles
housing sales were shrinking the residential
rental market, the current contraction in the
residential rental market is not driven by the
sales market, but by the irruption of tourist
rentals. On the other hand, the current revi-
talisation of the housing market has
impacted mainly rental prices, but not so
much sale prices, and while rental prices
increased from 2014, and by 2016 had
reached pre-2008 levels, housing sale prices
have continuously decreased since the crisis
erupted (see Figure 2). Significantly, this
recent increase in residential rental prices is
correlated with the expansion of tourist ren-
tals, and following the massive boost of
Airbnb rentals in Palma – which was
particularly intense between 2012 and 2013 –
residential rental prices first stabilised and
then increased from the middle of 2013
As the following section will show, these
two new major impacts of Airbnb on the
residential sector – a shrinking of available
residential rental dwellings and an increase
in residential rental prices – is due to the fact
that tourist rentals have emerged as a new
‘highest and best use’ for residential rentals.
The particular technological ease of reaching
a global market, and the conception of
Airbnb and similar platforms as large-scale
providers of a ‘new’ type of accommodation
in urban environments, have smoothly cre-
ated the demand conditions that allow resi-
dential rentals to find a ‘higher and better
use’ if converted into a touristic use.
Residential rentals vis-a
`-vis tourist rentals
In order to unravel how potential ground
rents are created in the rental market, a com-
parison between residential rentals and tour-
ist rentals was carried out. The main spheres
of comparison were housing stock, adver-
tisements, prices, and revenues.
Stock and advertisements. As previously
stated, from 2001 to 2011 the number of
houses rented in Palma Old Quarter
decreased from 4651 to 2245 (INE, 2016a,
2016b). It is unlikely that the residential
rental stock has increased in these years
because there was a stagnation of the rental
tenancy in the Balearic archipelago (from
26.41% of the housing stock in 2013 to
26.28% of the housing stock in 2015, INE,
2016c), and in the Old Quarter itself there
was a decrease in population from 24,220
inhabitants in 2010 to 22,487 inhabitants in
2015 (INE, 2016d). Nonetheless, two feasi-
ble scenarios have been considered regarding
the evolution of the residential rental stock
in the case study: (1) the 2001–2011 decrease
12 Urban Studies 00(0)
kept going at the same pace in the 2012–
2016 period; or (2) the number of houses
rented in Palma Old Quarter has not
changed significantly since 2011.
No matter which of the two scenarios is
taken into consideration, the total number
of Airbnb rentals in the Old Quarter is still
smaller than the total number of houses
rented for residents (see Figure 3). In 2011,
there were 2245 houses rented in the Old
Quarter, but only 20 were rented in the
Airbnb market (Inside Airbnb, 2016). Even
in 2015, the number of houses rented on
Airbnb was 256, less than 20% of the resi-
dential housing stock (if the lower estimation
in Figure 3 is considered). The emergence of
Airbnb has not meant a significant shift in
the shrinking tendency of the residential
rental stock because its decline started long
before Airbnb existed. Nevertheless, it is sig-
nificant that residential rentals are not
increasing or are decreasing while at the
same time tourist rentals are massively
Beyond the stock issue, the blossoming of
Airbnb is having important effects on the
new rental offers available for residents.
There are important differences between the
quantity of long-term residential rents and
the short-term tourist rentals offered on
websites between peak touristic season and
low season. On 5 May 2016, at the beginning
of the tourist season, 65 advertisements were
available for residential rentals in Palma Old
Quarter on the two leading web pages adver-
tising residential rentals, Fotocasa (2016)
and Idealista (2106). This is in sharp contrast
with the Airbnb website, which on that very
day had 405 advertisements available. On 31
October 2016, after the tourist season was
finished, there were 94 advertisements for
residential rentals and 146 on the Airbnb
market. Obviously, the residential rentals
availability is highly affected by the tourist
season – when the tourist season starts, the
residential rental market shrinks. But even
once the tourist season has ended, there are
still many more rentals available from
Airbnb than in the residential market.
