Tourism-Led Gentrification in Barcelona and San Francisco

Keywords: residential instability, short-term rentals, housing, fixed-effect regressions
Abstract Type: Paper Abstract

Abstract

Based on fixed-effect regressions, we looked at the effects of the spread of tourism on the residential instability in Barcelona and San Francisco. Our dependent variable refers to the rate per 1,000 residents of the total residential movements (in, out and within a census tract) in the four years preceding the outbreak of the Covid-19 pandemic (2016-2019). The hypothesis was made that the residential turnover in these two cities would correlate with a measure of tourism-led gentrification, as a composite index of short-term rentals pervasiveness (rate per 1,000 residential units) and raising rent gap (difference between Airbnb hosts’ revenues and rental fees in the long-term market). We controlled our results for the effort rate (% of income devoted to pay a rent), the net income, the Gini index, the ratio of salaries to non-work earning, and the socio-demographic features of the census tract. It was found that the relationship between tourism-led gentrification and the dependent variable is statistically significant both in Barcelona and San Francisco. However, patterns of residential instability differ in the two cities as they point to the displacement of low-income and most vulnerable residents in the Catalan capital, while connected to the erosion of the middle-class in San Francisco. In either case, our results reveal a gradual process of social disinvestment in tourist destinations and show that tourism is a disruptive force that is altering the demographic and socio-economic structure of urban areas, along with other processes linked, for example, to traditional gentrification or population decline.