Airbnb Is Good for Tourism. It May Be Bad for Renters.

Kingston, Jamaica — 6 January 2019

Short-term rental platforms have transformed the way property owners in Jamaica approach their assets, but the rapid growth of Airbnb and similar services is creating a side effect that is becoming increasingly difficult to ignore: a tightening of the long-term rental market that is squeezing young professionals, recent graduates, and lower-income households out of the options previously available to them. In 2017, Jamaica had around five thousand nine hundred active Airbnb listings, up from four thousand in 2016. Hosts in the Kingston and St Andrew corporate area alone earned two point four million US dollars in that year. What those numbers do not capture is the cost borne by tenants who can no longer find a one-bedroom apartment at a price they can afford to pay.

The Mathematics of Short-Term Rental

The economic logic driving property owners toward short-term letting is straightforward. A one-bedroom apartment that might command sixty thousand Jamaican dollars per month on the long-term rental market can generate sixty to seventy US dollars per night on Airbnb. At even modest occupancy rates, the monthly income from short-term rentals substantially exceeds what a conventional tenancy produces. For the property owner, the decision is rational. For the young professional seeking a place to live on a local salary, it removes an option from a market where affordable rental supply was already constrained.

The president of the Realtors Association of Jamaica has been direct on the point: young Jamaicans, those leaving university in their early twenties and young professionals starting careers, are having difficulty finding one-bedroom apartments to rent at accessible prices. The conversion of long-term rental stock to short-term tourism accommodation is not the only factor, but it is a visible and material one. Strata communities that once housed working tenants are now hosting visitors. Urban apartments that previously cycled through local renters are now advertised to tourists.

The Regulatory Gap

Jamaica does not yet have a dedicated national regulatory framework for short-term rentals. The Jamaica Tourist Board has signed a memorandum of understanding with Airbnb, signalling official recognition of the platform’s role in the tourism ecosystem. Some strata communities have by-laws restricting short-term lettings, and a 2017 court case affirmed the validity of such restrictions where they exist. But for the majority of properties outside strata schemes and tourist zones, the regulatory environment is light. The government has indicated it is considering a registration and licensing system, but details remain unresolved.

A Tension the Market Is Not Resolving Itself

The growth of short-term rentals in Jamaica is a genuine economic benefit at the aggregate level: more tourism revenue, more property income, more employment in hospitality services. At the household level for the young Jamaican looking for a place to live, it is a different story. Property markets that allocate an increasing share of their rental stock to visitors and reduce what is available to residents create affordability pressures that are slow to reverse and whose costs fall disproportionately on those at the bottom of the income distribution. Whether Jamaica develops the regulatory tools to manage that tension, or leaves it to the market, will shape the rental landscape of its cities through the years ahead.

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