What Airbnb Did To New York City (citylab.com)

An anonymous reader shares a report: There are two kinds of horror stories about Airbnb. When the home-sharing platform first appeared, the initial cautionary tales tended to emphasize extreme guest (and occasionally host) misbehavior. But as the now decade-old service matured and the number of rental properties proliferated dramatically, a second genre emerged, one that focused on what the service was doing to the larger community: Airbnb was raising rents and taking housing off the rental market. It was supercharging gentrification while discriminating against guests and hosts of color. And as commercial operators took over, it was transforming from a way to help homeowners occasionally rent out an extra room into a purveyor of creepy, makeshift hotels.

Several studies have looked into these claims; some focused on just one issue at a time, or measured Airbnb-linked trends across wide swaths of the country. But a recent report by David Wachsmuth, a professor of Urban Planning at McGill University, zeroes in on New York City in an effort to answer the question of exactly what home sharing is doing to the city. [...] Their conclusion: Most of those rumors are true. Wachsmuth found reason to believe that Airbnb has indeed raised rents, removed housing from the rental market, and fueled gentrification -- at least in New York City. "

Comments

Re:So we need different hotel regulation?

[Nidi62]

Let me see if I understand this:

ABnB works because ad-hoc rooms are cheaper than standard hotel rooms.

So people rush into the ABnB market, removing conventional apartments from the pool of long-term housing, driving up rents as the pool of apartments shrinks.

So if hotels are losing customers, why aren't they cutting hotel rates to be more competitive with ABnB? Hell, why aren't they slashing staff completely and converting some properties to ABnB only -- or becoming apartments?

Do we need to reduce regulation on hotels so they can better compete with ABnB?

Or is it some other thing, like hotels had successfully restricted competition and there was a practical shortage of hotels which drove prices too high?

It's the Uber model. Hotels have to live up to all sorts of codes (fire codes, health codes, building codes, etc) and are inspected regularly. Airbnb homes, as private dwellings, are held to less stringent standards. Besides the cost reduction from this, the private homes don't have to pay for housekeeping, maintenance, front desk, and other staff, further reducing their costs. Hotels also have to collect and pay taxes that private dwellings may or may not collect and pay (there may or may not be local laws stating that they have to collect taxes, and they may or may not adhere to those laws if they do exist).

That is not the main reason

[SuperKendall]

ABnB works because ad-hoc rooms are cheaper than standard hotel rooms.

The reason it works is for lots of reasons, that is the last of them. I have often paid more for an AirBnB unit than I would have for the nearest hotel.

Often you can find AirBnB units closer to where you want to be than most hotels, or in a more desirable location.

AirBNB units will generally have kitchens and washing machines, both of which may be very hard to find at any price just looking at hotels.

AirBNB units being housing, are often more secure than hotels and I don't have to worry about an entire staff with keycards being able to access my room, or being targeted by thieves because they know tourists stay at hotels.

Do we need to reduce regulation on hotels so they can better compete with ABnB?

That would help but I would still prefer an AirBnB unit if I could get one, over a hotel. Unfortunately because of restrictive regulation, most AirBnB units I've tried getting in large cities (mainly SF and NYC) have always been canceled so I can't take that risk anymore. In smaller markets they have been great though and really been much nicer than hotels.

and there was a practical shortage of hotels which drove prices too high?

One last note on this, it does not have to be a shortage of rooms or hotels - the last year or two the Apple Developer conference (WWDC) was in San Fransisco, the hotels decided to collude on higher prices - by that I mean 2-4x above normal rates for that time of year, because they knew they had a captive market for people who wanted to be around Moscone. I'm not 100% sure but it could be a reason Apple finally moved the conference to San Jose.

Re:Fix it with some careful regulation

[alvinrod]

Rent control doesn't solve the problem because it actively discourages new development, which when you have a growing population leads to housing shortages. Legislating something doesn't alter reality or prohibition would have worked, there would be no litter in parks, and Wall Street would never do anything someone finds unscrupulous.

You also get plenty of cases where people who don't need rent control housing occupy it (and hold on to it) because it's cheaper. You also see even worse examples like the Congressman who was renting four separate rent-controlled apartments at the same time.

There are various schools of economics and they often squabble over policies and correct courses of action for many things, but rent control is not one of them.