Airbnb Drives Up Rent Costs In Manhattan and Brooklyn, Report Says (cnet.com)

According to a report from New York City's comptroller, Scott Stringer, Airbnb is causing rent prices to increase significantly in Manhattan and Brooklyn (Warning: source may be paywalled: alternative source), where the majority of the company's rentals are concentrated. The New York Times reports: In Manhattan's Hell's Kitchen and Chelsea neighborhoods and the Midtown Business District, which accounted for about 11 percent of all Airbnb listings in New York City in 2016, average monthly rents increased by $398 between 2009 and 2016, of which $86, or 21.6 percent, was a result of Airbnb's presence, the report said. In Greenpoint and Williamsburg in Brooklyn, the study said, rents went up 18.6 percent in those years because of Airbnb listings. Airbnb makes it easy to rent apartments to tourists, taking units off the market for full-time residents, the report said. The report said that Airbnb's influence cost New Yorkers $616 million in additional rent in 2016 as a result of price pressures.

Comments

...and?

[MightyYar]

Every type of economic activity increases rents... like, all of them. New restaurants - increase rents. Jobs increase rents. So you flood an area with tourists and the rents go up? OK, in isolation that sounds bad - but what did all of that tourism money do to the local economy? If rents go up, doesn't that also encourage investment in the neighborhood? How can you just look at this one statistic in isolation? Cities were murdering each other to get the new Amazon headquarters... what would that do to rents?

Re:...and?

[Actually, I do RTFA]

. So you flood an area with tourists and the rents go up?

There's no reason to think there are more tourists visiting NYC. Occupancy rates in hotels are down, year-over-year.

You are right that you have to look at mutliple factors, but you probably would want to compare rents, inflation and wages. After all, the important thing to the average renter is what percent of their money goes to rent.

Re:...and?

[ShanghaiBill]

NYC restricts the supply of housing by refusing to issue building permits, so prices are going up. The only solutions are rent control or usage restrictions.

Removing the restrictions on building, and allowing the supply to rise to meet demand is NOT a solution, because the NIMBY voters of NYC would never accept it. They don't want NYC to lose its "small town" neighborhood feeling - and, no, this is not a joke.

Re:...and?

[Anonymous Coward]

Occupancy rates in hotels are down, year-over-year.

I wonder if some kind of an alternative to a hotel became available in recent years. Like some kind of service that allows you to rent from a common homeowner.

Re:...and?

[Dutchmaan]

Cities were murdering each other to get the new Amazon headquarters... what would that do to rents?

Increases rent faster than wages resulting in an increased homeless population. Also Amazon is buying up the residential so they can bring people in and set them up with homes right away...

In short, Amazon is great for a city's economy, but it's awful for the people who are already living there.

Re:...and?

[ShanghaiBill]

"solutions" to what? rent going up? why is that a problem?

Because landlords are evil, and tenants are virtuous victims. Furthermore, victimhood is only available to current residents, not to people that want to live in NYC but can't because affordable housing is not available.

Stop rent control. Stop subsidizing rent. force the system to balance itself, instead.

Try running for NYC public office while saying that. Good luck.

Re:...and?

[postbigbang]

There's another way to look at this.

The hotel prices in Manhattan, just like the Bay Area, Seattle, downtown Chicago are berserk. AirBnB presence means I can spend about 1/3rd the amount of a hotel room, and spend the rest on needed things like food, transportation (expensive in all of these areas) and maybe have something leftover for a beer. Maybe.

Does that mean a NYer, San Franciscan, etc. has to pay more dough for their abode? I don't have to live there, thank heavens. This is not my problem. My problem is taking short trips to expensive cities. I'll cut my costs to suit my meager budget.

Do I empathize? No. You want avocado toast? Fine. Bagels and lox? Fine. For those that live in flyover country, you folks are insane.

That areas can't get building permits is completely understandable. The infrastructure costs are high, and politicians have cut budgets to the bone and worse. Capital investments are impossible. No one wants to shell out the money needed for upkeep and maintenance, let alone visionary spending. Everyone's in it for the moment, grab the dough and run, and the future is not our responsibility is the hue and cry of most every political hack. They never heard of sustainability and mutual responsibility. And so head to the big cities and get out as fast as we can. AirBnB is a hero to me. They help me fight the greed of the hoteliers and their insane price differentials. What differentials? That's a different story for a different thread.

Re:...and?

[BlueStrat]

Yes. Hotels have daily housekeeping. No Airbnb place I have stayed at does. The market has spoken: Many people don't want to pay for that.

However, if Airbnb is popular because they don't pay a hotel tax, for example, then that is tax evasion, not free-market competition.

Why can't there be a middle-ground?

It's rather silly to expect homeowners to pay the tax rates of a multinational hotel chain to rent out their home or apartment for a couple of months while they go on a cruise or something, but there are legitimate concerns and problems that do in fact need to be addressed.

How about creating regulations such that in areas that have a population density higher than a set amount, property owners who wish to participate in AirBnB-style activities must be licensed. Make it cheap, like $25 or less for a year so that people will comply. Place restrictions on how many weeks/months out of a year the property may be rented out. If your property is not in a high population density area, then no restrictions or license necessary.

Strat

Re:...and?

[thegarbz]

The entire thing becomes a self regulating loop.

A very poorly tuned loop which is why you see big discrepancies between cost of living and average income across all industries between different cities. In a really big macro scale you are right of course, but the reality is that people will experience significant stress long before the balancing acts set in which has a very big impact on society.

I got mine

[fluffernutter]

It shouldn't be called the gig economy, it should be called the "I got mine" economy. I'm also partial to the "screw you" economy.

Short term rental should have restrictions

[mark-t]

Rental periods of less than a single calendar month in length should force the entire building to be qualified as a hotel, and require that there be no long term rental or ownership of any units anywhere within the entire building, beyond at most what is necessary for any dedicated management and/or maintenance staff.

Just IMNSHO....

Rent drives up housing

[Pfhorrest]

Just like AirBnB drives up the cost of longer-term rentals, the existence of rent in the first place drives up the cost of homeownership.

Rent (including interest, which is just rent on money) is the core mechanism that perpetuates and amplifies the divide between rich and poor, turning what would otherwise be a truly free market into exploitative capitalism.

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And this is why we regulate hotels

[rsilvergun]

and subletting. Because the rich people living in New York still want services from Working Class people who shouldn't have to live 4 hours from where they provide those services.

And yes, this means we sometimes tell businesses to take a flying leap when their business is not conducive to the overall health and wellbeing of society. It's like the Olympics. No city in it's right mind would host it. Not all economic activity is 'good'.

Here's a scary thought

[rsilvergun]

AirBnB turns your tourists into part of your Urban Sprawl problem. The Hotels are usually in a district (especially nice ones) near the city's major amenities. AirBnB breaks that. If folks are staying where ever and driving a few hours in a rental (fine since they're on vacation) expect to see traffic shoot up.

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