Arizona’s housing market has been a hot topic for years. Home prices have skyrocketed, rents have climbed, and many families feel priced out. But is the explosion of short-term rentals (STRs) like Airbnb the real culprit? A new report from the Common Sense Institute takes a close look and delivers some surprising answers.
Titled Home Prices, the Great Recession, and the Sharing Economy: Evidence from Arizona and Airbnb, the April 16, 2026 analysis uses hard data from Zillow, the Census Bureau, and Airbnb itself to separate fact from fiction. It concludes that while STRs can stir up local debates, they are not driving Arizona’s statewide affordability crisis.
The Long Shadow of the Great Recession
Arizona felt the 2008 crash harder than most states. Home prices plunged 46 percent peak-to-trough—more than double the national drop. Builders hit the brakes: only 211,000 housing units were permitted between 2010 and 2019, compared with 400,000 in the five years before the crash. Lending rules tightened, buyer confidence evaporated, and new construction lagged far behind demand.
By the time the pandemic hit, Arizona’s housing stock was already tight. The report shows this underbuilding created a fragile market. When low interest rates, remote work, and in-migration collided in 2020–2022, prices jumped 57 percent in just four years. The foundation for today’s crisis was laid long before the first Airbnb host flipped the key.
The Rise of Short-Term Rentals
Airbnb listings in Arizona grew from roughly 10,000–15,000 in 2010 to 57,000 by 2024. That sounds huge—until you remember Arizona has 3.3 million housing units and more than 200,000 seasonal or second homes. Frequent STRs (rented more than 90 days a year) number only about 15,000–20,000, or less than 1 percent of the total stock.
Interestingly, the growth of STRs coincided with a 30 percent drop in traditional second homes. The report argues that platforms like Airbnb didn’t remove long-term rentals from the market; they simply put idle vacation properties to better use. In many cases, they formalized what was already happening informally.
What the Numbers Actually Show
The Common-Sense Institute ran an econometric analysis covering 48,500 observations from 2015 to 2024. Their models tested whether higher STR density in a ZIP code led to faster home-price growth. The result? No stable, causal relationship.
- Pre-pandemic (2015–2019): Statewide prices rose 42 percent. Top STR ZIP codes rose just 37 percent.
- Pandemic surge (2019–2023): Both STR-heavy areas and low-STR areas saw similar jumps.
- High-STR neighborhoods were already the most expensive places before Airbnb existed.
In short, STRs cluster where tourists already want to go—Sedona, Paradise Valley, mountain towns—not in family neighborhoods driving the broader affordability crunch.
Local Disruptions Are Real—But Not the Main Story
The report doesn’t dismiss community concerns. In tourist hotspots, STRs can change the character of neighborhoods, raise local prices, and reduce long-term rental options. Cities like Sedona saw STR density hit 23–25 percent in some areas. Paradise Valley’s median home price climbed from $1.1–1.2 million in 2015 to $2–2.5 million by 2023.
Yet even here, price growth tracked or lagged the statewide average. The data suggests STRs amplify existing demand rather than create it. The real driver remains the chronic shortage of homes built after the Great Recession.
Time to Focus on Real Solutions
Arizona’s housing challenge is structural: too few homes for too many people. The report urges policymakers to prioritize zoning reform, faster permitting, and incentives for new construction instead of over-regulating STRs. Banning or heavily restricting short-term rentals might feel good locally, but it won’t fix the statewide supply gap.
The sharing economy isn’t the villain—it’s a symptom of a market that was already stretched thin. Smart policy will separate the two and keep Arizona growing.
Reference Common Sense Institute Arizona. (2026, April 16). Home Prices, the Great Recession, and the Sharing Economy: Evidence from Arizona and Airbnb. Read the full report: commonsenseinstituteus.org
What do you think? Are short-term rentals hurting your neighborhood, or is the bigger problem simply not enough houses being built? Drop your thoughts in the comments.