Moreover, and contrary to other cities,
most of the Airbnb advertisements in Palma
Old Quarter do not combine a residential
and touristic use and have an exclusively
touristic use. Palma has the highest rate of
both availability and share of entire homes
rented of all European cities analysed by
Insideairbnb (Haar, 2018: 6). Indeed, 85%
of Airbnb beds correspond to houses that
are rented entirely, and 15% correspond to
rooms that are rented to tourists in houses
with residential purposes. Of houses posted
on Airbnb, 70% are rented the whole year,
and the average number of days available to
rent is 309 days/year, that is, these are avail-
able for rent at least ten entire months per
To summarise, residential rentals seem to
be in a steadily decreasing situation, whereas
Airbnb rentals are clearly increasing. Rental
houses that are to be placed on the market
are increasingly commercialised via Airbnb
and not on other residential-oriented web
pages; therefore, the decrease in newly avail-
able residential rental offers is directly
related to the rise of Airbnb. Significantly,
and as it is argued below, the irruption of
Airbnb is not only a matter of switching
towards an online platform, but it is mainly
a matter of shifting from residential rentals
towards more profitable tourist rentals.
Prices and revenues. The above-mentioned
shifts in the available stock of residential
and tourist rentals has greatly impacted the
price patterns of both residential and tourist
rentals. Following the economic crisis, resi-
dential rental prices decreased slightly from
2010 to 2012, but as Airbnb appeared on the
scene and residential rentals became more
and more scarce, residential rental prices
first stabilised and then increased from mid-
2013 onwards. From 2010 to 2015, average
Yrigoy 13
residential rental prices increased from e794/
month in 2010 to e885/month in 2015
(Fotocasa, 2016). On the contrary, average
touristic rental prices decreased from e3160/
month in 2010 to e2333/month in 2015
(Airbnb, 2016) (see Figure 4). This immedi-
ately poses important questions. How can it
be that Airbnb prices, which supposedly rep-
resent the potential rent for residential ren-
tals, are decreasing? And to what extent
does this mean that the rent gap is being
The increase in the number of houses
rented to tourists and the diversification of
the type of houses rented via Airbnb is what
ultimately explains the constant decrease of
Airbnb average prices. Indeed, from five
highly luxurious houses rented on Airbnb in
2010, the number of houses rented via this
app increased to 256 by 2015. As the tour-
ism rental market expanded, the typology of
houses rented via Airbnb became more
diverse. If in 2010 only large, very luxurious,
and renovated houses were rented via
Airbnb, by 2015 all imaginable sorts of
dwellings were rented. From brand new lux-
ury villas to non-renovated one-room houses
or shared rooms, every kind of dwelling is to
be found on Airbnb. Of course, because not
only luxury houses have been rented, but
also more standard units, average rental
prices have tended to decrease. Owing to the
high tourism demand of the Old Quarter, it
seems that every type of house, no matter
how well located, or how heavily renovated
it has been, is potentially leasable for tour-
ists. But the massive enlargement of the
touristic rental market has also meant
changes in the occupancy ratios of Airbnb
dwellings, and thus in the prices and reven-
ues of the sector.
At the same time as the number of the
houses rented via Airbnb has increased and
its average price has decreased, the opposite
trend has taken place with residential ren-
tals. While tourist rental advertisements have
increased in both number and variety, resi-
dential rental advertisements have evolved in
the opposite direction. In 2010 there were all
imaginable types (and prices) of residential-
oriented houses for rent in the Old Quarter,
but by 2016 these types of advertisements
were not only very few, but also for very spe-
cific types of dwellings. Indeed, the very few
houses rented for residential use by 2016
were mostly large and luxury flats in the sur-
roundings of Jaume III and Passeig de
Mallorca streets. These are streets that were
built between the 1950s and 1970s by tearing
up the ancient urban morphology, and thus
they do not fit into the touristic cliche
´of the
‘renewed old house within a historical quar-
ter’ that attracts most Airbnb users in Palma
Old Quarter. To sum up, the type and loca-
tion of residential rentals correspond to
those housing units that are not attractive to
Airbnb users.
As Airbnb covers a greater variety of
housing typologies and Airbnb prices
decrease, still more and more advertisements
appear on the Airbnb webpage and the price
differences between touristic and residential
use remain. In this regard, Airbnb is opening
up new possibilities to economically exploit
properties. Airbnb listings keep increasing
even as average prices decrease because in
each housing unit the rents extracted from
tourist rentals are greater than rents
extracted from residential rentals. Even in a
deteriorated small house, tourist rentals are
superior to residential rentals. This explains
why the number of houses listed on Airbnb
keeps increasing, and also why revenues
coming from Airbnb are increasing even if
the average prices are decreasing.
