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What Airbnb Did to New York City

179 points by pmcpinto 9y ago

ForHackernews 9y ago
Manhattan should probably just admit that it's going to become the Venice of America: a playground for tourists and the ultra-rich, with virtually no residents. There's nothing wrong with that. They can tax the hell out of it and use it to fund services in the rest of the city where real people live.
- aluhut 9y ago
  ...moving "the rest of the city" further out step by step.
- CPLX 9y ago
  > virtually no residents Seeing as how there are 1.6 million of those now that would be quite a turn of events.
  - ForHackernews 9y ago
    I didn't say it would happen overnight. That real estate is apparently more valuable as hotels and vacant investment properties than it is as housing stock. New York should embrace and exploit the fact that billionaires will pay high property taxes on empty condos, not try to fight it.
    - del82 9y ago
      Alas, the billionaires pay almost no property taxes on those condos: https://www.citylab.com/equity/2015/05/why-billionaires-dont-pay-property-taxes-in-new-york/389886/ https://www.citylab.com/equity/2015/05/why-billionaires-dont...
    - ryanwaggoner 9y ago
      In 2011 there were 34000 homes in Manhattan that were absentee owned or rented. That's a lot, but not in comparison with the size of the city. Also, the population in Manhattan has been going up since 1980, so it can simultaneously be true that there are more people living here and more vacant investment properties and hotel rooms. I doubt we're in any danger of Manhattan emptying out in the next few hundred years from anything other than a nuclear attack or climate change.
- ironjunkie 9y ago
  Kind of agree with you. Don't even think living in Manhattan if you don't pull at least 150k$. (Or be ready for some of those roomshare situations). I'm also amazed by the average night price at Manhattan hotels. Even during normal weeks, the cheapest is well above 300$/night.
  - louisswiss 9y ago
    Hotel Tonight app has 10+ hotels for under $160/night (for tonight) - that's with just a casual scroll...
    - ghaff 9y ago
      And add about 25% in taxes to that. Plus I can assure you that barring unusual circumstances cheap hotels (and $200 isn't exactly "cheap" in my book) in Manhattan are probably best avoided. Mind you, in my experience as a business traveler, hotel prices in San Francisco are often higher than Manhattan in any case.
      - ryanwaggoner 9y ago
        I just stayed in a Fairfield Inn & Suites on 58th last month for 4 nights (including Friday / Saturday) at $590 total ($147.50 per night). It wasn't luxury by any means, but it was perfectly nice. Also, the taxes were $90 of that, so 15%, not 25%.
        ghaff 9y ago
        Fair enough. This is probably sort of an off-season (to the degree there is such a thing) for Manhattan and I tend to stay in somewhat more expensive hotels. (And there are a lot of real fleabags at the lower end but I wouldn't expect a Marriott brand to be one.) Of course it varies depending upon what's going on in a given week, but I find it's harder to get a "deal" in SF, among other cities.
        louisswiss 9y ago
- chasing 9y ago
  Have you spent any time in Manhattan? It’s more than just Midtown. And the whole idea is smart growth that keeps cities accessible to everyone. So, no, it shouldn’t be left to become a “Venice for the super rich” or whatever.
  - ForHackernews 9y ago
    > So, no, it shouldn’t be left to become a “Venice for the super rich” or whatever. Why not? Because you like living there?
ordinaryperson 9y ago
Easy to blame lack of affordable housing on AirBnB and not, say, rent control laws or the difficulty of building new housing stock in the city. I get not throwing grandma out of the $250/month 4BR she’s been living in for 50 years, but it means something like 200,000 rent-controlled/rent-stabilized units are also raising everyone else’s rent by decreasing inventory. The endless red tape in new construction makes non-luxury bulidings unprofitable. Want cheaper rents? Fast-track approval for new apt buildings.
- teh_klev 9y ago
  I've said this before, and I'll say it again. AirBNB is a blight on rural areas (I can speak to this because I reside in rural Scotland) where affordable rental properties are simply disappearing from the market. These properties are barely fully booked during the summer months or holiday/peak seasons, and are empty for weeks at a time in the winter and off-seasons. This is such a waste and hugely frustrating for folks who live and work in these communities trying to find accomodation.
  - humanrebar 9y ago
    I want to point out that expensive rent in a rural area is different than expensive rent in an urban one. In a rural area, if it really comes down to it, people buy or rent a plot of land and throw a prefab home or trailer on it. In an urban area, you don't have a lot of options when rent goes up other than moving to a dangerous neighborhood or commuting from an inhumane distance.
    - teh_klev 9y ago
      > expensive rent in a rural area is different than expensive rent in an urban one I fail to see the difference, maybe you could expand? > In a rural area, if it really comes down to it, people buy Folks are seeking affordable rents because affordable (and habitable) property to buy is pretty much non-existent. > or rent a plot of land and throw a prefab home or trailer on it. Perhaps in your country, good luck with getting away with that in the UK. We've got some fairly strict planning rules that make that kinda thing more or less impossible. Also "renting a plot of land" for this type of use isn't really a thing here.
personlurking 9y ago
