Airbnb leads to median rent increase, promotes gentrification: study

A new report claims that Airbnb has restricted New York’s number of long-term rentals, lead to increased median rent throughout the city, and promoted gentrification.

The report, titled “The High Cost of Short-Term Rentals in New York City,” is authored by a research group from the McGill University School of Urban Planning but funded by the “politically influential” hotel workers union, according to Politico.

The report found that in the study period of September 2014 through August 2017 Airbnb has potentially removed between 7,000 and 13,500 units of housing from New York’s long-term rental market, putting extra pressure on a city already squeezed for housing.

Of those 13,500, the report found that 12,200 entire-house units (as opposed to, say, a room) were frequently rented in the last year of the study. In the study, “frequently rented” is defined as housing units available for 120 days and occupied for half of those days. That, researcher David Wachsmuth found, means the units “may also all have been removed from the long-term rental market; at minimum, they are at high risk of being removed” from the housing market.

Airbnb refutes this claim, stating that the study’s methodology is flawed because it relies on nights that a home is listed for rent, rather than nights it is actually rented. The study claims that the typical listing in New York is rented for just 47 nights, which is well below what Airbnb found to be the break-even point of 172 nights for it to make sense for an apartment to be taken off the long-term rental market.

The McGill University report also claims that by taking some housing offline and increasing demand for long-term rentals, Airbnb has directly lead to an increase in the city’s median rent. Researchers at McGill found that over the period of the study, the median rent has increased 1.4 percent owing to a diminished housing supply, bringing median rents up $380. In some Manhattan neighborhoods, the report says, that increase is as much as $700.

On the topic of gentrification, the study found that nearly 75 percent of the population in neighborhoods at the highest risk of “Airbnb-induced gentrification” across the city are predominantly non-white. The report goes on to say that white neighborhoods make systemically more money from Airbnb than non-white neighborhoods, and that traditionally non-white neighborhoods like Bed-Stuy and Harlem are the city’s fastest-growing neighborhoods for Airbnb.

That finding backs up the March 2017 report by Inside Airbnb, a watchdog of the short-term stay site, that claims white hosts in predominantly black neighborhoods earn significantly more than black hosts. Inside Airbnb’s study also found that the neighborhood with the biggest disparity between the percentage of white hosts in comparison to its white population is Stuyvesant Heights, where 74.9 percent of hosts are white but just 7.4 percent of neighborhood residents are white.

That March 2017 report has been rebutted by a professor at the Harvard Kennedy School, Airbnb points out.

Read the McGill University study in full here.

• Airbnb promotes income disparity, curbs rental market, union-backed study finds [Politico]
• All Airbnb coverage [Curbed]