Indeed, gross revenues in Palma Old
Quarter’s residential rentals have ranged
between a 40% decrease and a 12.6%
increase over the last five years – depending
on two different estimations (see Figure 5).
At the same time, gross revenues from tour-
ist rentals in Palma Old Quarter have
14 Urban Studies 00(0)
increased by +350% as more and more
houses are listed on Airbnb. By 2012, the
revenues coming from tourist rentals had
surpassed the revenues coming from residen-
tial rentals. By 2015, revenues coming from
the tourist rentals in Palma Old Quarter
were triple the revenues coming from resi-
dential rentals, even though the number of
houses rented as residential rentals was four
times larger than the number of houses
rented to tourists. At the same time as reven-
ues from Old Quarter tourist rentals
increased, the revenues coming from residen-
tial rentals only slightly increased or
decreased. That is, for most of residential
rentals in Palma Old Quarter, a new poten-
tial ground rent can be extracted if residen-
tial rentals are converted into tourist rentals.
To sum up, the role of tourist rentals as
potential ground rents for those dwellings
currently being rented to residents implies
less residential rental stock available and an
increase in average rental prices for resi-
dents. This has relevant implications for dis-
placement in two interrelated ways. On the
one hand, individuals living in Palma Old
Quarter are increasingly pushed towards
other areas of the city and/or the sales mar-
ket because residential rentals are increas-
ingly less and less affordable for the average
resident in Palma Old Quarter. The 2011
census data showed that roughly 90% of the
population living in Palma Old Quarter
(part-time employed, low-skilled wage earn-
ers, students, and pensioners) would have
difficulties paying rental contracts if they
had to enter into Palma Old Quarters’ resi-
dential rental market today (INE, 2016a).
By the same token, those of this 90% cohort
living nowadays in residential rentals in the
Old Quarter (and having the same economic
status as in 2011) are facing an increased risk
of being expelled from their rented houses
once their contracts are revised and updated
to the new standard rental prices or when
their homes are converted into tourist
rentals. On the other hand, those who are
not living in Palma Old Quarter but willing
to live there via the rental sector have fewer
chances to get a house in the Old Quarter
than in other areas. Considering official data
regarding average salaries, the share of one’s
gross salary that one individual might need
to pay for residential rent in Palma Old
Quarter would account for 40–45% of the
salary without taking into consideration
costs such as water, electricity, car parking
or heat, which are in most cases excluded
from rental prices (INE, 2016e). Airbnb-led
rent gaps are thus creating the economic
conditions for a significant population dis-
placement, which is starting to take place
and will probably soar in the years to come.
Concluding remarks
This paper has introduced new theoretical
insights into rent gap research. First, the
paper has demonstrated that rental income
acts as potential ground rent. In previous
rent gap studies, it has often been argued
that there is a gap between actual ground
rents from rental income and potential
ground rents coming from sale and purchase
that eventually lead to a conversion from
rental towards ownership tenancy.
Nevertheless, this paper has shown not only
that actual ground rents are extracted from
rental housing, but also that rental income
can act as potential ground rents for housing
as well. In those cities such as Palma where
there is enough tourism demand to have
high occupancy ratios in tourist rentals, a
touristic use represents a ‘highest and better
use’ for residential rental housing because
payments on a daily basis are more lucrative
for homeowners than payments on a
monthly basis. The opening of new potential
ground rents through a touristic use not
only leads to a conversion from a residential
to a touristic use, but it also leads to an
increase in the residential rental prices.
Yrigoy 15
Moreover, the high potential rental returns
from touristic rental options are increasingly
luring investors to Palma Old Quarter, who
try to build up entire buildings in order to
convert them to touristic use. This increased
interest by investors in Palma Old Quarter
housing for its potential touristic use is lead-
ing to an increase in the housing transac-
tions in the area, and also of their sale
prices. The impact of tourist rentals on the
dynamics of housing sale markets is an issue
that needs to be scrutinised in future
Second, Airbnb is expanding the rent
potential of housing without necessarily
needing a depreciation of the built environ-
ment or a renovation of the existing housing
stock. Indeed, Palma Old Quarter under-
went a process of gentrification and physical
renewal in the years prior to the emergence
of Airbnb that greatly revalued real estate.