If anyone is interested, I recommend the nearly 18-hr PBS documentary on New York City [1], especially the latter parts (6 & 7) which focus on the building boom and the obsessions of Robert Moses [2]. Part 7 in particular (57 min) https://www.youtube.com/watch?v=GaLSRTNT5fw https://www.youtube.com/watch?v=GaLSRTNT5fw https://en.wikipedia.org/wiki/New_York:_A_Documentary_Film https://en.wikipedia.org/wiki/New_York:_A_Documentary_Film https://en.wikipedia.org/wiki/Robert_Moses https://en.wikipedia.org/wiki/Robert_Moses
- theklub 9y ago
  Haven't seen this yet, thank you.
- Sangermaine 9y ago
  Thank you for the link!
- piffey 9y ago
  "The Power Broker" is also a great read if you want to know more about Robert Moses.
peg_leg 9y ago
Air BnB is terrible for smaller, more touristy towns as well, like Traverse City, MI where housing prices and rents have skyrocketed. Used to be able to rent a granny flat as a service worker...those are all Air BnB'd now.
- bluedino 9y ago
  Which is funny - they shut down people on VRBO all the time who tried to rent their cabins out
- berbec 9y ago
  They stop fixing anything and offer the tenant tens of thousands of dollars to move out.
  - brooklyn_ashey 9y ago
    Actually, they have stopped offering tenants money to move out unless they get a crop of tenants who know their rights and have some kind of leverage to enforce them (these are usually more affluent tenants who hung onto stabilized lease who band together). Instead, they silently declare war on existing tenants by demolishing their homes while they live in them. Then, tenants who understand this to be classic slum lord harassment begin the assembly of an endless paper trail to get them to pay them to leave. By the time tenants get landlords to pay, the money offered is a piddling sum which covers only property damage and health care costs of tenants they have made sick or injured with dangerous, dust-filled construction air, and falling bricks from their ceilings. They break tenants down until the tenant will take a few thousand bucks just to get to leave and not be charged for the remaining months on their leases. I know this because these practices swept my and my friends' Brooklyn neighborhoods absolutely clean of long-term renters beginning about seven years ago. Another key development signaling that this problem is rampant is the fact that De Blasio has instituted a new initiative to punish landlords for harassing tenants in this and other ways because it had become such an epidemic. Unfortunately, the problem is so widespread that only the absolute worst of the worst are punished for treating tenants like this. But treating tenants like this at every level of the NYC market is really just part of the codified MDL landlord playbook in NYC. It isn't just for slum lords anymore. Market rate rental tenants are harassed, asked to provide 6 months' security (often not returned) and the landlords make no repairs until they are taken to court. This used to be the domain of the slum lords and a few ultra-shady landlords. These days, you can't pay for a rental unit and a landlord who offers a product you signed-up to pay for. (this basically applies to landlords under the MDL, not rich people who rent out a floor of their brownstone- they are not "career landlords") As a tenant, you need to keep filing HP actions in Housing Court in order to get basic services like heat and hot water, even in so-called "luxury" buildings. In this climate of unaffordable "luxury" rentals that are run like slums by the landlords (but look "nice" to a casual observer) a tenant's only option in many cases is to find a way to double up with a friend or to leave the city and Airbnb when they can. The tenant protection laws that are constantly trumpeted are only as good as the mechanism to enforce them, and while the city pays lip service to the idea of protecting tenants from harassment, injury, or swindle, their interest is really with the landlord. Housing court doesn't offer solutions to major tenant problems beyond what is listed in "The Warranty of Habitability". If a tenant wants the parking space they paid for so they can have a car to get to work while they live out in the boonies 1.5 hour commute on congested and failing public transport, they will have to put down a $20,000 retainer to have that case tried in Supreme Court. Housing court doesn't handle such matters. edited to: make a distinction between landlords who own large buildings and the wealthy folks who make extra money by renting out an unused floor of their brownstone. I'm speaking about the former here.
techservative 9y ago
AirBNB and Uber are the least racist companies on the face of the earth. No other companies on earth have opened up the avenues for direct social interactions across race and class lines the way these two companies have. Before Uber and AirBNB, how many opportuinities could you name for white Americans to do the following: 1. Get in a car with a black person for an hour and have a conversation about the election 2. Go into a racially diverse neighborhood and have a black family open their home to you and spend the weekend together 3. Have a black person come and rent a room in your own home and stay with your family for a weekend 4. Allow people of color who own property in predominantly black communities to profit from their own home The only ones who benefit from these hit pieces on AirBNB are hotel groups who want to regulate these arrangements out of existence and drive up costs for hotels. Who do you think is harmed the most when hotel prices rise? It is the same people of color (and everyone else), who have to pay more to stay downtown in major metropolitan cities. Any study of AirBNB that does not take into consideration social mobility and prices of affordable overnight rentals is a BS study, they are comparing bananas to coconuts. Yet we only see half of the story told in the media. Why is that? It’s almkst as though the authors of these studies have a distinct agenda. How are the effects any less racist than the rising home prices, which could easily be explained by...uh...the massive stock market rally we just had? Where are the studies about how people of color who own the buildings and units being rented out in ethnically black neighborhoods can now afford to send their children to college? Reading the comments here: Too many people ask too few questions and have too little understanding about the free market. Freedom of personal property is GOOD for Black People. It is the ONLY way black people improve their situation.
