How Airbnb Is Driving Up Rents
Airbnb is possibly costing residents of New York City’s most popular neighborhoods a few hundred dollars each year in rent.
That’s on top of the thousands they already pay in one of the world’s most expensive places to live.
From hipster-heavy Williamsburg to buttoned-up Midtown Manhattan, residents are paying anywhere from $37 to $69 more each month thanks to the so-called “Airbnb effect,” according to the The Real Deal, a New York real estate news site.
This map from the Inside Airbnb database shows Airbnb rentals for most of Manhattan, left, as well as some of Queens, right, and Brooklyn, lower right. More than half of the dots are red, indicating entire homes/apartments for rent, and about 40 percent are green, meaning private rooms. The few shared rooms are indicated by the handful of blue dots. We filtered for rentals that are recent (reviewed in the last six months) and frequently booked (more than 60 days in a year).
The site’s contention, and that of some Airbnb critics, is that by removing units that would potentially be available for rent as homes, supply shrinks and the market adjusts accordingly: with higher prices.
The Real Deal calculated the Airbnb effect by scraping data from the Airbnb site and looking at bookings that the New York attorney general considers “commercial”: whole units or private rooms that were booked for at least half the days of the year.
Those listings numbered 2,400 to 4,600. When you remove that number of units from the rental housing stock, median rent rises between 1.2 and 2.3 percent, according to NYU research cited by The Real Deal.
But Airbnb disagreed with this method. Spokesperson Christopher Nulty told The Real Deal after the story was initially published that the report mixes apples and oranges.
“It wrongly assumes that renting out your spare bedroom when you’re in town and renting out an entire apartment are exactly the same thing,” he wrote. “The truth is that Airbnb allows thousands of New Yorkers to stay in their homes and to afford living in an increasingly expensive city, and 90 percent of NYC Airbnb hosts share the home in which they live.”
The service, which helps people rent out space in their homes for short stays, has been controversial in New York. It’s illegal there to rent out an apartment for less than 30 days unless the permanent resident is present. But, according to The Real Deal analysis, 60 percent of so-called commercial listings were for whole units, without the resident present.
Airbnb, which uses a different model to calculate its effect on the housing market, estimates its citywide impact on rent at just $6 per month.
The city has been cracking down on these listings over the past year, but has been struggling to contain the site’s explosive growth and understand its impact on residents.
After all, there’s definitely a difference between $6 and $60 a month in extra rent.
Here’s more for renters to mull over:
• Grim News, Renters: Brace for Market That’s Even Worse
• How to Get Rid of Your Roommate (Legally!)
• Childcare for 2 Is More Expensive Than Rent Now
