Photo: La Citta Vita/Flickr
The effect that Airbnb, the popular short-term rental platform, is having on the rental market in New York City has been the source of much debate since its inception and the controversy has shown no signs of dying down as the platform continues to grow in popularity.
Housing advocates have voiced their concerns that landlords would choose to rent out vacant units on Airbnb instead of offering them to locals, exacerbating existing housing shortages and further driving up rental prices in New York City, the platform’s biggest market according to FiveThirtyEight.
New York City Council and the state’s Attorney General began looking into potential issues with Airbnb listings back in 2014, when they questioned the legality of listings in New York City where it’s currently illegal to rent out apartments in buildings with three or more units for under 30 days.
Meanwhile Airbnb countered the accusations claiming that most spaces offered on its platform would otherwise be vacant, but released extremely limited reservation data for scrutiny.
FiveThirtyEight, a data analysis website, combed over data on Airbnb bookings provided by consulting firm Airdna to give the most in depth look to date at the possible impact Airbnb is having nationwide.
The results of the analysis, published yesterday, show Airbnb’s impact is still relatively small in most cities. However, a disproportionately large share of the company’s revenue comes from the very listings that have caused its critics to raise an eyebrow — homes that are rented out for a large portion of the year, or what are referred to as “commercial” listings.
To be considered “commercial” in the FiveThirtyEight analysis, a listing had to be an entire home or apartment — not just a room within a larger unit — booked for 180 days or more between June 2015 and May 2016.
Across all markets, there were over 91,000 active listings, but only about 9,000 of those listings were commercial — a little under 10 percent total, according to FiveThirtyEight’s analysis.
However, those commercial listings make up about a third of host revenue in the markets studied.
In New York City, there were nearly 31,000 active listings, and only about 8 percent were commercial, or roughly 2,500 listings. That figure represents a sliver of New York City’s estimated 2.2 million unit inventory of rental apartments.
The fact that so much revenue is driven by these listings could give Airbnb an incentive to focus on increasing such listings as it continues to grow, something some experts believe may already be happening, says FiveThirtyEight.
The revenue numbers alone don’t necessarily mean Airbnb is having much of an effect on rents because the raw number of commercial units in most cities remains low, under 1,000 in all but the biggest cities and less than 1 percent of all active listings.
“It’s a very valid concern,” Stockton Williams, executive director of the Terwilliger Center for Housing at the Urban Land Institute said. “But I’m not sure there is evidence that Airbnb has had a significant effect on either price or supply.”
Airbnb released a statement claiming the FiveThirtyEight study wasn’t accurate, but provided no back up data.
“This analysis doesn’t provide a complete and accurate picture of our community,” Airbnb spokesman Christopher Nulty said in the statement.
Nulty added that some of the units FiveThirtyEight identified as “commercial” might instead be boutique hotels or guest houses.
The FiveThirtyEight analysis found the vast majority of New York listings on Airbnb reflect what the site claims is its primary mission — allowing owners and tenants to rent out underused rooms, couches or entire apartments to supplement their incomes.
However, people renting out their units full time like a hotel, which is already illegal, does account for about a third of Airbnb revenue generated in New York.
The analysis suggests that nationally, the effect on rent is small but that it is more significant in very tight housing markets such as New York.
New York Governor Andrew Cuomo has yet to sign a proposed bill that would cut into Airbnb in New York City by banning multiple listings that were short-term, 30 days or less.