- nugi 9y ago
  All 4 happened with regularity before uber. Are you literally 12? And how did mentioning that minorities were disproportionately affected become calling either company racist? The only racisim i see is buried in the assumptions made in your comment.
  - visarga 9y ago
    I think the grandparent poster was right - AirBnb opens up a way for people to see life in communities that were difficult to access before. That's what I appreciate most about it - how natural it feels to live like a local person. Living in a hotel while travelling feels artificial now.
lewis500 9y ago
This is not quite Pareto distributed but it's getting there: "half of all Airbnb rentals that are conducted by only 10 percent of hosts, who earned a full 48 percent of all the revenue earned in the city last year. That’s some 5,000-people earning a combined $318 million. In contrast, the bottom 80 percent of New York’s hosts—the city’s 40,400 true home sharers—earned just 32 percent of all revenue, or $209 million, in 2017." While I like the exploration of facts like this, I don't really believe AirBnB is important to rents in New York City. In spatial statistics it is difficult to really prove anything rigorously, and this study doesn't even try to go the distance. "Applying Barron et al.’s national average ratio of exogeneity to New York City, this implies that, city-wide, Airbnb drove up rents by 0.8% in 2015, 0.4% in 2016, and 0.2% in 2017 (all for years ending in August). This is a cumulative 1.4% increase in rents over these three years attributable to Airbnb’s presence in the city." So while it might seem like the study looked statistically at AirBnB's impact on NYC, in fact it did not. They just used a sort of rough rule-of-thumb from a national average. But the rule-of-thumb is useless in particular cities (suppose a city had one unit on AirBnB; would adding one more increase rents?), and isn't even from published work. The authors of this study are not economists or econometricians, and it isn't peer-reviewed and never will be. Moreoever, you can use common sense: "Airbnb has removed between" (Dr. Evil voice) "7,000 and 13,500 units." New York City has 3.4 million housing units. While year to year housing production varies a lot, on average it produces that number of new units every few months: https://imgur.com/a/gnzUf https://imgur.com/a/gnzUf The report also notes that these units are concentrated in the most expensive neighborhoods anyway. And NYC is only part of a much larger housing regional housing market. It simply strains credulity to think even the upper bound of 13K units has any impact---especially when you consider some of the people occupying such units would have letted or subletted in NYC anyway (the report notes many are long term rentals). Of course, the real action is in zoning. NYC has seen some upzonings, but mainly massive, consistent downzonings over the past few decades. It is funny people worry about about supply when a private firm removes a tiny bit of it, but nonchalant when the government removes lots of it. Construction costs have also soared, and are now sure to get worse thanks to Trump's tariffs on steel, aluminum and canadian timber.
- eric_h 9y ago
  > sure to get worse thanks to Trump's tariffs on steel, aluminum and canadian timber. this[1] suggests that most New York City construction uses US steel and will be minimally affected by Trump's policy. Admittedly, basically all new construction is concrete and steel so it will undoubtedly be affected in some way by changes in the steel market. 1) http://www.crainsnewyork.com/article/20180306/REAL_ESTATE/180309940/steel-tariff-unlikely-to-hurt-nyc-construction http://www.crainsnewyork.com/article/20180306/REAL_ESTATE/18...
spunker540 9y ago
How do you think they calculate Airbnb’s effect on rent in certain neighborhoods? It seems like a hard figure to prove.
dgudkov 9y ago
AirBnb not just hikes rent prices, it hikes real estate prices as well because it is a way to offset mortgage payments. It effectively brings down mortgage interest rate. Have some free money? Get a mortgage and put the property on AirBnb. We know what happens when this type of thinking scales out.
troydavis 9y ago
