Comptroller Reports on Airbnb’s Impact on Rents, Regulation Looms

New York City Comptroller Scott Stringer recently issued a report detailing Airbnb’s effect on housing affordability from 2009 to 2016. The report says that when people put up their apartments for short-term stays, they are basically removing them from the rental market, lowering the housing supply and increasing the price of units that are still available. Among the Comptroller’s findings:

• Airbnb listings were heavily concentrated in parts of Manhattan and Brooklyn and had a greater impact on these neighborhoods. Approximately 20 percent of the increase in rental rates was due to Airbnb listings in midtown and lower Manhattan, including neighborhoods such as Chelsea, Clinton, and Midtown Business District; Murray Hill, Gramercy, and Stuyvesant Town; Chinatown and Lower East Side; Battery Park City, Greenwich Village, and Soho.
• In aggregate, New York City renters had to pay an additional $616 million in 2016 due to price pressures created by Airbnb, with half of the increase concentrated in the neighborhoods highlighted above;
• For each 1 percent of all residential units in a neighborhood listed on Airbnb, rental rates in that neighborhood went up by 1.58 percent; and
• Between 2009 and 2016, approximately 9.2 percent of the citywide increase in rental rates can be attributed to Airbnb.

In response, Airbnb has launched an ad campaign attacking the report and accusing the comptroller of using home sharing as a scapegoat for New York City’s housing crisis. Airbnb has responded to the report by saying that most Airbnb hosts are not permanently taking their units off the market.

In addition, the third-party data firm, AirDNA, whose data was used as part of the comptroller’s research has pushed back on the conclusions made in the comptroller’s report. AirDNA has stated that the report’s methodology is flawed due to Stringer’s inclusion of every listing, active or not, in his calculations; his inclusion of all types of properties regardless of whether it’s a room or an entire apartment for rent; and not taking into account the length of time properties were rented for since some properties are routinely rented seasonally, while others are rented all year-round. If these factors were taken into account, AirDNA reports that half of New York City’s Airbnb listings are for private rooms and 65 percent of hosts manage only one listing. Under those conditions, AirDNA says it wouldn’t be possible for Airbnb to have a material impact on rental prices.

With the comptroller’s report in the background, the City Council is expected to introduce new legislation that would require hosts on short-term rental sites to provide the Mayor’s Office of Special Enforcement with addresses for their listings, as well as provide their full names and primary addresses, making it easier for the city to identify hosts that are operating illegal hotels instead of renting out their own homes. In addition to disclosing their full names and addresses, hosts could be required to disclose whether they are renting their entire home or just a room and reveal if the property is their primary residence. Penalties would be applied to listings that don’t comply with the reporting requirements, although lawyers for the City Council are still figuring out what these would be.