How Short-Term Lease Trends Affect the Availability of Quality Apartments for Rent in the City

This shift has major consequences for the availability—and affordability—of quality apartments in cities.

The Rise of Short-Term Leasing

The appeal of short-term leases is clear. For landlords, they offer flexibility and potentially higher returns. A property rented nightly or weekly can generate more income than a standard monthly lease—especially in popular areas with tourism or business travel. For tenants, short-term leases provide freedom: someone moving for a short-term job, undergoing a life transition, or exploring a new city may prefer not to commit to a long lease.

Technology has accelerated this trend. Platforms like Airbnb, Vrbo, and others make it easy for landlords to find a rotating stream of renters. This convenience has converted many traditional long-term rentals into short-term units, especially in cities with high visitor demand.

But this shift has deeper implications—especially when it comes to the availability and quality of apartments for long-term city residents.

Supply Compression for Long-Term Renters

One of the most direct effects of a rise in short-term leasing is a squeeze on supply. Every apartment turned into a short-term rental is one less unit available for long-term residents. In cities with already tight housing markets, this change puts additional pressure on renters looking for stable, quality housing.

This limited supply drives up competition and prices. Young professionals, families, and lower-income renters are particularly affected. They’re competing with not only each other but also with out-of-towners booking high-end rentals for a weekend getaway. As a result, some are priced out of central neighborhoods and forced into less desirable housing.

Shift in Investment Priorities

The growth of the short-term rental market has also influenced what types of units are developed and maintained. Investors now often design buildings specifically for short-term tenants: studio or one-bedroom units, furnished and optimized for high turnover, rather than family-sized apartments designed for years of occupancy.

This shift affects quality in two ways. First, there’s the physical quality of the units themselves. Landlords focused on short-term returns may prioritize aesthetics over durability. Stylish, Insta-worthy spaces that photograph well but aren't built to last become more common. Second, landlords may be less invested in long-term upkeep since short-term tenants are less likely to demand repairs or accountability.

Community Erosion and Tenant Instability

Short-term leases can also disrupt the social fabric of a city. In buildings dominated by short-term tenants, there's less opportunity for stable communities to form. Neighbors don’t get to know each other. There’s constant turnover. For permanent residents, this can be frustrating and isolating.

Moreover, it can change the character of entire neighborhoods. When multiple units in a building or block become short-term rentals, it creates a transient atmosphere. Businesses may shift to cater to tourists rather than residents, and neighborhoods can lose their identity. Long-term renters often look for communities with local services, schools, and infrastructure—not places that feel like hotel corridors.

Regulatory Challenges

Many cities have begun to push back against the negative effects of short-term leasing, enacting regulations to cap or restrict short-term rentals. These efforts vary widely—some cities require licenses, limit the number of days a property can be rented short-term, or even ban such rentals entirely in certain zones.

But enforcement is tough. Landlords often find workarounds, and platforms don’t always comply with reporting rules. Where regulations are weak or inconsistently enforced, the short-term rental market continues to grow unchecked.

Meanwhile, quality apartments that could serve stable renters remain locked up in the short-term economy.

A Widening Gap Between Renters

Another emerging consequence is a stratification of the rental market. High-quality apartments increasingly go to short-term guests or high-paying corporate renters. Long-term renters, especially those with tighter budgets, are left with older or poorly maintained units. This deepens inequality in housing access, creating a two-tier system: one for the transient and wealthy, and one for the permanent but underserved.

This isn't just a social issue—it’s an economic one. When workers can't find decent, affordable housing, it impacts labor markets, public services, and even the competitiveness of a city. Teachers, nurses, service workers—all critical to city life—struggle to live where they work.

Some Silver Linings and Emerging Models

It’s not all bad news. Some landlords have started offering flexible lease terms that blend the best of both worlds. For instance, mid-term leases (3 to 9 months) cater to traveling professionals and others who need more than a weekend but less than a year. These models can help fill the gap without entirely displacing long-term housing.

Co-living spaces have also emerged as a response. These often offer private rooms and shared amenities on flexible terms, marketed toward younger renters or digital nomads. While not a perfect substitute for traditional apartments, they represent an attempt to adapt to new rental behaviors.

Some cities are experimenting with incentives for landlords who keep units in the long-term market—such as tax breaks or zoning benefits. These efforts aim to balance flexibility with the need for stable housing.

What’s at Stake

Ultimately, the shift toward short-term leases is about more than just convenience or profit. It reshapes how people live in cities. It affects who gets to stay, what kind of housing is available, and what a neighborhood feels like.

If left unregulated, short-term lease trends could make cities more transient, less affordable, and more divided. But with smart policy and adaptive models, cities can strike a balance—allowing short-term rentals to coexist with the need for long-term, quality housing.

Conclusion

Short-term leasing isn’t going away. It’s a byproduct of a global, mobile economy and enabled by powerful tech platforms. But cities must take an active role in managing its impact. Ensuring the availability of quality apartments for long-term residents requires more than reacting to market shifts—it demands thoughtful planning, regulation, and a commitment to housing as a public good, not just a private commodity.