tl;dr: The underlying product - properties - were actually more useful than was widely recognized. Given new demand, expecting anything other than price increases is unreasonable… but so is treating current prices like they're written in stone. Here's one way to think about Airbnb: prior to Airbnb (and VRBO and…), housing values - both rents and asset prices - didn't incorporate all of the legal and zone-permissible demand for them. Imagine if, until now, the only way to rent an apartment was by pre-paying for a year. Instead of $1,500/month or $2,000/month, every landlord quoted and charged a price per year, like $18,000/year. A company or business model then introduces the idea of only charging by the month (ie, what the US market is now based on) rather than requiring pre-paying for a year. 2 things would happen: 1. Demand would increase (and prices would probably go up), because someone would be serving previously un-met demand. (From the article: "over the last three years, Airbnb has increased long-term rents in the city by 1.4 percent") 2. The customer base would change, since the demographics of those able to come up with 1 month's rent are very different from those who can front 1 year's rent. Some of these newcomers would be non-residents or short-term residents. If this sounds a lot like what Airbnb has done, you see the challenge. There's nothing inherently permanent about current rents or asset prices, nor the current customer base. They're just reflections of the ways that a property can be used at one point in time – and there's nothing special about those ways. People got used to the current demand because the product mix changed so little for so long. Whether that's good, bad, or some of both is a reasonable question, but in any other industry (even with other supply-constrained assets), society almost always considers it good. The underlying product was actually more useful than was widely recognized. (If the yearly vs. monthly rent example sounds outlandish, here's another that's actually happened: 10%-15% mortgage interest rates, as existed for most of the early 1980s. 13% mortgages could change the supply of housing enough to meaningfully impact asset prices and rents, that is, create a new normal price.) I agree with the article's sub-point that this has little or nothing to do with home sharing. The core change is that it's now possible to use an existing product to serve a market that was previously not served well. (Note that I'm ignoring housing where short-term rentals were not legal prior to Airbnb - say, before 2013 - or were legal but not permissible under zoning. While those are important considerations, many or most short-term rental limits were passed in response to Airbnb.)
somberi 9y ago
As an apartment owner in Manhattan, I find one part of the study surprising. Most Co-ops and Condos (two types of apartment financial structuring that is common in NYC), explicitly ban AirBnB rental. The apartment I own, in a fancy part of the city (Upper East Side), penalises the owner $350 for first infraction, and the fines escalate for each subsequent infraction. Most Co-ops even prohibit non-owners living in the building (they cannot rent it out). I wonder who these people are, that are able to buy AirBnB'able apartments. I just searched Streeteasy.com, a popular NYC real estate listing site for Airbnb and I was not able find any listings (Query: https://streeteasy.com/search?utf8=%E2%9C%93&search=airbnb&commit= https://streeteasy.com/search?utf8=%E2%9C%93&search=airbnb&c...). I also looked at the data-source in the Citylab article (Airdna.com) and I see that I would earn 10% more by Airbnb'ing my apartment than finding a tenant. For me this 10% is not worth optimising for, considering the tenants go through a credit evaluation process, I don't risk any vacancy and I do not have to change the sheets every other week.
- bradleyjg 9y ago
  Why would you think people willing to violate state law would have any scruples about violating a propriety lease or condo agreement?
  - ng12 9y ago
    You do not want to mess with a co-op board in NYC. You'll have neighbors who will rat you out whenever they can, the doormen/supers will be on the lookout for sketchy behavior, and the board will be draconian in it's enforcement. It sounds silly but people take co-op rules very seriously.
  - srtjstjsj 9y ago
    Because state law enforcement is weak but it's easy for neighbors to rat you out to management
gpickett00 9y ago
The article should have mentioned this at the very top: "It’s also worth noting that Wachsmuth’s research was funded in part by some avowed foes of home sharing—the New York City Hotel Trades Council—and was cosponsored by housing and tenant advocacy organizations."
- RestlessMind 9y ago
  You need big money to fight big money. So as long as they are not lying, I am fine with it. If they are lying (or even "selectively telling the truth"), AirBnB should fund research to expose them.
camgunz 9y ago
My take, after living in NYC Airbnbs for around a year, is the effects are most dramatic in non-white areas. And it's not lower income people who are renting their place out on Airbnb; it's typically commercial renters and hipsters/professionals looking to supplement their income. So it certainly feels like the main effect is to accelerate gentrification.
- throwaway_80bf3 9y ago
  After living there for 10 years I moved on from NYC at the end of last year. My last apartment was in a neighborhood in Brooklyn that is still heavily African American but will probably look significantly different in 5 year. The number of European tourists that just show up and come and go on the subway platform there was wild. I have lived in post-gentrification neighborhoods mostly and had not seen anything like this. The only reasonable explanation was AirBnB.
snarfybarfy 9y ago
Slightly of topic, but I always find it funny/sad that all over the world: Driving a car you (and also partially others not owning a car) indirectly pay non market land cost, construction and maintenance costs. Whereas getting a roof over your head requires directly paying market rates for land, construction and maintenance costs PLUS profit on capital. In my opinion having a roof over your head is a more fundamental human right than driving around in an vehicle. But obviously those two are related as those unable to afford market rents/house prices have to live in the boondocks and then are forced to use a car.

