New York City’s fast rising rents can be blamed on the rise of Airbnb home-sharing service, according to a new study conducted by McGill University that was commissioned by the Hotel Trades Council and co-sponsored by local neighborhood organizations.
The report analyzed Airbnb activity from September 2014 to August 2017, finding that the service removed between 7,000 and 13,500 units of housing stock from the city’s long-term rental market during that period.
By reducing the city’s supply of long-term rentals, Airbnb indirectly increased the median long-term rent by 1.4 percent over the three year period. That resulted in a “$380 rent increase for the median New York tenant looking for an apartment this year,” the authors of the study said.
That increase rises to more than $700 when looking at long-term rentals in Manhattan alone.
The study is somewhat controversial though, as Airbnb itself questioned the methodology behind it. It notes that the report uses “available for rent” rather than actual booked nights to determine listings that were removed from the long-term market. Airbnb also argues that many of its landlords don’t update listing availability as frequently as it would like.
New York State’s Multiple Dwelling Law proscribes that short-term rentals of 30 days or less are illegal in buildings with three or more units, unless the owner is also present. Private room rentals are also unlawful in the same situation.
Given those laws, the report says that as much as two thirds of Airbnb’s revenue in New York City comes via illegal listings.
Responding to that accusation, Airbnb’s head of northeast policy Josh Meltzer told CNBC that the company supports a change in the law. “Although inconvenient for this author's anti-home sharing bias, Airbnb supports legislation that would restrict home sharing to one single home," he said.
“This would finally allow enforcement to focus on illegal hotel operators while protecting regular New Yorkers who are trying to make some extra money to live in a city that gets more expensive by the year," he added.