It’s no secret that renting in NYC isn’t a picnic. But just how brutal is it? Well, Airbnb just got called out.
An FKD Feature exclusive

If you have lived in NYC — or indeed any metropolitan city such as Boston, San Francisco, Los Angeles, etc. — then you likely already know all about how the rental game is awful and lucrative for renters and landlords respectively. That is to say, often more than 30 percent of our income goes just to putting a roof over our heads. But according to a study by New York City’s Comptroller Scott Stringer, the numbers — expected as they might be — are quite appalling when they are added up. And that’s exactly what Mr. Stringer did. Specifically, he analyzed how Airbnb was impacting renters from 2009 to 2016 vis à vis rental costs.

The study

The study detailed Airbnb’s impact on housing affordability. That’s right, Airbnb is not merely taking advantage, but actively impacting the housing climate (and the report claims they are impacting it negatively, at least where renters are concerned.) According to Stringer, if you isolate the Airbnb effect, prices would be dramatically reduced on listings. Alas, according to the report, because of Airbnb’s listings, which, when rented for short-term stays push up the price of the remaining supply, prices have gone way, way up. In fact, “for each 1 percent of all residential units in a neighborhood listed on Airbnb, rents in that neighborhood went up 1.58 percent,” the report argues.

Airbnb is clearly unhappy with the report

Stringer estimates that $616 million is the net loss for renters in New York City for the year of 2016 alone. But Airbnb has recently offered a counterclaim. The online-housing website called out the report, claiming that it was “wrong on the facts,” as well as that it contained “substantive issues with the methodology.”

And yet, the study insists, Midtown and and much of the lower Manhattan area have taken major hits as a result of Airbnb’s business model, especially areas such as Chelsea, Greenwich Village, and the ever-popular and trendy Soho neighborhood. According to Stringer’s report, “about 20 percent of rent increases in those areas were due to Airbnb.” The study found that more than half of the listings on the site (52 percent) were in Manhattan (with a particular concentration south of 59th street).

“From Bushwick to Chinatown, and in so many neighborhoods in between, affordable apartments that should be available to rent never hit the market because they are making a profit for Airbnb,” Stringer said in the report.

The San Francisco-based startup had more to say on the matter, however, and their refutation of the report did not stop with merely saying it was wrong on the facts. Airbnb went further, making a point of noting that most Airbnb listings were shared by the owners with their renters, and also that the homes were never permanently removed from the market. According to Airbnb, this report seems something of an ignorant witch-hunt looking for somebody to blame: “Once again, [those who list their homes on Airbnb] are being faulted for an affordability crisis that they have no part in — and one that they themselves face every day,” the company said.

Takeaway

Airbnb took a lot of flack from Stringer’s report on Thursday morning, and, late into the day, Airbnb was still struggling to do damage control on all the shade that was thrown their way. Chris Lehane, the company’s head of policy and public affairs, made a statement arguing that the data was outdated. He then attempted to redirect the public’s and press’ attention with some shiny new studies — these ones, reporting that rent prices in some New York boroughs had actually dropped as much as 6 percent in March. Additionally, Lehane and Airbnb have filed a public information request in order to do some fact-checking of their own on this newfound report.

We’ll see who comes out on top, soon enough.

 

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Posted 05.31.2018 - 12:00 pm EDT