Residents of Lower Manhattan who lease (rather than own) their apartments are collectively paying more than $49 million per year in extra rent as a result of price pressures caused by Airbnb, the online “homesharing” marketplace and hospitality service that brokers short-term lodging in exchange for a percentage of the fee charged to the guest by the owner. This is one conclusion in a new report from City Comptroller Scott Stringer.
The analysis, titled “The Impact of Airbnb on NYC Rents,” groups Battery Park City, the Financial District, the South Street Seaport, Tribeca, SoHo, and Greenwich Village into a single catchment, referred to here as “Lower Manhattan.” The Comptroller’s evaluation also notes that there are 51,596 rental units within this district, of which 3,123 apartments (or some 3.3 percent) appear as listing on Airbnb. The study further notes that, between 2009 and 2016, the average monthly rent within this area jumped 21 percent, or $411, from $1,916 to $2,327.
Mr. Stringer uses regression analysis (a statistical process for estimating the relationships among variables) to project what rents would be in a given neighborhood if all vacant apartments were available to lease, versus what those rents end up being when some portion of those vacant apartments are unavailable to tenants seeking to lease, because these units have been taken off the market and reserved for use by Airbnb customers, who pay a premium for short-term rentals.
On this basis, Mr. Stringer concludes that of the $411 monthly rent increase experienced by the typical Lower Manhattan tenant since 2009, $79 per month is (for the average local apartment) directly attributable to Airbnb.
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City Comptroller Scott Stringer: “For years, New Yorkers have felt the burden of rents that go nowhere but up, and Airbnb is one reason why.”
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“For years, New Yorkers have felt the burden of rents that go nowhere but up, and Airbnb is one reason why,” Mr. Stringer says. “Affordable apartments that should be available to rent never hit the market, because they are making a profit for Airbnb.” He added that the firm, “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.”
During the period covered by Mr. Stringer’s report, Airbnb listings throughout the five boroughs of New York City expanded rapidly, swelling from just 1,000 in 2010, to more than 43,000 in 2015. Most (if not all) of these accommodations are offered in violation of existing State and City laws, which tightly regulate the hospitality industry.
Between 2011 and 2017, according to the report, New York City lost nearly 183,000 affordable units of housing (defined here as dwellings renting for less than $1,000 per month), which is larger than the the City’s entire inventory of public housing.
In the midst of this affordability crisis, the Comptroller documents that New York City renters in the aggregate are paying an additional $616 million in annual rent as a result of the growth in Airbnb listings.
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This apartment in the Riverhouse condominium was recently being offered for $720 per night on Airbnb.
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Mr. Stringer’s report echoes the findings of earlier research, published in January by the School of Urban Planning at Canada’s McGill University,which found that short-term apartment rentals, such as those brokered by Airbnb, are playing havoc with New York City housing, by increasing rents and decreasing the available supply of apartments. More specifically, the McGill report (which was commissioned by the Hotel Trades Council — a branch of the AFL-CIO that represents hotel and gaming workers in New York and northern New Jersey) noted that in Lower Manhattan, Airbnb has shrunk the pool of dwellings by more than 1,000 units.
The McGill researchers also looked at Lower Manhattan in isolation for two key metrics: the percentage of overall rent revenue now collected by Airbnb, along with the percentage of total housing units used as Airbnb dwellings.
For the first tally, the analysts found that Airbnb collects between 2.6 and 5.0 percent of all rent in four areas of Downtown (western Tribeca, Greenwich South, the Seaport District, and the eastern part of FiDi), while raking in between 1.1 and 2.5 percent of all neighborhood rental income in the southern areas of Battery Park City, FiDi, and Tribeca. The same tabulation indicated that Airbnb gets less than 1.0 percent of all rents in northern Battery Park City.
For the number of local apartments being used for Airbnb rentals as a percentage of total housing stock, the report says that as many as 2.0 percent of all units have been given over to Airbnb rentals in Greenwich South, while fewer than 1.0 percent are being put to this use in southern FiDi, and Battery Park City.
To read Comptroller Stringer’s report, “The Impact of Airbnb on NYC Rents,”please click here.