There is another factor - many people don't want to live in a neighborhood with a highly transient population. I posted a link to a nytimes article about this above... I think a lot of this comes down to whether you feel that changing the nature of a neighborhood (fewer long term residents) is a legitimate reason for a neighborhood to regulate short term rentals.
As you can probably tell from my phrasing, I do think it is. I wish I had a cite, but I do remember reading an article about the actual, monetary value of good long term relations with neighbors... there is an argument to be made that short term rentals are selling not just the unit but the neighborhood itself, and doing some harm to the neighborhood in the process. If that is the case, this is an externality that could be legitimately regulated.
As you can probably tell from my phrasing, I do think it is. I wish I had a cite, but I do remember reading an article about the actual, monetary value of good long term relations with neighbors... there is an argument to be made that short term rentals are selling not just the unit but the neighborhood itself, and doing some harm to the neighborhood in the process. If that is the case, this is an externality that could be legitimately regulated.