<p>The rise of short-term rental (STR) platforms such as Airbnb and Booking has accelerated the transformation of housing from a place of residence into a financial asset. While the impact of STR platforms on housing markets has been extensively studied in cities such as London, Lisbon, Barcelona, and New York, there is limited information on how these effects manifest in large, tourism-oriented housing markets where rental pressure coincides with a newly implemented STR licensing regime. This study uses 2024 data and a two-stage least squares (2SLS) regression model to examine the impact of STR platforms on average rental prices across 789 neighborhoods in Istanbul, Turkey. This study develops an interaction-based instrumental variable design that combines pre-existing tourism infrastructure, measured by hotel occupancy permits, with the approval rate for STR permits under Law No. 7464, which came into effect in 2024. The results indicate that interpreting the estimated effect as a local average treatment effect (LATE) rather than an average treatment effect (ATE) is more appropriate. In neighborhoods with high tourism potential and greater capacity to adapt to the new STR licensing regime, a 0.01-unit increase in STR density, corresponding to a one-percentage-point increase in the listing to housing ratio, is associated with a 5.3% increase in average rents. The findings indicate that the rental pressure created by STR in Istanbul is not evenly distributed across the city. Rather, it is spatially selective and shaped by differences in neighborhood level tourism potential and regulatory compliance capacity.</p>