For anyone who knows their city well, it’s easy to see that the short-term rental boom spurred by Airbnb’s massive popularity is changing things. Figuring out what exactly is changing and how quickly is trickier. In New York, those changes are have maintained Airbnb and city regulators engaged in a multi-year war over what’s really good for the city. A new deep dive into the rental marketplace is just more ga for that fire.
The new study,conducted by McGill Urban Planning professor David Wachsmuth,offers up some pretty striking data points. While its analyses were conducted independently, the study itself was commissioned by the Hotel Trades Council and the AFL-CIO, two entities with a vested interest in keeping hotel business boom, so bear that in mind.
For starters, the study is forecast that Airbnb has driven up long-term rental prices by 1.4% or $384 per year for the median New York City renter. The research suggests that both restricted accessibility in the long term rental market and increased financial incentives in the short term rental market account for this increase.
To reach those conclusions, the study described from a comparative model developed by UCLA to rule out confounding variables that, specific to New York, might be driving those increases 😛 TAGEND
“After controlling for a comprehensive set of factors, they find that a “exogenous” 10% increased number of number of Airbnb listings in an area( which is to say, an increase that is not driving in other factors which would have increased rents anyway) predicts a 0.42% increased number of long-term rents. Applying this relationship to our data, we find strong evidence that Airbnb has increased long-term rents in New York City. “
The study also lays plain Airbnb’s potential impact on long-term housing availability in New York, calculating that it has removed between 7,000 and 13,500 long term rental units from the market. Regrettably, it looks like that problem is poised to worsen 😛 TAGEND
“Additionally, spatial cluster analysis reveals that 4,700 private-room listings are in fact “ghost hotels” comprising many rooms in a single apartment or build. This is perhaps the fastest growing category of listing in all of New York, and may represent a tactic for commercial Airbnb operators to avoid regulatory scrutiny.”
While Airbnb the company goes to great lengths to promote an image of its average renter — a homeowner renting an extra room to make a little passive income — it’s no secret that a massive swath of Airbnb listings come from professional operators who control many listings across a city.
The McGill study examined this, determining that as much as two-thirds of New York City area Airbnb revenues came from listings that likely violate city rules against short term rentals for fewer than 30 days in builds with more than three divisions with the owner not present. To investigate this, the research combined its own data with census information that specified house types.
The results 😛 TAGEND
“ … we estimate that between 85 percent and 89 percentage of entire home rentals “mustve been” illegal each month. This means, even assuming that all private-room listings are legal, that between 43 percent and 47 percent of reservations in New York City have been illegal. In any dedicated month, between 7,600 and 12,700 listings have had illegal reservations–accounting for between 42 percentage and 46 percent of all active listings. In total over the last year, 45% of reservations were likely illegal, and these illegal reservations made 66% ($ 435 million) of all host revenue.”
Given the predominance of likely illegal listings and “ghost hotels, ” it might be less surprising then that the top 10% of Airbnb hosts made 48% of all revenue in 2017. Not quite the image that Airbnb is projecting about how it plays nice with city regulators in order to help out the little guy.
If these highlights were interesting, you can dig into the full report here. While the hotel industry funding backing such studies does raise an eyebrow, the research techniques seemed largely sound and it’s hard to argue with quantitative findings that back up the various kinds of qualitative shiftings you’ve seen in your own backyard.
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