Does Airbnb Impact the Affordable Housing Market?

In a recent post on 6sqft, Michelle Cohen dissects the role of room-sharing companies like Airbnb in the affordable housing market. Airbnb, valued at $10 billion, is the largest network with over 800,000 listings worldwide. Despite launching in 2008, only recently cities such as New York City, San Francisco, and Portland have embraced this new hotelier and passed ordinances to ensure regulations and hotel tax collection.

However, according to a report produced by the New York State Attorney General’s office and released in October of 2014, "at least 4,600 units were booked in 2013 for at least three months. Of these, nearly 2,000 were booked for a cumulative total of over six months; the percentage of host revenue from units booked as short-term rentals for more than half the year increased steadily, accounting for 38% of the site’s revenue by 2013. The report summary cites this as evidence that 'short-term rentals are displacing long-term housing options.'" Indeed, during the study timespan, the top Airbnb commercial operator in NYC generate $6.8 million in revenue from 272 unique listings. The report illustrates how financially lucrative it is for entrepreneurs to buy residentially zoned properties, and rent them for higher rates on the short-term market.

The situation in San Francisco was discussed in a recent SF Chronicle article with the executive director of SPUR, Gabriel Metcalf. Metcalf shares, "From a policy perspective, the real issue is whether there are a lot of units that have been removed from the housing market because of short-term rentals. It looks like that’s not a big number yet, but that’s what we need regulation to control so it doesn’t become big." Indeed, in San Francisco there is much debate as to not only the cause and effect of the city's unaffordability, but also what role Ellis Act evictions play as compared to  that of Airbnb rentals.