Regardless of this, Airbnb opened up the
possibility for new ground rents, as the
+350% increase in the revenues made by the
touristic rental sector in Palma Old Quarter
between 2010 and 2015 clearly illustrates. In
the rent gap literature, the increase in the
value of housing is ultimately explained by
the labour-intensive process of investment
and refurbishment, which leads to apprecia-
tion and eventually to revaluation (Smith,
1979). But in the case of Palma, the appre-
ciation taking place in tourist rentals does
not seem to be particularly rooted in a
labour-intensive wave of structural refurb-
ishment. Does this mean that there is no
labour involved in tourism-rooted housing
appreciation? Not at all, but it probably
means that labour is embodied in the touris-
tic housing appreciation in different ways
than those envisaged by rent gap theorists.
This is yet another point that needs to be
further explored in future research.
Most likely, the rent gap that Airbnb has
opened in touristic cities such as Palma will
only be closed when the occupancy ratios of
Airbnb decrease. This will eventually happen
because the number of houses offered to
tourists keeps increasing and at some point,
the tourism demand will not be able to
increase at the same pace as the tourism
housing supply. Furthermore, if the residen-
tial rental prices keep increasing and tourist
rentals occupancy ratios decrease, Palma
Old Quarter will reach a point at which it is
actually less profitable to rent to tourists
than to a resident. It will be then when the
rent gap opened by Airbnb will be closed.
Notwithstanding how fast this gap is closed,
the widespread use of housing for tourist
rentals is being realised at a social cost
because access to housing for residents is
increasingly difficult, leading to displace-
ment of the local population. Indeed,
because the residential use of rental housing
represents a barrier to Airbnb rents creation
(some houses cannot be reconverted into
tourist rentals as long as residential tenants
have a contract in force), this barrier is
erased via different strategies of displace-
ment. The fact that rental payments are paid
on a daily basis, the presumably different
costs for the homeowner between daily and
monthly rentals, and the effects of seasonal-
ity on tourist rentals, are additional key
aspects that are shaping tourist rentals, and
this will need to be explored in future
research on the topic.
Many thanks to Brett Christophers, Don Mitchell
and three anonymous reviewers for the helpful
comments on earlier drafts of the article. The
usual disclaimers apply.
The author(s) disclosed receipt of the following
financial support for the research, authorship,
and/or publication of this article: This article was
funded by the ’Crisis and Restructuring of the
Spanish Tourist Coast’ (CSO2015-64468-P)
research project funded by the Spanish Ministry
16 Urban Studies 00(0)
of Economy and Competitiveness and the
European Regional Development Fund (ERDF).
1. There are of course other online platforms
that also offer tourist rentals in Palma Old
Quarter. Nevertheless, because of the lack of
data available for other platforms, we have
chosen to use Airbnb – which is by far the
largest platform used in the touristic rental
market – as a proxy for the whole touristic
rental market. From now on, ‘Airbnb rental
market’ and ‘touristic rental market’ are used
as synonyms. We have assumed that, because
Airbnb is mostly based on daily payments,
those using Airbnb are ‘tourists’; whereas
those using monthly contracts are ‘residents’.
Therefore, Airbnb contracts are considered
here to be exclusively ‘tourist rentals’; whereas
other forms of long-term rentals are consid-
ered to be exclusively ‘residential rentals’.
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18 Urban Studies 00(0)
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... A total of 88.41% were whole homes, with all the negative impacts that this implies for the conventional rental market. Although there are no specific studies for Ibiza, these impacts have been demonstrated in other cities, such as Palma in neighbouring Mallorca [5,60] and in Minorca [61]. These repercussions include a drop in the availability of conventional rental properties and, as a result, an increase in rental and real estate prices-factors that force local residents to search for housing elsewhere. ...
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In recent years, there has been a big shift in analyses of historic centres, with the spotlight turning from the issue of urban degradation and the ageing population to studies of the risks associated with touristification and gentrification. The island of Ibiza is one of the Mediterranean’s leading tourist destinations, and its capital is one of the fifteen Spanish cities declared as World Heritage Sites (UNESCO). This study aimed to explore the touristification of Ibiza’s historic centre (a World Heritage Site). To do so, it explored three interrelated variables, the historic centre’s demographic dynamics, tourist accommodations, and heritage, through an analysis of heritage interventions derived from the UNESCO declaration. The methodology was based on the statistical use of demographic and tourism accommodation data on an inter-urban scale by mapping the main results, as well as on a study of the heritage data from the municipal catalogue. We concluded that the old city is in a state of change, both socially (with a demographic decline and drop in the native population) and culturally. All this reinforces its role as a supplier of complementary tourism services and as a museumized space for sun and sand resorts in the rest of the city and throughout the island.
