Airbnb Causes Price Hike in NYC Res­i­den­tial Rental Mar­ket

The Jewish Voice - - BUSINESS NEWS - By: Ilana Siyance

Airbnb, the home shar­ing plat­form, has changed much more than just how to book a room for a va­ca­tion. The now decade-old ser­vice, which is worth close to $30 bil­lion, has made last­ing im­prints on the real es­tate mar­ket, tak­ing hous­ing out of the rental mar­ket and creat­ing makeshift ho­tels. New York City, be­ing the third-largest Airbnb mar­ket in the world and one of the old­est, has been al­tered the most. As such it can also serve as a model for newer or smaller mar­kets and how Airbnb will af­fect them as it ex­pands in their ar­eas. A re­cent re­port by David Wachsmuth, a McGill Univer­sity pro­fes­sor of Ur­ban Plan­ning, looks into what the ser­vice has done to New York City and its com­mu­ni­ties.

“There's been a kind of in­creas­ing out­cry from com­mu­ni­ties, from hous­ing or­ga­ni­za­tions, from ac­tivists, and from elected of­fi­cials that short-term rentals are hav­ing a neg­a­tive im­pact on hous­ing,” Wachsmuth said. As per a re­cent ar­ti­cle in City­lab, in Wachsmuth's study, he sought to an­swer ques­tions like: how much hous­ing has Airbnb re­moved from the rental mar­ket; where is it con­cen­trated; which hosts make the most money; and is it driv­ing gen­tri­fi­ca­tion in the city. In essence, he was try­ing to prove the ru­mors right or squash them all to­gether.

For his re­search, Wachsmuth uti­lized es­ti­mates of Airbnb ac­tiv­ity from AirDNA, a Santa Mon­ica-based firm that an­a­lyzes Airbnb data, from Septem­ber 2014 to Au­gust 2017. The re­search found that 12 per­cent of Airbnb hosts in NYC, or 6,200 of the NYC's 50,500 to­tal hosts, are com­mer­cial op­er­a­tors. That means that un­like the type­cast of a per­son rent­ing out his own rooms to earn an ex­tra buck, th­ese users have mul­ti­ple en­tire-home list­ings. Also, th­ese com­mer­cial op­er­a­tors earned 28

per­cent of all the NY rev­enue on Airbnb, which amounted to $184 mil­lion out of the $657 mil­lion to­tal NY rev­enue. Th­ese hosts are still not re­quired to pay com­mer­cial prop­erty taxes or ho­tel taxes, which gives them an un­fair ad­van­tage. The study fur­ther con­cluded that Airbnb has ac­tu­ally raised rents, re­moved hous­ing from the rental mar­ket, and fu­eled gen­tri­fi­ca­tion in New York City. The only ques­tion that re­mains now is how we can rem­edy the situation, and keep other city's from ex­pe­ri­enc­ing the same af­fects.

The now decade-old ser­vice, which is worth close to $30 bil­lion, has made last­ing im­prints on the real es­tate mar­ket, tak­ing hous­ing out of the rental mar­ket and creat­ing makeshift ho­tels

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