September 30, 2016
In an op-ed published on Monday in the San Francisco Chronicle, Jason Furman, the chairman of the White House Council of Economic Advisers, rolled out a Housing Development Toolkit that offers thoughtful land use and zoning policy suggestions for solving critical housing market issues faced by cities across the U.S
For the most part, I am heartened by the president’s keen interest in helping cities combat rising rents and falling vacancy rates via zoning and land use initiatives.
But the White House’s toolkit falls woefully short in that it completely ignores a rapidly growing threat to affordable housing in New York City and across America: short-term rental of residences on platforms like Airbnb.
In his op-ed, Jason Furman succinctly points out that “basic economic theory predicts that when the supply of a good is constrained, its price rises and the quantity available falls.” Airbnb is the prime offender of this basic economic tenet in that it facilitates the widespread removal of housing from the New York City market, constraining supply and driving rent through the roof.
A recent study undertaken by Housing Conservation Coordinators and MFY Legal Services found that Airbnb currently offers 51,000 listings in New York City, of which 28,000 (55 percent) are illegal under New York state law. The average Airbnb unit in New York City is rented roughly half the year, rendering it unavailable for permanent residential housing and contributing to a citywide rental vacancy rate that stands at a staggering 3.45 percent.
That same study found that 8,000 of these Airbnb listings are controlled by commercial hosts who either have multiple listings or rent a single listing that they do not live in for 6 months or more per year. If these 8,000 housing units were returned to the market as permanently available residential units, the number of vacant units citywide would increase by 10 percent, and the vacancy rate would increase above 5 percent, the legally designated housing crisis threshold.
New York City is in the midst of an affordable housing crisis. Like many cities across the U.S., working families in New York face rising rents and plummeting vacancy rates. Finding an affordable place to live in this city is so difficult that recent regulations were passed to both incentivize and require the development of affordable housing across the city.
My peers in elected office and I will continue to actively pursue policies, rules and regulations to combat our city’s housing crisis, and this includes dealing with the meteoric rise of Airbnb and the devastating effect it has had on our housing market.
We appreciate the White House’s toolkit with solutions for creating and preserving housing options that our constituents can afford. But if the White House truly wishes to play a role in addressing the affordable housing crisis, it must pursue a holistic approach and take into account the depletion of housing stock caused by companies like Airbnb.
If the White House cannot compel short-term rental sites like Airbnb to abide by local laws, New York City will continue to hemorrhage housing, and all of the zoning policies in the world won’t be able to stop it.
Helen Rosenthal is a City Council member representing the 6th District in Manhattan. She is also a member of the council’s Housing Committee.