... Focusing on Airbnb, the leading platform of short-term rentals acting as an intermediary between host and the guest who wants to rent accommodation for a short period, this article investigates the spatial pattern of Airbnb in Italy and scrutinizes the location of listing and revenues performances as related to the supply of hotel beds and population density. Indeed, the rapid spread of Airbnb globally has given rise to numerous studies investigating the nature of the phenomenon from an economic, spatial, and political point of view, mostly focusing on single case studies (Balampanidis et al., 2019;Cocola-Gant, Gago, 2019;Fang et al., 2020;Freytag, Bauder, 2018;Semi, Tonetta, 2020;Yrigoy, 2019) while fewer show the multiple geographies of Airbnb at national or macro-regional level (Adamiak, 2018(Adamiak, , 2019Crommelin et al., 2018;Jiao, Bai, 2019) 1 . Within this debate, this article aims to fill the «scalar gap» of the Airbnb research. ...
Airbnb has been at the forefront of the reshaped hospitality industry for more than a decade. The Covid-19 pandemic, by limiting people’s mobility, radically affected tourism and hospitality sectors with a drastic reduction in the apparently incessant advance of Airbnb spread, in Italy and beyond. As data in 2020 are not yet fully available, this article depicts the spatial distribution of Airbnb in Italy in 2017-19 as a basis situation for future analysis inquiring the effects of the pandemic. The study is conducted by using a dynamic panel model, with GMM-SYS estimation. Results show that, despite sharing economy is proposed as fair and equipotential, Airbnb turns out to be highly selective. The evidence indicates that «access» alone, even if favored by platforms, does not guarantee market power, and performances are much more concentrated than listings. Moreover, the urban appeal of Airbnb is confirmed; traditional hospitality turns out to be a significant predictor of Airbnb presence and performances; the economic condition of unemployment is positively associated with Airbnb presence.
... Esta preocupación ha sido muy patente en el caso andaluz, un territorio con una creciente especialización turística. El impacto de las plataformas p2p (red de pares, peer-to-peer en inglés) respecto de la flexibilización del alojamiento turístico empezó a notarse con la recuperación del turismo tras la crisis de 2008, cuando algunas organizaciones ciudadanas y voces académicas alertaron sobre los efectos perniciosos de esta actividad en el parque de viviendas, así como en otros aspectos de la vida en las ciudades (Guttentag, 2015;Yrigoy, 2019;Barrero & Jover, 2020). Cuando todavía no era posible dimensionar el impacto de estas innovaciones técnicas y de gestión sobre el mercado inmobiliario, la reforma de la Ley de Arrendamientos Urbanos (LAU) de 2013 excluyó de su ámbito la regulación de este tipo de alojamiento. ...
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Barcelona’s Superblocks project is analyzed from an urban perspective. It takes into account the main changes that planning has undergone since the deregulation of the Keynesian Fordist State and its emphasis on the local scale and municipal administration. In this context, the main objective of the study is to identify the ideas or foundations that guide Barcelona’s Superblocks project, which is still pending execution. The idea of the city conveyed by these ideas is reflexively evaluated. The research focuses on the residential and retail function, with special emphasis on the so-called proximity retail in a context of global retail emergency
... Esta preocupación ha sido muy patente en el caso andaluz, un territorio con una creciente especialización turística. El impacto de las plataformas p2p (red de pares, peer-to-peer en inglés) respecto de la flexibilización del alojamiento turístico empezó a notarse con la recuperación del turismo tras la crisis de 2008, cuando algunas organizaciones ciudadanas y voces académicas alertaron sobre los efectos perniciosos de esta actividad en el parque de viviendas, así como en otros aspectos de la vida en las ciudades (Guttentag, 2015;Yrigoy, 2019;Barrero & Jover, 2020). Cuando todavía no era posible dimensionar el impacto de estas innovaciones técnicas y de gestión sobre el mercado inmobiliario, la reforma de la Ley de Arrendamientos Urbanos (LAU) de 2013 excluyó de su ámbito la regulación de este tipo de alojamiento. ...
