635. The impact of tourism rental on residencial rental: opening (and closing) rent gap in Pama Old Quarter

Abstract

Taking Palma Old Quarter as a case study, this article shows that residential rental prices have increased due to a decrease in the number of homes available for rent to residents. This scarcity of residential rentals has been rooted in a massive switch of dwellings from a residential to a touristic use. Such a shift has been produced because in principle, the rents extracted from a dwelling can be increased if the dwelling is reconverted from a residential to a touristic use. Anyway, due to the oversupply in tourism rentals, this rent gap is progressively closing. The blossoming of tourism rentals poses two theoretical implications. On the one hand, the role of tourism rentals’ revenues as potential ground rent, and on the other hand, the creation of rent gaps not so much because of alterations in the dynamics of disinvestment and investment in housing, but because of the alteration of the owner-tenant social relations due to tourism.