You like Airbnb? Sure, sure, great. Would you like Airbnb as much if you knew that its mere existence was costing you, personally, an extra thousand bucks a year in rent?
In the past five years or so, since Airbnb achieved serious global popularity, there has been much “debate” over what effect it has on local housing markets. But there is not, in truth, that much “debate” over one basic principle: Apartments that are being rented on Airbnb are apartments that are not being rented to people who live in the city. Airbnb takes housing units out of regular circulation and turns them into temporary hotel rooms. It in effect reduces a city’s housing supply. And in cities that already face a housing shortage—cities like New York—Airbnb can exacerbate the severe lack of affordable housing.
A new report from the New York City Comptroller takes a stab at quantifying exactly what Airbnb is costing renters in NYC. It covers the years from 2009-2016, when Airbnb listings in the city multiplied from about 1,000 to about 40,000. Focusing on the eight neighborhoods with the most Airbnb listings—popular chunks of Manhattan and a few spots in Brooklyn—the comptroller found that:
- “For each one percent of all residential units in a neighborhood listed on AirBNB, rental rates in that neighborhood went up by 1.58 percent.”
- “Between 2009 and 2016, approximately 9.2 percent of the citywide increase in rental rates can be attributed to AirBNB”—and in the most popular neighborhoods, 20 percent of the rise in rents is attributable to Airbnb.
- “In aggregate, New York City renters had to pay an additional $616 million in 2016 due to price pressures created by AirBNB.”
According to the comptroller, nowhere in New York City is the effect of this stronger than in Greenpoint and Williamsburg, where “average [monthly] rents increased by $659 between 2009 and 2016, of which $123 can be attributed to AirBNB growth.” That means that the mere existence of Airbnb is costing the average renter in those neighborhoods almost an extra $1500 per year.
Airbnb itself objects to some of the methodology of the study, and in fairness to them, some Airbnb listings are likely genuine short term rentals by owners that do not remove a housing unit from circulation. It may be prudent to assume that the true financial impact is at least somewhat less than the report holds. Still, the broader point stands: Airbnb reduces the housing supply for actual residents of our housing-deprived city and significantly raises rents. A simple way to counteract this might be to tax Airbnb by the exact amount that it raises rents and then use this money to build more housing.
Alternately, kidnap the founders of Airbnb and appropriate their wealth and use that to build more housing, and also allow Williamsburg to be swept away in the next “super storm.” One less problem.