We know that the rise of informal vacation rentals in high-demand cities has an impact on housing supply, even if we cant quantify it perfectly yet. Those cities are experiencing surging competition for housing, and rising prices are only worsened by removing residential units from the market, added Sarah Watson, deputy director of New Yorks Citizens Housing and Planning Council, and author and manager of the Making Room initiative, which looks at new ways that cities can match their housing stock with the needs of their population. At the end of the day, the goal should be to make sure that residential units are not being taken off the market in areas where demand for housing is already outpacing supply. In those areas, extra housing space is more important for residents than for tourists.