179 points by pmcpinto 9y ago

Manhattan should probably just admit that it's going to become the Venice of America: a playground for tourists and the ultra-rich, with virtually no residents. There's nothing wrong with that. They can tax the hell out of it and use it to fund services in the rest of the city where real people live.

aluhut 9y ago
...moving "the rest of the city" further out step by step.
CPLX 9y ago
> virtually no residents Seeing as how there are 1.6 million of those now that would be quite a turn of events.
- ForHackernews 9y ago
  I didn't say it would happen overnight. That real estate is apparently more valuable as hotels and vacant investment properties than it is as housing stock. New York should embrace and exploit the fact that billionaires will pay high property taxes on empty condos, not try to fight it.
  - del82 9y ago
    Alas, the billionaires pay almost no property taxes on those condos: https://www.citylab.com/equity/2015/05/why-billionaires-dont-pay-property-taxes-in-new-york/389886/ https://www.citylab.com/equity/2015/05/why-billionaires-dont...
  - ryanwaggoner 9y ago
    In 2011 there were 34000 homes in Manhattan that were absentee owned or rented. That's a lot, but not in comparison with the size of the city. Also, the population in Manhattan has been going up since 1980, so it can simultaneously be true that there are more people living here and more vacant investment properties and hotel rooms. I doubt we're in any danger of Manhattan emptying out in the next few hundred years from anything other than a nuclear attack or climate change.
ironjunkie 9y ago
Kind of agree with you. Don't even think living in Manhattan if you don't pull at least 150k$. (Or be ready for some of those roomshare situations). I'm also amazed by the average night price at Manhattan hotels. Even during normal weeks, the cheapest is well above 300$/night.
- louisswiss 9y ago
  Hotel Tonight app has 10+ hotels for under $160/night (for tonight) - that's with just a casual scroll...
  - ghaff 9y ago
    And add about 25% in taxes to that. Plus I can assure you that barring unusual circumstances cheap hotels (and $200 isn't exactly "cheap" in my book) in Manhattan are probably best avoided. Mind you, in my experience as a business traveler, hotel prices in San Francisco are often higher than Manhattan in any case.
    - ryanwaggoner 9y ago
      I just stayed in a Fairfield Inn & Suites on 58th last month for 4 nights (including Friday / Saturday) at $590 total ($147.50 per night). It wasn't luxury by any means, but it was perfectly nice. Also, the taxes were $90 of that, so 15%, not 25%.
      - ghaff 9y ago
        Fair enough. This is probably sort of an off-season (to the degree there is such a thing) for Manhattan and I tend to stay in somewhat more expensive hotels. (And there are a lot of real fleabags at the lower end but I wouldn't expect a Marriott brand to be one.) Of course it varies depending upon what's going on in a given week, but I find it's harder to get a "deal" in SF, among other cities.
        louisswiss 9y ago
chasing 9y ago
Have you spent any time in Manhattan? It’s more than just Midtown. And the whole idea is smart growth that keeps cities accessible to everyone. So, no, it shouldn’t be left to become a “Venice for the super rich” or whatever.
- ForHackernews 9y ago
  > So, no, it shouldn’t be left to become a “Venice for the super rich” or whatever. Why not? Because you like living there?

ordinaryperson 9y ago

Easy to blame lack of affordable housing on AirBnB and not, say, rent control laws or the difficulty of building new housing stock in the city. I get not throwing grandma out of the $250/month 4BR she’s been living in for 50 years, but it means something like 200,000 rent-controlled/rent-stabilized units are also raising everyone else’s rent by decreasing inventory. The endless red tape in new construction makes non-luxury bulidings unprofitable. Want cheaper rents? Fast-track approval for new apt buildings.

teh_klev 9y ago
I've said this before, and I'll say it again. AirBNB is a blight on rural areas (I can speak to this because I reside in rural Scotland) where affordable rental properties are simply disappearing from the market. These properties are barely fully booked during the summer months or holiday/peak seasons, and are empty for weeks at a time in the winter and off-seasons. This is such a waste and hugely frustrating for folks who live and work in these communities trying to find accomodation.
- humanrebar 9y ago
  I want to point out that expensive rent in a rural area is different than expensive rent in an urban one. In a rural area, if it really comes down to it, people buy or rent a plot of land and throw a prefab home or trailer on it. In an urban area, you don't have a lot of options when rent goes up other than moving to a dangerous neighborhood or commuting from an inhumane distance.
  - teh_klev 9y ago
    > expensive rent in a rural area is different than expensive rent in an urban one I fail to see the difference, maybe you could expand? > In a rural area, if it really comes down to it, people buy Folks are seeking affordable rents because affordable (and habitable) property to buy is pretty much non-existent. > or rent a plot of land and throw a prefab home or trailer on it. Perhaps in your country, good luck with getting away with that in the UK. We've got some fairly strict planning rules that make that kinda thing more or less impossible. Also "renting a plot of land" for this type of use isn't really a thing here.

