Inside Airbnb: New York City
insideairbnb.com
insideairbnb.com
http://www.nyc.gov/html/housing/assets/downloads/pdf/housing...
It seems to me that if New York wants to reduce rents, they should build more housing.
FWIW
NYC has added 30,000 new hotel rooms since 2007. It would seem that AirBnB is adding nearly the same # of rooms.
Zillow lists 25,000 rental units in NYC. This is the same order as the # of rooms being rented on AirBnB.
Why can't we accept that AirBnB is contributing to increasing rental prices in NYC? What's the point of pointing to hotels every time someone mentions AirBnB?
I would expect that the founders of AirBnB genuinely care about communities where they operate, and would be motivated to advance the community's interest.
What leads you to you expect that?
Ultimately, if market forces make it more profitable for rooms to be used for short-term stays than as homes, it will be very hard to stop that from happening and not at all clear that we should stop it from happening. There are arguments the other way, but it is depressing to hear only the glib assumption that the free market must be stopped. For example, it's not ultra-obvious that policy should favor those who choose to live in Manhattan over those who choose to visit. Among other things, I think it's likely that the average income of the visitors is lower than that of whoever would be renting.
That's a good discussion to have I think. But we are talking about Airbnb here.
re: Ultimately, if market forces make it more profitable for rooms to be used for short-term stays than as homes, it will be very hard to stop that from happening and not at all clear that we should stop it from happening.
Yeah, you might be right. The cost of this is lack of affordable rent in cities like NYC. Some of us believe that we have a responsibility to ensure this. Now, the debate is about how big of a role Airbnb is playing in this.
Granted I've only stayed in entire-appt bookings, but every single one of them has been run by a real estate person(s)/ entrepreneur managing multiple properties, who does not actually live there, and all of them have some self check-in so you never meet the person. It's really nothing more than a rev stream for these "hosts." I've been doing a lot of AirBnBs in Tokyo currently, and it's especially heinous here, like trying to up sell you on other stuff, or trying to justify a crappy, cheap bed because "it's factored into the price."
I just don't know about AirBnB's whole 'community' angle.
For example, they could encourage hosts to provide a list of top 3 things to do / eat / see, and aggregate this for guests.
Based on a guest's FB profile, they could suggest neighborhoods where they would enjoy staying, or connect guests to hosts who share similar interests.
There is so much potential, and I won't hold the current lack of community oriented benefits against them. Startups put a stake in the ground, and then build towards it.
That facet is incompatible with 'community.' Forcing them to recommend stuff isn't community, but it is a nice perk.
Granted not everyone is like that on AirBnB, I'm sure there is much more community for shared apartments where you are living with travelers... but for whole apartments I would venture the large majority at this point are these profit seeking/multi property/ no residents types.
An externality would be something like if AirBnB guests were a major nuisance to other people and there was no market solution to this problem. It's true that AirBnB guests and renters are often violating housing agreements and local regulations, but I'm not actually convinced the harm of this, to the extent it even exists, outweighs the economic benefit of more people being able to travel to New York--one thing that is clear is NYC hotels are too few and too expensive.
> That's not really an externality, that's a market equilibrium. New York housing is very scarce, and you should beware of economic thinking that arbitrarily assigns scarce resources to certain people. Everyone has a right to a place to live, not everyone has a right to a place to live in the most in-demand parts of America.
and
> one thing that is clear is NYC hotels are too few and too expensive.
It's particularly baffling because there is much greater flexibility around choice with temporary lodging than permanent lodging on a wide number of axes (location, comfort, cleanliness, etc.).
As for your other argument:
> An externality would be something like if AirBnB guests were a major nuisance to other people and there was no market solution to this problem.
If my neighbors are renting out their apartment on AirBNB, and their guests are a continual nuisance, what is the "market solution" to my problem? If I complain to the guests or the tenants listing the unit, there's a good chance that they won't listen. The only other person I could complain to is the landlord, and if the landlord does decide to pull their lease, that's recourse that they're only able to take because the tenants are breaking the law[0] - a law that was put in place specifically because of this externality.
A "market solution" might be if AirBNB allowed neighbors to rate rentals on AirBNB, but that's a feature I would be very surprised if they ever added[2].
[0] The fact that they are breaking the terms of the lease does not inherently give the landlord the right to break the lease, but the fact that they are breaking the law may.
[1] The history of tenant rights is pretty well-studied and documented, and there's a reason that virtually every jurisdiction in the US places restrictions of some sort on temporary lodging.
[2] And frankly, I'm not sure it would do much good anyway, because the people reading those ratings would be the guests, the very people causing the issues in the first place.
These numbers are pretty rough due to things like suites vs multi room apartment listings, etc. but:
- They're listing about the same number of rooms as the 30 largest hotels in NYC combined.
- NYC only has about 70,000 rooms total, so AirBnb is fast approaching half as many rooms as NYC Hotels total.
Stats from: http://en.wikipedia.org/wiki/List_of_hotels_in_New_York_City
That is insane.
