Platform-mediated short-term rentals and gentrification in Madrid

Abstract

Gentrification demands updated frameworks to assess the impact of some major global trends onthe local populations’ access to housing. Short-term accommodation using digital platforms inpreviously gentrified central urban areas is playing a significant role in outlining a new wave of‘transnational gentrification’ in a number of global cities. Having undergone classical patterns ofgentrification over the last two decades, the central district of Madrid and its surroundings areshowing patterns of a new wave of gentrification in a context of economic crisis, planetary rentgaps, increasing global tourism and an increase in rental prices in central areas that may be relatedto the emergence of short-term rentals – making Madrid a relevant case for depicting transna-tional gentrification in the Southern European capitals. Based on empirical data, this workexplores the holiday rental supply in Madrid over three years (2015–2018), verifying a strongassociation between the growth in tourist arrivals, the settlement of new residents from wealthyeconomic backgrounds and increasing rental prices. Since this process is accompanied by deregu-lation of local rental contracts and the growth of transnational Real Estate Investment Trusts(REITs), even in some of the most vulnerable areas located beyond the M-30 ring road, this waveof gentrification has the potential to produce displacement and substitution of residents.