Photo: Dimitry B./Flickr
Housing advocates and homeowners have debated how much of an effect popular short-term home rentals through services like Airbnb, have on local housing availability and affordability — especially in hot markets like New York City. But according to a new survey of economists and researchers conducted by the online search portal Zillow, most agreed that short-term rentals have little to no effect on housing.
The latest quarterly Zillow Home Price Expectations Survey asked 111 economists and researchers about the impact of short-term rentals on housing. About half of respondents believed the impact was “meaningful” but “small,” compared to about 40 percent that stated it was not at all “meaningful.” Meanwhile, only about 5 percent of respondents believed short-term rentals had a “large” impact on housing affordability and availability.
Many experts offered differing opinions as to their general thoughts on short-term rentals and housing. For example, one expert reported that they felt the overall housing market would be less impacted by short-term rentals than the hotel industry. Another commented that short-term and long-term rentals markets were not the same and “not effective substitutes.” Meanwhile, a third expert said the impact would be felt more “acutely in very tight markets like those in California” but that those effects were “not likely to spill over into the larger market.”
That same respondent also felt that the growth in the short-term rental market was likely cyclical, and closely tied to the discretionary income many Americans have available for travel.
The debate over short-term home rentals is a heated one. Housing advocates have argued that short-term rentals lessen the supply of long-term rental homes, resulting in higher rents as a result of tightening inventory. Proponents have countered that short-terms rentals provide often desperately needed extra income to homeowners, in some cases allowing them to afford their mortgage payments and remain in their homes.
Airbnb and New York City — the online marketplace’s largest market — faced off in court in October after Governor Cuomo signed a bill allowing fines of up to $7,500 for listings that violate the city’s short-term rental laws. Airbnb immediately sued New York State, but instead dropped the lawsuit after reaching an agreement with the city. Under the agreement, fines would be levied against individual hosts and not Airbnb itself. Additionally, the company agreed to assist in enforcing its “one host, one home” policy in New York, which limits host to only renting out one home.
“Cities across the country are grappling with housing affordability issues, especially in places with rapidly rising rents and home values,” said Zillow Chief Economist Dr. Svenja Gudell.
“In some hot West Coast markets, it’s not uncommon for renters to spend 40 percent or more of their income on a monthly rental payment, when historically that number was much lower,” Gudell added. “Inventory plays a large role in this affordability crisis; there simply aren’t enough rentals on the market to keep prices low.”
But, clearly experts aren’t convinced that short-term rentals are the cause of the problem, Gudell was quick to point out.
In August, the data analysis website FiveThirtyEight reached similar conclusions about the impact of short-term rentals on the housing market.
Click here to read the entire report.