In the never-ending battle over Airbnb's public image, city officials (and many affordable housing advocates) say the short-term vacation rental site removes possible rentals from the market and drives up neighborhood rents; meanwhile, Airbnb claims their site helps users earn a little extra income on the side, and helps drive spending to local businesses. Some new data might finally help us figure out who's right.
In a report released earlier this week, the Real Deal crunched the numbers to determine how much Airbnb is driving up rents in the neighborhoods where it's most popular, and the effects are rather significant:
Exactly how significant depends on what numbers you're looking at, however, and two different methodologies are at work here. The first is based on the Attorney General's assertion that Airbnb rooms or apartments listed for more than half the year count as "commercial."
It also incorporates Furman Center numbers that estimate by what percentage the portion of units removed from the market will raise rents in the area. So for Williamsburg/Greenpoint, where commercial units are between 0.6 to 1.15 percent of listings the neighborhood, they raise rents anywhere from $36.54 to $68.66, per TRD's data. Results using this calculation for the Chelsea/Hell's Kitchen/Midtown range were similarly dramatic, with an estimated rent hike between $38.55 and $66.62. The hardest-hit Brooklyn neighborhood turned out to be Bed-Stuy, where Airbnb rentals may be raising prices between $23.67 and $40.56.
There's also the more conservative "incentive model" (this is the one preferred by Airbnb), which designates a unit as "commercial" only when its potential yearly Airbnb revnue exceeds the neighborhood's median annual rent. (You can read more about the methodology drill down on the Real Deal.)
The point, essentially, is that Airbnb hosts who constantly rent out their homes rather than putting them on the market as regular rental apartments are almost certainly putting upward pressure on everyone else's rent.
For their part, Airbnb has said the report is based on "bad data," and calls the numbers "inaccurate and misleading." In any case, we'll be curious to see if the city starts wielding these numbers as a weapon against the embattled—but still wildly popular—site.