Airbnb and Housing

> And don't even get me started on the fact that while looking for a place to live, landlords have justified their insane asking rate by telling me that the previous tenant rented out a spare room on Airbnb.

Ah, that's lovely. Coupled with the "no subletting" clause standard in NYC leases, this means that landlords can jack up rent while also giving themselves an easy excuse to terminate your lease at any point in the future when they decide it's convenient (for them) to do so.

(If you think this is too sleazy and underhanded to be believable, you've never tried renting an apartment in NYC. There are certainly some great exceptions - my current management co. is great - but I've heard some great horror stories, and experienced one of my own.)

There are entire walk-ups in New York dedicated to short-term leasing through Airbnb. Entire walk-ups. A friend of mine has a landlord that does this. I only appreciated on an academic level the effects that Airbnb would have on the rental market until I learned about this practice. Now, it's very real to me.

Entire walk-ups.

You're right; we should have linked to it. I'm changing that now.

Also depends on how they classify 'NYC host'. Last month I rented a place on 1st Ave. that was actually owned by a real estate company in San Diego.

The place was fine, but the experience trying to coordinate with them was... not great. They were clearly just jumping on the bandwagon to make a quick buck.

You are correct that there are some hosts that list multiple properties, thus skewing the listing breakdown. It depends on the city. In most cities, room nights and revenue for "primary dwellings," meaning the homes people live in, are around 70-80%. We are in 34,000 cities, so this really varies quite widely. I would like to see the breakdown to be skewed much closer to primary dwellings for two reasons - (1) they have much higher review scores from guests, and (2) they don't typically enrich cities the way ordinary hosts do (though there are always exceptions. We are actually working with cities and our community to remove corporate rental companies that don't meet the above.

Anecdata: I stayed in NY last January with a guy who had 10 different places from Greenpoint to Williamsburg.

Does the percentage even matter? You need to weight by cost/benefit, under some releveant model.

> If Airbnb is used to help pay for rent, that necessarily pushes rent upwards.

I definitely know people who are contemplating getting a bigger place with a spare room specifically to AirBnB it. Besides general effects on the housing market, this can increase people's financial risk (depending other aspects of their finances, such as savings cushion). It amounts to over-provisioning their housing in the hopes of reselling the spare capacity at a profit (you figure you can get more on AirBnB for the 3rd room than the incremental 2rd->3rd room costs you). That can turn out badly if somehow the reselling doesn't work, isn't as profitable as you thought it would be, you end up unable to manage it for a period of time so the extra capacity sites idle, etc. Sort of like buying extra servers in a colo because you figure you can make the money back by renting VPSs at a markup. It can definitely work, but to really make it work you are now in the VPS business, and you might lose money if you aren't good at that business.

I'm concerned about the effect this could have on family housing in San Francisco. If a family already owns a house and uses airbnb to rent out a downstairs bedroom now and then, sure, I could see that helping. But if a family is in a bidding war with someone without kids, the anticipated income from an airbnb rental could enable the bidder without a child who needs an extra room (to say nothing of the very high costs associated with raising a kid in SD) to go much higher. This would have the effect of making it harder for families to purchase what is currently zoned as single family housing.

Now, this is just a concern. It may not currently be happening, and it may be unlikely to happen in the future. According to this post, Ken Rosen, an economist at UC Berkeley, conducted a detailed study for airbnb and states that "...not only is there no evidence to suggest that short-term rentals are making homes less affordable, our research and analysis indicate that home sharing has the potential to make urban housing more affordable for more families."

I was unable to find a link to this study on the blog post... is this it?

http://urbanland.uli.org/news/short-term-rentals-and-the-hou...

The only reference I get to a "family" here is "...the amount of income from a rental alone is not generally sufficient to live on, but it can go a long way in providing supplemental income for a family." Sure, but is a family as able to access this supplemental income as someone without kids, and more free bedrooms? And what about the "bidding war" scenario, above? Even if it is not a big factor now, it could become a big factor once the expectation of rental income becomes the norm.

The urban land article references this study:

http://www.rosenconsulting.com/products/rentalreport.html

The roseconsulting link makes no reference to families. I recommend people who are interesting read it. The summary is that other factors have led to the rise in housing costs, including restrictive zoning laws and an employment boom, and that airbnb (and related) rentals are too small a part of the rental market to have much of an effect. Does this mean they could have a large effect if it become more widespread?

Hey, this is not actually what we are saying. Here is what we are saying. The vast majority of people in these cities (~85-90%) are renting the homes that they live in (also know as their primary dwelling) - either a living room, bedroom, or their whole home when they are gone. 60% of them depend on the money they make to pay their rent or mortgage - this according to the surveys we have done for our economic impact studies. These people were living in these homes before Airbnb, so they had a choice to either move out and find a cheaper place (presumably in a different neighborhood or out of the city) since they cannot afford the vacant space, or put it on Airbnb. Many of these people are self employed or under employed. A classic example are artists. This was my story when I moved to San Francisco. If these people moved out, the likely new tenants would be people who could afford to move in without renting on Airbnb. Now, of course some people could move in with the intention of renting on Airbnb. We are not saying this never happens. What we are saying is that more people are using Airbnb to keep their homes than using it as means of displacing people. The property manager issue is a real problem that we are dealing with.

Right. In the very short term, they are helping people, but in the long term it's an economic arms-race. Put in very simple terms, if you make owning a house more affordable, houses will get more expensive to compensate.

Hacker News stories need an auto-bot-post explaining supply and demand and "seller's market" AMD "buyer's market".

Which is no doubt very true. But this still may be an argument for keeping Airbnb in the bigger picture if you value diversity in your neighborhoods. Any by diversity I mean the ability for many low to mid wage workers to live near their jobs.

So you found there to be some reliable information in the Airbnb article? Please extract that here, as I all I found was a bunch of unsupported defensive statements cleverly disguised as scientific conclusions.

Just because the Slate piece IS bunk, it doesn't follow that the airbnb response IS NOT bunk. They're both wrong in how they're presenting the "rightness" of data.

That's kind of crazy -- more than one out of ten is an illegal hotel as per their own statistics.

There was something mentioned here: http://skift.com/2014/02/13/airbnb-in-nyc-the-real-numbers-b... that has more explanations...

Worse. 2/3rd of listings are or would be violating NY laws:

"Two thirds of the listings that contain user reviews are for the “Entire home/apartment” room type (listings without reviews are slightly less, at 64%). Because of a New York State law regarding short-term housing, it is almost always illegal to rent a full apartment when the host is not present for less than 30 days."

Agreed - especially given the popularity of sites like the Tampa Bay Times' politifact.com, I hope we'll continue to see newspapers take advantage of their fact-checkers and editorial teams outside (and inside) of their own publications. It might be a great way for those organizations to stay relevant - sort of like "Snopes for the real world".

There isn't actually evidence that this occurs that I am aware of.

> The solution to this problem is to allow property developers and landowners to freely increase the housing supply.

I dont think such a thing will ever be possible. Some big companies in the housing market might even be against it.