personlurking 9y ago

If anyone is interested, I recommend the nearly 18-hr PBS documentary on New York City [1], especially the latter parts (6 & 7) which focus on the building boom and the obsessions of Robert Moses [2]. Part 7 in particular (57 min) https://www.youtube.com/watch?v=GaLSRTNT5fw https://www.youtube.com/watch?v=GaLSRTNT5fw https://en.wikipedia.org/wiki/New_York:_A_Documentary_Film https://en.wikipedia.org/wiki/New_York:_A_Documentary_Film https://en.wikipedia.org/wiki/Robert_Moses https://en.wikipedia.org/wiki/Robert_Moses

theklub 9y ago
Haven't seen this yet, thank you.
Sangermaine 9y ago
Thank you for the link!
piffey 9y ago
"The Power Broker" is also a great read if you want to know more about Robert Moses.

peg_leg 9y ago

Air BnB is terrible for smaller, more touristy towns as well, like Traverse City, MI where housing prices and rents have skyrocketed. Used to be able to rent a granny flat as a service worker...those are all Air BnB'd now.

bluedino 9y ago
Which is funny - they shut down people on VRBO all the time who tried to rent their cabins out
berbec 9y ago
They stop fixing anything and offer the tenant tens of thousands of dollars to move out.
- brooklyn_ashey 9y ago
  Actually, they have stopped offering tenants money to move out unless they get a crop of tenants who know their rights and have some kind of leverage to enforce them (these are usually more affluent tenants who hung onto stabilized lease who band together). Instead, they silently declare war on existing tenants by demolishing their homes while they live in them. Then, tenants who understand this to be classic slum lord harassment begin the assembly of an endless paper trail to get them to pay them to leave. By the time tenants get landlords to pay, the money offered is a piddling sum which covers only property damage and health care costs of tenants they have made sick or injured with dangerous, dust-filled construction air, and falling bricks from their ceilings. They break tenants down until the tenant will take a few thousand bucks just to get to leave and not be charged for the remaining months on their leases. I know this because these practices swept my and my friends' Brooklyn neighborhoods absolutely clean of long-term renters beginning about seven years ago. Another key development signaling that this problem is rampant is the fact that De Blasio has instituted a new initiative to punish landlords for harassing tenants in this and other ways because it had become such an epidemic. Unfortunately, the problem is so widespread that only the absolute worst of the worst are punished for treating tenants like this. But treating tenants like this at every level of the NYC market is really just part of the codified MDL landlord playbook in NYC. It isn't just for slum lords anymore. Market rate rental tenants are harassed, asked to provide 6 months' security (often not returned) and the landlords make no repairs until they are taken to court. This used to be the domain of the slum lords and a few ultra-shady landlords. These days, you can't pay for a rental unit and a landlord who offers a product you signed-up to pay for. (this basically applies to landlords under the MDL, not rich people who rent out a floor of their brownstone- they are not "career landlords") As a tenant, you need to keep filing HP actions in Housing Court in order to get basic services like heat and hot water, even in so-called "luxury" buildings. In this climate of unaffordable "luxury" rentals that are run like slums by the landlords (but look "nice" to a casual observer) a tenant's only option in many cases is to find a way to double up with a friend or to leave the city and Airbnb when they can. The tenant protection laws that are constantly trumpeted are only as good as the mechanism to enforce them, and while the city pays lip service to the idea of protecting tenants from harassment, injury, or swindle, their interest is really with the landlord. Housing court doesn't offer solutions to major tenant problems beyond what is listed in "The Warranty of Habitability". If a tenant wants the parking space they paid for so they can have a car to get to work while they live out in the boonies 1.5 hour commute on congested and failing public transport, they will have to put down a $20,000 retainer to have that case tried in Supreme Court. Housing court doesn't handle such matters. edited to: make a distinction between landlords who own large buildings and the wealthy folks who make extra money by renting out an unused floor of their brownstone. I'm speaking about the former here.

