The High Cost of Short-term Rentals in New York City

Screen Shot 2018-01-30 at 13.09.53 copy.png

I’m thrilled to announce the release of my research team’s new report, “The High Cost of Short-term Rentals in New York City”. The report was conducted by myself and the graduate researchers I supervise in UPGo, the Urban Politics and Governance research group at McGill.

The report provides a comprehensive analysis of Airbnb activity in New York City and the surrounding region in the last three years (September 2014 – August 2017). Relying on new methodologies to analyze big data, we set out to answer four questions:

  1. Where is Airbnb activity located in New York, and how is it changing?
  2. Who makes money from Airbnb in New York?
  3. How much housing has Airbnb removed from the market in New York?
  4. Is Airbnb driving gentrification in New York?

Our key findings are as following:

  • Two Thirds of Revenue from Likely Illegal Listings: Entire-home/apartment listings account for 75% ($490 million) of total Airbnb revenue and represent 51% of total listings. 87% of entire-home reservations are illegal under New York State law, which means that 66% of revenue ($435 million) and 45% of all New York Airbnb reservations last year were illegal.
  • 13,500 Units of Lost Housing: Airbnb has removed between 7,000 and 13,500 units of housing from New York City’s long-term rental market, including 12,200 frequently rented entire-home listings that were available for rent 120 days or more and 5,600 entire-home listings available for rent 240 days or more.
  • $380 More in Rent: By reducing housing supply, Airbnb has increased the median long-term rent in New York City by 1.4% over the last three years, resulting in a $380 annual rent increase for the median New York tenant looking for an apartment this year. In some Manhattan neighborhoods the increase is more than $700.
  • 4,700 Ghost Hotels: There are 4,700 private- room listings that are in fact “ghost hotels” comprising many rooms in a single apartment. These ghost hotels have removed 1,400 units of housing from the long-term rental market, and are a new tactic for commercial Airbnb operators to avoid regulatory scrutiny.
  • 28% of Revenue: Commercial operators that control multiple entire-home/apartment listings or large portfolios of private rooms are only 12% of hosts but they earn more than 28% of revenue in New York City.
  • Top 10% of Hosts: The top 10% of hosts earned a staggering 48% of all revenue last year, while the bottom 80% of hosts earned just 32%.
  • 200% and $100K More: The median host of a frequently rented entire-home/apartment listing earned 55% more than the median long-term rent in its neighborhood last year. This disparity between short-term and long-term rents is driving Airbnb-induced housing loss and gentrification. Nearly 300 unique listings earned $100,000 or more last year.
  • Racialized Revenue: White neighborhoods make systematically more money on Airbnb than non-white neighborhoods. Neighborhoods with high existing Airbnb revenue (generally in Midtown and Lower Manhattan) are disproportionately white. But the fastest-growing neighborhoods for Airbnb (particularly Harlem and Bedford-Stuyvesant) are disproportionately African American.
  • 72% of the Population: Nearly three quarters of the population in neighborhoods at highest risk of Airbnb-induced gentrification across New York is non-white, as Airbnb continues to have a strongly racialized impact across the city.

The report was commissioned by the ShareBetter coalition, and can be downloaded from their website:High-Cost-Short-Term-Rental-Airbnb-Report1-793x1024.png

I posted a thread on Twitter running through the main findings and excerpting a bunch of the graphics, which is available here:

This New York report follows on our August release of “Short-term Cities: Airbnb’s Impact on Canadian Housing Markets”, and it’s likely to be our last such release for the near future, since we are now sitting on a giant pile of research findings which need to be written up for academic journals. But I’m very happy to have this report out in the public domain, and I’m really proud of what we’ve accomplished with it. In a separate post I’ll compile some of the press coverage the report has received so far.