6 ms·

NYC banned Airbnbs to make housing cheaper, but only made hotels more expensive

48 points by josephcsible 2y ago

solardev 2y ago
Well, ok, hotels are more expensive now, but are houses and long term rentals any cheaper? Was the ban successful at improving housing affordability for the people who live there? The article doesn't seem to discuss that at all.
- ranger_danger 2y ago
  I think you already know the answers to all of those.
  - AnimalMuppet 2y ago
    I think you suspect the answers to all of those. We'd like to know.
  - solardev 2y ago
    What? Why would I? I don't live there but genuinely want to know. It's a thing that affects many other desirable cities too, and short term housing bans are discussed often. I'd like to know how well it does or doesn't work and what variables contribute to it.
    - auntienomen 2y ago
      The problem is that no one has the courage to run a controlled trial to isolate the effect of banning short term rentals. Best you'll get is some natural experiments where you pretend you can compare NYC and Hoboken.
- powersjcb 2y ago
  They certainly made it impossible to plan a trip to NYC with more than 2 people if that's what they were aiming for. I had previously been planning yearly trips to visit NYC with friends. For the last 3 years with Airbnb and I was booking 2-4 bedroom places for between 3-6 people. The cost per person per night jumped from ~$75-150 to $150-250 depending on the week. :-O
  - amelius 2y ago
    That was not the question.
  - toastercat 2y ago
    That sounds more expensive, but not impossible. Frankly, that's how much I used to pay for a room in Manhattan before AirBnB existed. I chalked it up as the reality of booking in the most populated city in the world. Have you tried Queens or Brooklyn?
    - piva00 2y ago
      > I chalked it up as the reality of booking in the most populated city in the world. Sorry for being pedantic but I believe this isn't really true. New York ranks 11th in the world [0], it's not even the most populated in the Americas, nor 2nd. [0] https://en.wikipedia.org/wiki/List_of_largest_cities https://en.wikipedia.org/wiki/List_of_largest_cities
      - Yawrehto 2y ago
        More pedantry: Population density would make more sense in this context, but it's also not true. It's the most densely populated major city in the US, but that's definitely not the world. Per the same article, by city limits NYC is #18 out of 81, by urban area it's #74, and by metropolitan area it's #19. Densely populated, but it's no Mumbai - which, no matter how you measure it, eclipses NYC in both population and population density.
      - toastercat 2y ago
        Woops! I messed up.
    - powersjcb 2y ago
      I've only ever booked the Airbnbs in Brooklyn before. (We usually try to visit friends in Williamsburg/Greenpoint/Bushwick) Hotels in those neighborhoods are easily $300-500 per night for a queen bed on a weekend. The alternative of midtown/queens hotels are typically still $200-300, but cost more in travel time/expense. My gripe here is mainly that before I could plan an outing for group and we could all live in the space and have common areas for eating/relaxing. Even if hotels were the same price, they still are a worse experience than staying in a house/apartment with friends.
- b112 2y ago
  It does, both in the title here, and in the article's title. "Only" is clear, and "All that's done so far is make hotels more expensive" from the article title, is also exceptionally clear.
  - solardev 2y ago
    I don't think this is the strength of evidence you seem to think it is. I would like to see some actual data and analysis, not just a throwaway clickbait headline.
    - b112 2y ago
      At no point did I say it was evidence. I did say the article spoke to it. Something the post I directly replied to showed confusion about.
  - fny 2y ago
    The article’s premise is flawed. Banning Airbnbs obviously won’t reduce housing costs; rather, it aims to prevent even further price increases. One study confirms this link[0], but it’s unclear whether the effect size is meaningful. [0]: https://marketing.wharton.upenn.edu/wp-content/uploads/2019/08/09.05.2019-Proserpio-Davide-Paper.pdf https://marketing.wharton.upenn.edu/wp-content/uploads/2019/...
    - solardev 2y ago
      Thank you!
    - chermi 2y ago
      Why is it obvious getting rid of Airbnb won't reduce housing costs? All else being equal, it could increase supply if the hosts are holding on to them only for renting. Increase supply = reduce cost, no? Edit, and by cheaper, I mean less than they would be otherwise. Maybe that's the confusion I'm having.
  - morsch 2y ago
    Strictly speaking, the word "only" isn't in the original title (it was editorialized to fit the character limit). And the article barely discusses the effect on housing costs, this is the one paragraph devoted to it and it comes down to "further research needed": But Airbnb and other critics say the near-ban won't do much to address the housing crisis and will hurt homeowners who relied on the rental income and visitors who couldn't afford sky-high hotel costs. There is a slew of factors — including new housing construction and migration patterns — that impact housing costs and vacancy rates. But there's some evidence, including from Irvine, California, that restricting short-term rentals can reduce rents. It's not clear how much of a role LL18 has played so far in changing these conditions.