Not sure how many hotel rooms there are, but I wouldn't be surprised if it's about 1/3rd the number of Airbnb listings.
http://insideairbnb.com/get-the-data.html
Including property reviews (written by 3rd parties) as a Public Domain data-set seems pretty clear-cut inappropriate - in the same way that it's no ok or legal to crawl Yelp.com, compile a data set of reviews and deem them 'Public Domain' for anyone to use a they see fit.
I mention all of this because this kind of abuse of the concept of Public Domain harms its reputation and also puts fellow community members in difficulty if they go to incorporate this "Public Domain" dataset and later run into legal issues with the original rights holder.
I assume most HN users are firm supporters in the true concept of "Public Domain" and thus I hope the community will call out improper and harmful miss-interpretation of the concept.
It appears that there is essentially infinite demand to push prices up.
http://www.nytimes.com/2015/02/08/realestate/wealthy-chinese...
http://www.reuters.com/article/2014/04/25/us-realestate-chin...
http://www.businessinsider.com/chinese-all-cash-buyers-in-us...
My brother and his wife purchased a house there for around $500k several years ago, and 18 months later sold it for $750k+.
As one example, Vancouver, notorious for huge amounts of international money buying up property, has relatively cheap AirBnb units
There's a phenomenon which is (I think) unique to New York. Many newly-built condos are purchased by foreign owners[0] who buy them literally sight-unseen. For them, it's strictly a financial investment, as high-end New York real estate is a relatively safe investment (in the long run, not the short run). We're talking people who have the cash to buy a $10MM condo[1] (or even penthouse, for far more) from halfway across the world, so they're not interested in the hassle of renting the unit out. As a result, they literally sit vacant. You can see these unoccupied "ghost apartments" in buildings really clearly at night in buildings that have no units available for purchase or rent.
These investors go to great lengths to keep their identities concealed, but the practice itself is not secret at all. There have been a number of exposes about this recently in New York publications (New York Times, New York Magazine, etc.), so it's pretty well-known. It's a particularly hot issue because, due to loopholes, these foreign investors pay essentially no property tax (literally a few hundred dollars per year on units worth several million).
However, this has relatively little to do with the current discussion, because these are not the types of units that would be listed on AirBNB anyway (both because they would be way outside the general price range, and also because these buildings are far, far more strict about these matters than the typical rental unit). Furthermore, I don't think the number of these vacant sales is particularly high compared to the real estate market in NYC in general; they are so valuable that the missing tax revenue is incredibly large, even if the number of units is relatively small.
We also have a situation in which most rental buildings are purchased by foreign owners, who do actually rent them out through the normal legal means (through management companies), but there is nothing new about this. Almost anybody who rents in NYC pays their rent to an LLC named after the building (e.g. 100 W 21st St., LLC), and this LLC is bought and sold by (usually) foreign investors who don't want the hassle of the public eye, and use the LLC as an easy means to transfer ownership without any filing requirements[2]
[0] These days it's usually Gulf oil money, though ~10 years ago it was East Asian billionaires, and ~10 years before that... you get the picture.
[1] More likely a co-op, actually, so for the buyer, they are literally purchasing shares in a corporation. The fact that those shares are backed by some highly-valued real estate is a mere detail, the way algorithmic day-traders buy and sell futures and derivatives without thinking about the underlying assets!
[2] IIRC, property sales require certain public filings, but because the unit is owned by an LLC, and the LLC is what's being sold (not the property), these filings are avoided.
Genuinely curious - is this something that someone has proven (i.e. is there data somewhere to support this)? Or is it more of a personal observation? Thanks.
Think of building codes. Just because lots of people don't finish their basement to code, doesn't mean it's wrong to have building codes.
Most economists do not agree that rent control is a useful way to maintain housing affordability: http://www.igmchicago.org/igm-economic-experts-panel/poll-re...
I don't see any real support here for the assumption that Air B'n'B is having a negative impact.
If at all, this proves that long term rental units are being rented on Airbnb. This might not drive rent but drives availability of units.
Interesting data though.
This kind of nonsense is almost guaranteed to be backed by big business hotel chains.
In response, I will double down on my commitment to spend time in more Airbnbs, and not at hotels.
Without rent stabilization, even with a decent job in tech, I would be commuting 2 hours each way (or sharing a 2 bedroom apartment with 5 other people) instead of 35 minutes.
If rent reflected current building sale trends in my neighborhood, my rent would be increasing >60% year over year.
OK, sure that would suck for you, but it's what the market is doing. Artificial price ceilings restrict supply and create arbitrage opportunities. Living in Manhattan is not a human right.
I have a feeling that luxury units laying vacant, purchased in a cash-only private deal, do more to drive up the price of housing than rent stabilization.
That, by the way, is a vast majority of investment in new housing stock in NYC. Some buildings cut a deal with the city to get tax breaks for providing 20% of the units as stabilized.
If rent were fully deregulated: good luck finding someone willing to travel three hours to work in a midtown office for peanuts (or, for that matter, in any job other than finance).
Do you have any non speculative examples of full deregulation actually increasing the stock of affordable, safe, up-to-code housing in a growing city?