Impact of Tourism on Local Residents: An Analysis of Paris, Milan, and Rome

Impact of Tourism on Local Residents: An Analysis of Paris, Milan, and Rome

In a recent study by the European Commission's Joint Research Centre (JRC), residents of touristic areas in Paris, Milan, and Rome have shown resilience to the growth in property prices and tourism services, despite concerns about the impact of short-term rentals (STRs) on housing affordability and urban liveability.

The survey, which involved around 200 residents in each city, revealed some intriguing findings about the STR market in these cities. In Milan and Rome, more than half of the respondents declared that their neighborhoods have become more tourist-oriented. This shift is reflected in the housing market, as the growth of STRs is associated with higher advertised selling and rental prices.

The situation in Paris is somewhat different. While tourist services have increased between 2018 and 2023, particularly in central areas where the majority of Airbnb accommodations are located, the presence of STRs does not seem to have a significant impact on house prices. However, there is a nuanced effect where Airbnb influences some market segments more than others, with mid-sized homes experiencing a notable increase in prices.

The study also examined the impact of STRs on liveability, revealing a shift towards tourist-oriented services and a decline in resident-oriented amenities, particularly in central areas where Airbnb listings are concentrated. This can reduce liveability for locals by diminishing access to everyday services and altering neighborhood character.

Despite these challenges, the overall sense of belonging and social cohesion does not seem to be affected by the perception of STRs. The European Commission has taken steps to address the issue, appointing a Commissioner for Energy and Housing who established a Commissioners' Project Group on Affordable Housing and a new Housing Task Force.

The report is an initial, exploratory analysis for a limited sample of EU cities, and part of a wider, ongoing research effort by the JRC to assess the socioeconomic impacts of tourism. Future research outputs will analyze the housing-tourism nexus in greater detail.

In conclusion, short-term rentals like Airbnb have contributed to rising housing costs and altering urban property markets, especially in Milan and parts of Rome, while their effect on Paris housing prices is more nuanced. They have also influenced urban liveability by shifting service offerings toward tourism, sometimes detracting from residents' quality of life. Nonetheless, short-term rentals play an important role in accommodating tourists during major events and supporting local economies, though this can come at the cost of housing affordability and neighborhood stability.

The European Parliament has recently adopted new rules for a responsible and transparent short-term rental sector, aiming to strike a balance between the benefits and challenges posed by STRs. As the research continues, it is hoped that a more comprehensive understanding of the STR market will emerge, informing policy decisions and ensuring a sustainable future for cities like Paris, Milan, and Rome.

[1] JRC (2023). Initial findings on the impact of short-term rentals in Paris, Milan, and Rome. Available at: https://ec.europa.eu/jrc/en/blog/initial-findings-impact-short-term-rentals-paris-milan-and-rome [2] Airbnb (2023). Airbnb's role in Paris during the 2024 Olympics. Available at: https://news.airbnb.com/airbnb-paris-2024-olympics/ [3] European Parliament (2023). New rules for a responsible and transparent short-term rental sector. Available at: https://www.europarl.europa.eu/news/en/press-room/20230215IPR87615/new-rules-for-a-responsible-and-transparent-short-term-rental-sector [4] Rome City Council (2023). The impact of the Jubilee year on short-term rentals in Rome. Available at: https://www.comune.roma.it/jubileo2025/it/media/documenti/2023/02/20/analisi-jubileo-2025-short-term-rentals.pdf

1. In the ongoing research conducted by the European Commission's Joint Research Centre (JRC), the impact of short-term rentals (STRs) on investment opportunities in real estate, particularly in touristic areas of Paris, Milan, and Rome, is being scrutinized.
2. The study reveals that the growth of STRs, such as Airbnb, has influences the lifestyle of residents in these cities, as the shift towards tourist-oriented services has resulted in increased selling and rental prices in the housing market, particularly noticeable in Milan and Rome.
3. The JRC's research also delves into the financial implications of STRs on the housing market, highlighting that while the presence of STRs in Paris does not seem to have a significant impact on house prices overall, there is a notable increase in prices for mid-sized homes in specific market segments. Furthermore, the European Parliament's new rules aim to foster a responsible and transparent STR sector, striking a balance between benefits and challenges in the finance and real estate sectors, and ensuring sustainable urban growth in cities like Paris, Milan, and Rome.

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