Renting your place on Airbnb might help you pay your rent, but it’s making New York City — and San Francisco, Montreal, Berlin and other popular destinations — even less affordable than they already are.
The young and mobile love Airbnb. It’s a step up from crashing on a friend or a stranger’s couch without shelling a month’s rent on a three-day stay at a hotel. It’s also a great way to make up for rent that’s “wasted” on an empty apartment.
'In an attempt to make an extra buck, you may be slowly screwing yourself out of the market.'
For those of us trying to survive in some of the most expensive cities in the world — where everyone wants to live, but fewer and fewer people can afford to — it might even be what allows us to be able to pay the rent.
But wait until you are looking for your next place to live, and see the going rates for rentals in the city.
If you look at the economics of it, Airbnb is ruining your life. Or, at least, your chances at a lasting life in the city. In an attempt to make an extra buck, you may be slowly screwing yourself out of the market.
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That’s the concern of housing rights advocates, tenant groups, and elected officials who have railed against the online rental website and others like it — they are diminishing the supply of affordable housing, they say, making it even harder for most of us to pay for a decent place to live and still have enough money for food and transportation.
“Every unit that’s being used for illegal hotel activity is a unit that’s not on the residential housing market,” Marti Weithman, director of the Goddard Riverside SRO Law Project — one of several community based tenant organizations to have raised the issue — told VICE News. “It’s really worsening New York City’s chronic housing shortage, particularly for low and middle income folks.”
Not Just a New York Problem
On Wednesday, San Francisco City Attorney Dennis Herrera filed two separate lawsuits against short-term rental “scofflaws” who egregiously — and illegally — converted residential apartments into commercial lodgings they advertised on Airbnb and other sites.
San Francisco. Photo via Flickr.
“In the midst of a housing crisis of historic proportions, illegal short-term rental conversions of our scarce residential housing stock risks becoming a major contributing factor,” Herrera said in a statement, promising more lawsuits to come. “We intend to crack down hard on unlawful conduct that’s exacerbating — and in many cases profiting from — San Francisco’s alarming lack of affordable housing.”
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Last January, Berlin started to heavily fine anyone renting out their home for short periods.
'You can make more money renting out an apartment every night of the month for $150 versus what you could get in rent.'
Airbnb denies that it is contributing to the affordable housing shortage that is rampant in many cities.
“In fact, Airbnb makes cities more affordable,” David Hantman, Airbnb's head of global public policy, wrote on the company’s blog. “Sixty two percent of Airbnb hosts in New York said Airbnb helped them stay in their homes and the typical Airbnb host in New York earns $7,530 per year — a modest, but significant amount that can make a huge difference for families.”
The company hired a consulting firm to test its housing supply theory against the case of New York City. The firm concluded that “the short-term rental industry is having little effect on urban apartment markets.”
The report basically says that operating short-term rentals takes so much time and effort that most landlords aren’t really willing to go through the hassle.
'New York City lost almost 400,000 affordable housing units in the last decade.'
But critics say this is BS, as evidenced by the growing number of small and big landlords turning Airbnb-type rentals into their primary focus.
“Because you can make more money renting out an apartment every night of the month for $150 versus what you could get in rent, those units are taken out of the market for people who live here or are trying to find a place to live here,” New York State Senator Liz Krueger, an outspoken critic of the practice, told VICE News. “We have the highest rent in the country and the lowest availability of units. We have a serious, real-life problem for people trying to live in this city.… Now, you layer on top of that what Airbnb and others are doing and you’re seeing a significant removal of apartments that were intended to be for residents of the city.”
Krueger estimated that up to 40,000 New York City units are being listed on Airbnb, not including listings on similar sites.
New York City. Photo via Flickr.
Other estimates put that figure at about 20,000. Either way, that’s a lot of apartments in a city with a vacancy rate that’s regularly as low as one percent.
“For anyone looking for apartments in 2013, there were only about 67,000 apartments available. That’s a really tight housing market,” Bennett Baumer, an organizer with the Housing Conservation Coordinators, another housing advocacy group, told VICE News. “Airbnb is exacerbating the affordability crisis and the general anyone-looking-for-an-apartment crisis by taking almost 20,000 apartments out of the market.”
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As usual, the poorer residents of the city are the first to get hurt in the process, critics said.
To put things in perspective, New York City lost almost 400,000 affordable housing units in the last decade, according to a study released earlier this year by the Community Service Society, a group fighting poverty in the city.
Although New York has never been a bastion of affordability, things are looking pretty damn bad.
“Throughout the city, we’re seeing more and more gentrification, people being pushed out of communities they’ve been living in for decades, and this is just one more way that people are getting pushed out,” Weithman said. “Airbnb says it’s all about the ‘sharing economy,’ when in fact there are tenant groups and community-based organizations in the city that are talking about their affordable housing impact.”
“Essentially, if their operations were to be legalized, it would gut rent stabilization as we know it,” she added. “And those are the protections that we have in the city to make housing affordable to all of us.”
Rental and Zoning Violations
Affordability and availability of housing stock is only one of the concerns raised by critics. According to the New York attorney general — who has dragged Airbnb in a messy lawsuit — Airbnb is violating various rental and zoning regulations.
'People who actually list their apartment often don’t know what the law is.'
According to the neighbors of Airbnb users, the site is bringing overcrowding, loud parties, and even brothels into their buildings — leading some tenant groups to self-police and report residents illegally listing units on the site.
Airbnb offered to “go legal” and start paying taxes — some $21 million in New York. But that’s hardly going to bring rents down. And for a city of 8 million, it’s not even that much.
“If you’re trying to find a place that you can afford, what’s the difference if somebody is paying tax? It doesn’t really have anything to do with affordability or availability,” Krueger said. “And 21 million, if somebody put it on a platter and said, ‘Here, go build affordable housing,’ that would get you 32 units. That’s not really doing much for me.”
New York City. Photo via Flickr.
But that’s not all.
Most people listing their apartments on the site — including 2/3 of those in New York — seem to either not know it’s illegal or just how illegalit is.
“People who actually list their apartment often don’t know what the law is, they just see it as, ‘Oh good, I’ll make some money,’ ” Krueger said. “And then they’ll find themselves in court, being evicted from their homes, because it’s illegal.”
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On its website, Airbnb encourages users to be “responsible hosts” and check their leases and renting laws in their cities. But the company doesn’t take responsibility for people breaking those laws.
'We have strong laws in the city for a reason.'
"Unfortunately, we can't provide individual legal assistance or review lease agreements for our 500,000 hosts, but we do try to help inform people about these issues,” Nick Papas, a spokesman for the company, told VICE News. “Countless families have been able to pay their bills and stay in the city they love thanks to Airbnb. People who occasionally share the home in which they live aren't hurting anyone and landlords who seek any excuse to evict tenants so they can raise the rent are only helping themselves."
While it’s safe to assume the landlords who turned to listing apartments in bulk know they are breaking the law, once again, it’s the small guys who risk paying the highest price.
“Airbnb for the most part does not even talk to its hosts about this issue,” Baumer said. “Because it’s interested solely in taking the 12 percent of the rent or however much it is, and move on to the next one.”
The law, critics hope, will put an end to that.
“We have strong laws in the city for a reason,” Weithman said. “There’s a housing crisis.”
Follow Alice Speri on Twitter: @alicesperi
Photo via Flickr