After Airbnb hosts converted New York's available housing stock to unlicensed hotel rooms, rents soared


#1

Originally published at: https://boingboing.net/2018/03/08/red-queens-race-2.html


#2

“the system is dominated by professional landlords who have illegally converted huge swathes of the city’s available housing stock into unlicensed, highly profitable hotel rooms”

And my holiday has never been as fun!

Oh shit, wait…


#3

Yeah! Also, the reduction in the number of pirates has directly contributed to global warming!

Correlation does not equal causation.


#4

Ummm, except that here there’s a clear mechanism for the independent variable to affect the dependent variable, an established fundamental rule of supply and demand, and a wealth of data. Could there be intervening variables? sure. Could the percentages be off? sure. You can be clever with Logical Fallacies all day, but there’s a lot less reasonable doubt here than a lot of other correlations…


#5

Correlation does not implies causation, but it doesn’t rule it out either, sometime common sense helps too.

Keep an eye on what is going to happen to Berlin real estate market in the next years.


#6

" Using Zillow’s Rent Index, Wachsmuth and his team estimate that over the last three years, Airbnb has increased long-term rents in the city by 1.4 percent. "

They say 1.4% is something like $384+ over 3 years, which is roughly a $128 increase/year on a 27K/year rental property ($10-11/month). Seems likely that it might be true, but I’d hardly call that soaring.

I think there is a reverse narrative here that is also compelling. In big cities, rentals and hotels are often owned by the people with capital–they are the only ones who can afford the millions required to buy the building or land and erect high-rises. Maybe a lot of brownstones with 5-10 apartments are owned by the middle-class, but they are probably closer to the 1% than their renters are. Not discounting the corporate AirBNB slumlords, AirBNB is also providing a way for the renter-class to extract value from their rental contracts. This is also probably directly driving hotel prices down, making visiting NYC easier for less-affluent, and distributing the benefit of tourism more broadly across the economy.


#7

This is why it’s so important to get the regulations right, and honestly, for Airbnb - if they want to be forward-thinking, as opposed to pump-and-IPO/pump-and-sell, to support smart regulation. There is real benefit. My sister-in-law, a dancer and choreographer who travels for work a lot and lives on a shoestring, can only afford to have her home base in NYC because of Airbnb, and my dad can only afford to visit us in Brooklyn without crashing on the couch of our 1 bedroom (already containing a family of 4) because of Airbnb. But that affordability margin gets eaten alive if housing stock gets completely squeezed out by unregulated profiteering. Without a balanced set of regulations, it becomes all-or-nothing. Airbnb is either flourishing, to the detriment of the middle and lower classes, or it gets burned with pitchforks by selfsame and ceases to be.


#8

From what I’ve observed, municipal regulation is the key to dealing with the corporate (as opposed to individual homeowner) Airbnb operators. An absence of regulation results in a lot of sleaze on the part of these property managers that ultimately damages the Airbnb brand, while solid regs result in corporate operators who understand that they’re running distributed hotels.

Edinburgh is one city that gets it right. They needed Airbnb to create more room stock during Festival season, corporate operators saw an opportunity, and the city essentially partnered with Airbnb to make sure that they behaved properly.


#9

Something similar is happening in Toronto. The city just put in restrictions to curtail AirBNB, but that isn’t working out so well.


#10

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