Conference Paper
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Se analiza el proyecto Superilla Barcelona desde la perspectiva urbana, teniendo en cuenta los principales cambios que ha experimentado la planificación a partir de la desregulación del Estado fordista-keynesiano y su puesta en valor de la escala local y barrial, y la administración municipal. En este contexto, el principal objetivo del estudio es identificar las ideas o fundamentos que guían al proyecto Superilla Barcelona, aun pendiente de ejecutarse, y valorar de manera reflexiva la idea de ciudad que vehiculan. La investigación se centra en la función residencial y comercial, con especial énfasis en el denominado como comercio de proximidad en un contexto de emergencia comercial global.
With the increasing demand for accommodation in countries with touristic potential, online reservation channels have started to be preferred more and more. The Airbnb system, which is the digital form of the home boarding system, is one of the alternative accommodation options preferred in recent years. Bringing a new understanding of the Airbnb system to the accommodation market may have positive results, as well as negative consequences due to legal loopholes and security problems. Globally developing standards and the pandemic process have changed consumer expectations. This situation has increased the competitive environment of all enterprises. In an intensely competitive environment, businesses need to think more strategically and make the necessary planning. In this context, SWOT analysis is a strategic method for businesses to achieve their future goals. Within the scope of the study, SWOT analysis of Airbnb business was made and it was aimed to contribute to the literature for different researches. As a result of the analysis, it was determined that the system brought a new dimension to the accommodation sector, but it had legal and security gaps. In addition, since the implemented online platform is a system that can be copied as well as creating potential for new business opportunities, the necessity of continuous updating has been revealed.
The Spanish real estate and its ‘sea and sun’ tourism model, were profoundly disrupted during the Great Recession of 2008–2014 As a result, hedge funds and their speculative operations have favoured an intense process of urban touristification in the largest Spanish cities, especially over the past ten years. The aim of this paper is to examine how the COVID-19 crisis has triggered shifts in the supply of short-term rentals and the type of demand of such rentals. By taking into account such changes, we will address the potential changes that the current pandemic scenario might bring between the ‘classical’ real estate market and short-term rentals in Spain.
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Airbnb and other short-term rental services are a topic of increasing interest and concern for urban researchers, policymakers and activists, because of the fear that short-term rentals are facilitating gentrification. This article presents a framework for analyzing the relationship between short-term rentals and gentrification, an exploratory case study of New York City, and an agenda for future research. We argue that Airbnb has introduced a new potential revenue flow into housing markets which is systematic but geographically uneven, creating a new form of rent gap in culturally desirable and internationally recognizable neighbourhoods. This rent gap can emerge quickly—in advance of any declining property income— and requires minimal new capital to be exploited by a range of different housing actors, from developers to landlords, tenants and homeowners. Performing spatial analysis on three years of Airbnb activity in New York City, we measure new capital flows into the short- term rental market, identify neighbourhoods whose housing markets have already been significantly impacted by short-term, identify neighbourhoods which are increasingly under threat of Airbnb-induced gentrification, and measure the amount of rental housing lost to Airbnb. Finally, we conclude by offering a research agenda on gentrification and the sharing economy.
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In this paper, I explore the impacts of holiday rentals in the historic centre of Barcelona. The intention is to contribute towards a conceptualisation of this unexplored phenomenon with the aim of better understanding why it represents the new gentrification battlefront in several tourist destinations. I suggest that the rhetoric of the sharing economy conceals the fact that holiday rentals are actually a new business opportunity for investors, tourist companies and individual landlords and, for this reason, long-term residents represent a barrier to capital accumulation. I show that there is an increasing conversion of housing into accommodation for visitors and that such conversion involves different forms of displacement. Importantly, when residents move out, the only buyers tend to be tourist investors. In such a context, I suggest that the growth of vacation flats produces conditions that solely enable the reproduction of further accommodation for visitors, rather than for long-term residential use. I call this process 'collective displacement', that is to say, a substitution of residential life by tourism. Ultimately, throughout this paper I suggest the importance of undertaking critical research relevant to those experiencing urban inequalities. Documenting and producing data about the way in which displacement takes place can be a crucial political tool for those who are fighting for staying put.
