Major Goals and Objectives

The primary objective of this study is to investigate how the home sharing economy (HSE), led by the rapid growth of short-term rental (STR) platforms such as Airbnb, influences housing market dynamics in the Lake Michigan region. While STRs have contributed to local economic growth through increased tourism and income opportunities, they have also raised concerns about housing affordability and community sustainability, particularly in urban and coastal areas where STR activity is concentrated. This research seeks to empirically examine the extent to which STR supply affects key housing market outcomes—specifically, home values, rental prices, and transaction volumes—using a panel dataset organized at the zip-code-by-month level. Recognizing the regional specificity of STR impacts, the study aims to identify not only whether STR activity influences housing markets, but also under what neighborhood-level conditions these effects are more pronounced. By exploring heterogeneity in STR effects across different community types (e.g., high-tourism vs. residential, renter-dominated vs. owner-dominated), the study generates a nuanced understanding of STR-driven housing dynamics. Furthermore, the study conducts counterfactual simulations to estimate how hypothetical supply-side regulations (such as annual STR caps) could alter housing market outcomes in different neighborhoods. These insights will be particularly relevant for local governments in the Lake Michigan area, where STR regulation remains limited or absent. Ultimately, this research contributes to evidence-based policymaking by offering targeted, data-driven recommendations for balancing the economic benefits of STRs with the long-term housing needs and social sustainability of local communities.