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New Report: Airbnb Causing Rent Escalation on the Lower East Side (Updated)

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Screen shot from Airbnb's website.
Screen shot from Airbnb’s website.

A new report by New York City Comptroller Scott Stringer finds that Airbnb is causing rents to rise significantly in popular Manhattan and Brooklyn neighborhoods, including the Lower East Side.

In a press release, Stringer’s office explained:

The new analysis sheds light on how Airbnb listings, particularly in neighborhoods where they are most heavily concentrated, exacerbate New York City’s affordability challenges and make it harder for working- and middle-class families to make ends meet… Airbnb listings were heavily concentrated in parts of Manhattan and Brooklyn and had a greater impact on these neighborhoods. Approximately 20% of the increase in rental rates was due to Airbnb listings in midtown and lower Manhattan, including neighborhoods such as Chelsea, Clinton, and Midtown Business District; Murray Hill, Gramercy, and Stuyvesant Town; Chinatown and Lower East Side; Battery Park City, Greenwich Village, and Soho.

Lets take a look at some neighborhood-specific data from the report.

In 2016, there were 2,746 Airbnb listings on the Lower East Side and in Chinatown. Between 2009 and 2016, average monthly rent shot up by $242, to $1,294. There are, of course, many other factors that lead to rent increases, but the comptroller estimates that Airbnb is responsible for nearly 20% of the increase in this community. Airbnb accounts for about 3% of the total rental housing stock on the Lower East Side.

In a statement, Stringer said:

For years, New Yorkers have felt the burden of rents that go nowhere but up, and Airbnb is one reason why. 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. Airbnb has grown exponentially at the expense of New Yorkers who face rising rents and the risk of being pushed out of communities they helped build. If we’re going to preserve the character of our neighborhoods and expand our middle class, we have to put people before profits. It’s that simple.”

While Stringer says the report accounted for other factors, such as rezonings, Airbnb went on the attack yesterday regarding the comptroller’s findings. Here’s a statement the home sharing firm sent around to reporters:

Airbnb has filed a Freedom of Information Law request with the New York City Comptroller’s Office for any and all communications regarding the conception and development of their factually wrong report on the impact of home sharing on New York City’s housing market. The very foundation of the report is deeply flawed: assuming that all Airbnb Hosts are renting their homes 365 nights a year is akin to conducting a traffic study that assumes all cars in New York are on the road all day, every day. Additionally, other information has been brought to our attention and we have reason to believe that this report was influenced by powerful special interests. This report was paid for with taxpayer dollars and the public has the right to know about who participated in this snow job.
A 2014 report from the state attorney general’s office found that around three-quarters of all Airbnb listings in New York City were illegal. State law bars apartment owners and lease-holders from renting units for fewer than 30 days, unless the owner is present.

UPDATE 5/7 Airbnb continued its PR battle later in the day on Friday, with a letter from AirDNA, a company that analyzes Airbnb data. The comptroller’s report relied on information collected by the market research firm. Here’s part of the letter:

The (Stringer) report, which incorrectly interpreted AirDNA data to make assumptions on the impact of Airbnb on New York City rental prices, comes to flawed conclusions at great cost to the thousands of Airbnb hosts that rely on the platform to make ends meet. At no point did the Comptroller contact AirDNA to ask for guidance or our professional expertise on how to read the data, leading to several crucial errors in his interpretation of the numbers. The Comptroller mistakes every unique listing ever uploaded onto the site as the number listings that were active in that year. A large portion of Airbnb listings are not active. They sit idly on the site, made unavailable for rent by hosts and/or unbooked by guests, and therefore have little to no effect on rent prices.

In response, Sascha Owen, a spokeswoman for the comptroller, told the Times,  that the report, “took an empirical, data-driven approach to assessing this Airbnb effect and shared it with the public… It’s no surprise that AirDNA would attack a credible report when their own bottom line depends on Airbnb’s success.”

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