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This paper explores the meanings of the local expression fer barri (neighbourhood making) in a gentrifying area located in the Historic Centre of Ciutat de Mallorca (Spain). After closely examining the relation of fer barri with tourism in Mallorca, I analyse the tensions between the urban planning schemes unleashed by the public authorities upon this heritage-loaded territory and the practices of its inhabitants. I argue that the concept of neighbourhood scaling best accounts for the social relations that this sub-urban context embodies, given the hierarchy of forces impinging on it (urban, regional, national, global). Urban policy plans and organised residents scale the neighbourhood in conflictual terms. Some follow a tourism-dependent logic and try to promote the neighbourhood along the lines of heritage, its centrality or by setting up large events. In addition to State-led policies, tourism businesses and real estate enterprises, urban movements often depicted as oppositional groups have their own understanding of fer barri. This is an understanding of contradictory kind since in their attempts to contest capital accumulation by placing a value on the neighbourhood, urban movements can also unintentionally pave the way for both renewal and gentrification. A thorough analysis of the local term fer barri therefore reveals contrasting projects of neighbourhood scaling.
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Since the 1990s, the intensification of capital accumulation, especially in its financial dimension, has been one of the keystones for the triumph of neoliberalism. Spanish neoliberal policies have focused on the flexibilization of the real estate sector, leading to the specialization in the secondary circuit of accumulation. This has generated a third real estate boom which has been accompanied with an outstanding housing bubble. The Balearic Islands are a paradigmatic case within these logics, tourist specialization being the main trigger of the process. In Palma, the region's capital, neoliberal urban planning policies have been implemented in order to convert it into a “successful city” within the global urban network competition. These policies have led to Palma's uneven geographical development through processes like gentrification, as is the case of the Gerreria, a neighborhood of Palma's city center.
Rent gap theory has recently gained attention as an essential point of departure for explaining processes of gentrification and urban renewal. Though it has been theoretically refined and occasionally rejected in the growing literature on the subject, there have been no satisfactory attempts to empirically study the alleged rent gap phenomenon. This work first places the concept of rent gap in its historical theoretical context, juxtaposing formulations found in neo-classical and marxian literature, and then pursues a longitudinal study of rent gap development on six pieces of redeveloped land in Malmo. Rent gap theory is here for the first time put to an empirical test, the results of which are found to corroborate the view that the rent gap constitutes an important force in the transformation of the built environment. -Author
This study illustrates multifaceted urbanization patterns and processes in a coastal region of Catalonia (northeastern Spain) as a paradigmatic example of the socio-economic transformations typically observed in the northern Mediterranean basin since World War II. By focusing on the expanding tourism industry, second-home expansion, infrastructural development and sprawl around traditional rural centres, the paper assesses the effects of long-term economic, demographic, social and cultural transformations on rural landscapes in Alt Empordà, the so-called “Catalan Tuscany”. The stratification of distinct urbanization waves and the underlying socio-economic processes observed in Alt Empordà reflect population dynamics and settlement morphologies typical of rural districts moving rapidly towards a suburban spatial organization. Recent urban dynamics in Mediterranean rural systems deserve further investigation in order to shed light on latent suburbanization processes involving marginal European regions.
Recent research has suggested the need to approach the analysis of residential differentiation and change in relation to the structure and operation of the housing market. This paper adopts such an approach in order to analyse a recent and particularly marked form of housing market restructuring in central London, namely the sale of previously privately rented flats in purpose-built blocks to individual owner-occupiers. Evidence of the extent and importance of this process in the transformation of the central London housing market is assessed. An explanatory framework is advanced which places the flat break-up market in the context of the changing fiscal and financial bases of landlordism in general and the specific events which have structured the activity of corporate landlordism in the central London housing market in particular.
In his rent gap theory, Neil Smith argues that development is most likely to occur in areas where the capitalized land rents differ substantially from the potential ground rents that could be obtained if the land were converted to its highest and best use. At the metropolitan scale, the rent gap appears in the form of abberations vis-à-vis the monotonically decreasing rent gradients of the classic monocentric city. This study utilizes public use microdata sample (PUMS) data for 1990, 2000, and 2006 to test Smith's hypothesis that as capital flows into these land-value "valleys," the rent gradient shifts upward and outward, displacing the land-value valley farther from the CBD. It is concluded that from 1990 to 2006 there were two visible land-value valleys, and, consistent with Smith's hypothesis, as the first valley closed the second expanded.