techservative 9y ago

AirBNB and Uber are the least racist companies on the face of the earth. No other companies on earth have opened up the avenues for direct social interactions across race and class lines the way these two companies have. Before Uber and AirBNB, how many opportuinities could you name for white Americans to do the following: 1. Get in a car with a black person for an hour and have a conversation about the election 2. Go into a racially diverse neighborhood and have a black family open their home to you and spend the weekend together 3. Have a black person come and rent a room in your own home and stay with your family for a weekend 4. Allow people of color who own property in predominantly black communities to profit from their own home The only ones who benefit from these hit pieces on AirBNB are hotel groups who want to regulate these arrangements out of existence and drive up costs for hotels. Who do you think is harmed the most when hotel prices rise? It is the same people of color (and everyone else), who have to pay more to stay downtown in major metropolitan cities. Any study of AirBNB that does not take into consideration social mobility and prices of affordable overnight rentals is a BS study, they are comparing bananas to coconuts. Yet we only see half of the story told in the media. Why is that? It’s almkst as though the authors of these studies have a distinct agenda. How are the effects any less racist than the rising home prices, which could easily be explained by...uh...the massive stock market rally we just had? Where are the studies about how people of color who own the buildings and units being rented out in ethnically black neighborhoods can now afford to send their children to college? Reading the comments here: Too many people ask too few questions and have too little understanding about the free market. Freedom of personal property is GOOD for Black People. It is the ONLY way black people improve their situation.

nugi 9y ago
All 4 happened with regularity before uber. Are you literally 12? And how did mentioning that minorities were disproportionately affected become calling either company racist? The only racisim i see is buried in the assumptions made in your comment.
- visarga 9y ago
  I think the grandparent poster was right - AirBnb opens up a way for people to see life in communities that were difficult to access before. That's what I appreciate most about it - how natural it feels to live like a local person. Living in a hotel while travelling feels artificial now.

lewis500 9y ago

This is not quite Pareto distributed but it's getting there: "half of all Airbnb rentals that are conducted by only 10 percent of hosts, who earned a full 48 percent of all the revenue earned in the city last year. That’s some 5,000-people earning a combined $318 million. In contrast, the bottom 80 percent of New York’s hosts—the city’s 40,400 true home sharers—earned just 32 percent of all revenue, or $209 million, in 2017." While I like the exploration of facts like this, I don't really believe AirBnB is important to rents in New York City. In spatial statistics it is difficult to really prove anything rigorously, and this study doesn't even try to go the distance. "Applying Barron et al.’s national average ratio of exogeneity to New York City, this implies that, city-wide, Airbnb drove up rents by 0.8% in 2015, 0.4% in 2016, and 0.2% in 2017 (all for years ending in August). This is a cumulative 1.4% increase in rents over these three years attributable to Airbnb’s presence in the city." So while it might seem like the study looked statistically at AirBnB's impact on NYC, in fact it did not. They just used a sort of rough rule-of-thumb from a national average. But the rule-of-thumb is useless in particular cities (suppose a city had one unit on AirBnB; would adding one more increase rents?), and isn't even from published work. The authors of this study are not economists or econometricians, and it isn't peer-reviewed and never will be. Moreoever, you can use common sense: "Airbnb has removed between" (Dr. Evil voice) "7,000 and 13,500 units." New York City has 3.4 million housing units. While year to year housing production varies a lot, on average it produces that number of new units every few months: https://imgur.com/a/gnzUf https://imgur.com/a/gnzUf The report also notes that these units are concentrated in the most expensive neighborhoods anyway. And NYC is only part of a much larger housing regional housing market. It simply strains credulity to think even the upper bound of 13K units has any impact---especially when you consider some of the people occupying such units would have letted or subletted in NYC anyway (the report notes many are long term rentals). Of course, the real action is in zoning. NYC has seen some upzonings, but mainly massive, consistent downzonings over the past few decades. It is funny people worry about about supply when a private firm removes a tiny bit of it, but nonchalant when the government removes lots of it. Construction costs have also soared, and are now sure to get worse thanks to Trump's tariffs on steel, aluminum and canadian timber.

eric_h 9y ago
> sure to get worse thanks to Trump's tariffs on steel, aluminum and canadian timber. this[1] suggests that most New York City construction uses US steel and will be minimally affected by Trump's policy. Admittedly, basically all new construction is concrete and steel so it will undoubtedly be affected in some way by changes in the steel market. 1) http://www.crainsnewyork.com/article/20180306/REAL_ESTATE/180309940/steel-tariff-unlikely-to-hurt-nyc-construction http://www.crainsnewyork.com/article/20180306/REAL_ESTATE/18...

spunker540 9y ago

How do you think they calculate Airbnb’s effect on rent in certain neighborhoods? It seems like a hard figure to prove.

dgudkov 9y ago

AirBnb not just hikes rent prices, it hikes real estate prices as well because it is a way to offset mortgage payments. It effectively brings down mortgage interest rate. Have some free money? Get a mortgage and put the property on AirBnb. We know what happens when this type of thinking scales out.

