October 31, 2016
Mark Twain once said, “Buy land, they’re not making any more of it.” With New York City mired in an acute housing shortage, and half of all renters paying more than a third of their income toward rent, Airbnb has taken that sentiment to a new and treacherous level for tenants.
Airbnb may not be in the business of actually buying land, but their business model is just as dangerous and exploitative of the housing market. They incentivize big commercial operators, many using deceptive profiles on Airbnb’s website, to convert thousands of residential housing units into short-term tourist rentals. While this may be very profitable for Airbnb, it’s taking away housing and increasing rent for the rest of us.
For years, while the city has struggled to create and preserve affordable housing – a process that takes years and hundreds of millions of dollars – Airbnb’s illegal operation has grown virtually unchecked. Six years ago, they had fewer than 1,000 listings, and now they have close to 50,000. And as their footprint has grown, so too has their negative impact on the housing market.
In 2014, an investigation by the New York State Attorney General found that nearly 75 percent of Airbnb listings in New York City were in violation of the law, and that nearly 40 percent of their listings and revenue generated came from commercial hosts renting multiple properties in which they did not live. His investigation further showed that Airbnb’s top twelve hosts each made more than $1 million – a far cry from the image that Airbnb attempts to paint of themselves as a website that helps middle class families earn a few extra dollars a month renting their own homes.
Since that time, numerous independent studies have all corroborated the Attorney General’s findings, and shown that Airbnb is increasingly taking away precious housing supply while driving up rents at a time when supply is already limited and rents are skyrocketing. A recent report commissioned by Housing Conservation Coordinators and MFY Legal Services showed that Airbnb’s commercial operators had stolen over 8,000 housing units last year alone, and if these units were returned to the residential housing market, it would increase the number of vacant units available for rent by 10 percent, providing critical housing supply for New Yorkers struggling to find an affordable place to call home.
Not only is the housing pie getting smaller for New Yorkers, but it’s more expensive thanks to Airbnb. Studies have shown that from 2011 through 2015, rent increased nearly double the citywide average in Airbnb’s top 20 neighborhoods. In the Upper East Side, Hell’s Kitchen, and the East Village, where Airbnb illegal listings accounted for roughly 18 percent of the available housing supply, rents increased from 12 to 22 percent. In Williamsburg, Bed-Stuy, and Greenpoint, where Airbnb listings accounted for 12 to 17 percent of the available rental market, rents increased by upwards of 49 percent.
Under New York law, most of Airbnb’s operations have been illegal for years. But with Airbnb refusing to share data and providing safe harbor for these housing scofflaws, the already challenging process of identifying and enforcing the law against bad actors has proven to be nearly impossible.
That’s why the enactment of new legislation to strengthen prohibitions against illegal short-term rentals is such a game-changer. With this new enforcement tool, the city will be better equipped to track and crack down on the worst offenders.
This is a good bill, and the Governor did the right thing by signing it into law this past week. As a housing advocate and tenants’ rights activist, I have seen firsthand the harmful effects of entire residential buildings being converted into Airbnb tourist traps. Families are displaced from their homes. Tenants, whose pocketbooks are already stretched to the max, have to struggle with higher rents. And the safety of seniors is jeopardized by strangers coming and going from our buildings at all hours of the day and night.
This is not about a pitched battle against new technology, as Airbnb would have you believe. It’s a fight to preserve an essential commodity our city is in short supply of – affordable housing.
By Michael McKee, Tenants PAC Treasurer
Source: http://www.sharebetter.org/story/sorry-airbnb-but-nyc-is-not-for-sale/