What Airbnb Did to New York City

["Dave Farber" <farber () gmail com>]

Begin forwarded message:

> From: Dewayne Hendricks <dewayne () warpspeed com>
> Date: March 10, 2018 at 8:32:40 AM EST
> To: Multiple recipients of Dewayne-Net <dewayne-net () warpspeed com>
> Subject: [Dewayne-Net] What Airbnb Did to New York City
> Reply-To: dewayne-net () warpspeed com
>
> [Note:  This item comes from friend Judi Clark.  DLH]
>
> What Airbnb Did to New York City
> Airbnb’s effects on the city’s housing market have been dramatic, a report suggests. And other cities could soon see 
> the same pattern.
> By ALASTAIR BOONE
> Mar 5 2018
> <https://www.citylab.com/equity/2018/03/what-airbnb-did-to-new-york-city/552749/>
>
> There are two kinds of horror stories about Airbnb. When the home-sharing platform first appeared, the initial 
> cautionary tales tended to emphasize extreme guest (and occasionally host) misbehavior. But as the now decade-old 
> service matured and the number of rental properties proliferated dramatically, a second genre emerged, one that 
> focused on what the service was doing to the larger community: Airbnb was raising rents and taking housing off the 
> rental market. It was supercharging gentrification while discriminating against guests and hosts of color. And as 
> commercial operators took over, it was transforming from a way to help homeowners occasionally rent out an extra room 
> into a purveyor of creepy, makeshift hotels.
>
> Several studies have looked into these claims; some focused on just one issue at a time, or measured Airbnb-linked 
> trends across wide swaths of the country. But a recent report by David Wachsmuth, a professor of Urban Planning at 
> McGill University, zeroes in on New York City in an effort to answer the question of exactly what home sharing is 
> doing to the city.
>
> “There’s been a kind of increasing outcry from communities, from housing organizations, from activists, and from 
> elected officials that short-term rentals are having a negative impact on housing,” Wachsmuth said. New York City is 
> the third-largest Airbnb market in the world, and it’s also one of the oldest, so it could serve as a useful model 
> for what smaller, newer markets might expect to see when home sharing takes off. “[New York] has been a big center of 
> activity for a long time. When we look at cities that have much smaller markets, we’re seeing them grow in a way that 
> already happened in New York before we started gaining the data. And we’re seeing the exact same process repeat, kind 
> of in real time.”
>
> To map this process, Wachsmuth and his team used estimates of Airbnb activity from AirDNA, a California-based firm 
> that scrapes and analyzes Airbnb data. They studied Airbnb activity from September 2014 to August 2017, including 
> more than 80 million data points, for the whole 20 million population of the New York City metro region. They also 
> used a number of new spatial big-data methodologies developed specifically to analyze short-term rentals.
>
> Their conclusion: Most of those rumors are true. Wachsmuth found reason to believe that Airbnb has indeed raised 
> rents, removed housing from the rental market, and fueled gentrification—at least in New York City. To figure out 
> how, the researchers mapped out four key categories of Airbnb’s impact in New York: where Airbnb is concentrated and 
> how that’s changing; which hosts make the most money; whether it’s driving gentrification in the city; and how much 
> housing it has removed from the rental market.
>
> Is it really still “home sharing”?
>
> The phrase “home sharing” evokes an image of an individual who opens their home and rents out their extra space to 
> wanderlust-y strangers. This is, after all, how Airbnb got its start: Struggling to make rent in San Francisco, 
> founders Joe Gebbia and Brian Chesky started renting out floorspace in their living room and cooking breakfast for 
> their guests in 2007. Today, it is worth some $30 billion.
>
> While many people still use the platform this way, Wachsmuth found that 12 percent of Airbnb hosts in New York City, 
> or 6,200 of the city’s 50,500 total hosts, are commercial operators—that is, they have multiple entire-home listings, 
> or control many private rooms. And these commercial operators earned 28 percent of New York’s Airbnb revenue (that’s 
> $184 million out of $657 million).
>
> Like hotel managers, these hosts tend to be market-savvy: They often charge less per night than other hosts do and 
> adjust their rates to attract a high number of rentals overall. Unlike hotels, they don’t pay commercial property 
> taxes or hotel taxes. And that’s a problem, both for the city itself and for other hosts.
>
> “If we didn’t have this dominance of commercial operators, the home sharers would do better,” Wachsmuth said. 
> “Currently what’s happening is that the price the actual part-time home sharers need to charge in order to get a 
> booking is getting pushed way down.”
>
> [snip]
>
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