troydavis 9y ago

tl;dr: The underlying product - properties - were actually more useful than was widely recognized. Given new demand, expecting anything other than price increases is unreasonable… but so is treating current prices like they're written in stone. Here's one way to think about Airbnb: prior to Airbnb (and VRBO and…), housing values - both rents and asset prices - didn't incorporate all of the legal and zone-permissible demand for them. Imagine if, until now, the only way to rent an apartment was by pre-paying for a year. Instead of $1,500/month or $2,000/month, every landlord quoted and charged a price per year, like $18,000/year. A company or business model then introduces the idea of only charging by the month (ie, what the US market is now based on) rather than requiring pre-paying for a year. 2 things would happen: 1. Demand would increase (and prices would probably go up), because someone would be serving previously un-met demand. (From the article: "over the last three years, Airbnb has increased long-term rents in the city by 1.4 percent") 2. The customer base would change, since the demographics of those able to come up with 1 month's rent are very different from those who can front 1 year's rent. Some of these newcomers would be non-residents or short-term residents. If this sounds a lot like what Airbnb has done, you see the challenge. There's nothing inherently permanent about current rents or asset prices, nor the current customer base. They're just reflections of the ways that a property can be used at one point in time – and there's nothing special about those ways. People got used to the current demand because the product mix changed so little for so long. Whether that's good, bad, or some of both is a reasonable question, but in any other industry (even with other supply-constrained assets), society almost always considers it good. The underlying product was actually more useful than was widely recognized. (If the yearly vs. monthly rent example sounds outlandish, here's another that's actually happened: 10%-15% mortgage interest rates, as existed for most of the early 1980s. 13% mortgages could change the supply of housing enough to meaningfully impact asset prices and rents, that is, create a new normal price.) I agree with the article's sub-point that this has little or nothing to do with home sharing. The core change is that it's now possible to use an existing product to serve a market that was previously not served well. (Note that I'm ignoring housing where short-term rentals were not legal prior to Airbnb - say, before 2013 - or were legal but not permissible under zoning. While those are important considerations, many or most short-term rental limits were passed in response to Airbnb.)

somberi 9y ago

As an apartment owner in Manhattan, I find one part of the study surprising. Most Co-ops and Condos (two types of apartment financial structuring that is common in NYC), explicitly ban AirBnB rental. The apartment I own, in a fancy part of the city (Upper East Side), penalises the owner $350 for first infraction, and the fines escalate for each subsequent infraction. Most Co-ops even prohibit non-owners living in the building (they cannot rent it out). I wonder who these people are, that are able to buy AirBnB'able apartments. I just searched Streeteasy.com, a popular NYC real estate listing site for Airbnb and I was not able find any listings (Query: https://streeteasy.com/search?utf8=%E2%9C%93&search=airbnb&commit= https://streeteasy.com/search?utf8=%E2%9C%93&search=airbnb&c...). I also looked at the data-source in the Citylab article (Airdna.com) and I see that I would earn 10% more by Airbnb'ing my apartment than finding a tenant. For me this 10% is not worth optimising for, considering the tenants go through a credit evaluation process, I don't risk any vacancy and I do not have to change the sheets every other week.

bradleyjg 9y ago
Why would you think people willing to violate state law would have any scruples about violating a propriety lease or condo agreement?
- ng12 9y ago
  You do not want to mess with a co-op board in NYC. You'll have neighbors who will rat you out whenever they can, the doormen/supers will be on the lookout for sketchy behavior, and the board will be draconian in it's enforcement. It sounds silly but people take co-op rules very seriously.
- srtjstjsj 9y ago
  Because state law enforcement is weak but it's easy for neighbors to rat you out to management

gpickett00 9y ago

The article should have mentioned this at the very top: "It’s also worth noting that Wachsmuth’s research was funded in part by some avowed foes of home sharing—the New York City Hotel Trades Council—and was cosponsored by housing and tenant advocacy organizations."

RestlessMind 9y ago
You need big money to fight big money. So as long as they are not lying, I am fine with it. If they are lying (or even "selectively telling the truth"), AirBnB should fund research to expose them.

camgunz 9y ago

My take, after living in NYC Airbnbs for around a year, is the effects are most dramatic in non-white areas. And it's not lower income people who are renting their place out on Airbnb; it's typically commercial renters and hipsters/professionals looking to supplement their income. So it certainly feels like the main effect is to accelerate gentrification.

throwaway_80bf3 9y ago
After living there for 10 years I moved on from NYC at the end of last year. My last apartment was in a neighborhood in Brooklyn that is still heavily African American but will probably look significantly different in 5 year. The number of European tourists that just show up and come and go on the subway platform there was wild. I have lived in post-gentrification neighborhoods mostly and had not seen anything like this. The only reasonable explanation was AirBnB.

snarfybarfy 9y ago

Slightly of topic, but I always find it funny/sad that all over the world: Driving a car you (and also partially others not owning a car) indirectly pay non market land cost, construction and maintenance costs. Whereas getting a roof over your head requires directly paying market rates for land, construction and maintenance costs PLUS profit on capital. In my opinion having a roof over your head is a more fundamental human right than driving around in an vehicle. But obviously those two are related as those unable to afford market rents/house prices have to live in the boondocks and then are forced to use a car.