- darth_avocado 2y ago
  I would also like to know the impact on the quality of housing left in the city. Short term rentals like Airbnb incentivize owners to update their properties. Long term rentals combined with rent control laws do the opposite.
- majormajor 2y ago
  > are houses and long term rentals any cheaper You'd need to do more math than that: has the rate of change in prices of those things decreased? It could be more 10% more expensive but previously would've gotten 15% more expensive, for instance. And of course even that is trivializing it: there have been outside factors that would also affect the baseline trend in the price of housing for the last 5-10 years, so it could be tough to measure against it. The authors of the article don't really try: "it's not clear whether the near-ban is achieving one of its central goals: relieving pressure on the city's severe housing shortage."
- tharmas 2y ago
  It just slows the price rise down. AirBnB is located in SF is it not? So so some of the profits flow from NYC to SF. I get it that hotels too are not Head quartered in NYC so profits leave the city too. But why support housing for financial gain?
api 2y ago
Only building more housing will make housing cheaper. It's remarkable how some cities will do literally anything but that, probably because they know it will work and they're controlled by property owners.
- mtts 2y ago
  True, but while they're not building more housing at least in this case they're making it so the people who do have a house to live in don't have to contend with it being surrounded by hotels.
- chasebank 2y ago
  That's not true. You can heavily tax single family homes that are not owner occupied, for instance. This debate ends in the same way as always. It's a bit of everything. Nightly rentals, REITs, build more, yada yada yada...
  - _yb2s 2y ago
    That would make buying houses cheaper, but would probably make housing in general more expensive- and less accessible to people that can’t get or afford a home loan. Ultimately if there is too much demand, nothing but more supply will make housing affordable.
    - rickydroll 2y ago
      More housing only slows the rate of housing inflation. Making housing affordable means raising wages or subsidizing rent so that worker rental costs 1/3 of their wages. "Affordable" housing is not a magic number; it's a ratio as defined by financial "experts." It's usually one-third of your net or gross income, depending on the advisor you talk to.
      - _yb2s 2y ago
        Supply and demand is the main factor that affects the price of anything. No amount of subsidies, wage changes, etc. will have any effect on a physical problem of having not enough houses for the population in an area. If you subsidize rent or raise wages that will further increase demand and make prices go even higher. Think of an extreme example- take a town with 20k families and only 10k houses. Now setup some program where many of those houses are part of an affordable housing program with a price cap. This changes basically nothing because only a few lucky people will get them, the rest will still be unhoused or move. This is literally the exact situation in most small USA west coast college towns like Davis- where the city government will do anything to make housing more affordable except construction- and we can see that none of it works. I was using the standard English language definition of the word affordable, which is qualitative and has no specific quantitative definition.
WillPostForFood 2y ago
At the same time, > 100 hotels are being used as migrant shelters, so supply is down, at the same time demand is up because the Airbnbs are gone. https://www.nytimes.com/2024/05/25/nyregion/hotels-prices-migrants-nyc.html https://www.nytimes.com/2024/05/25/nyregion/hotels-prices-mi...
- anotherhue 2y ago
  This feels like the real answer. And profiteering of course.
  - snapplebobapple 2y ago
    It's more like both airbnb and migrant sheltering move prices in the direction one would expect but they are so small as to be rounding errors in effect since there's around 8 million housing units in the city vs maybe 40k airbnb listings. The real story is people want to live in NYC and NYC is doing a combination of underbuilding due to bad city regulation slowing redevelopment processes down and causing rental units to sit empty because of foolish city regulation around rent stabilization making it more profitable to just sit on an empty unit than to spend money on repairs and rent at the stabilized price (also the city is utterly failing to maintaining their almost half a million units of low cost housing). So instead of fixing the problem (getting rid of rent stabilization on units that are sitting empty if they are renovated to code to unlock the 10-20k units sitting vacant for this reason, repairing their low cost units, getting out of the way to bring the embarassingly low ~30k units built annually to a multiple of that) They screw over airbnb's to hurt tourism and maybe slow rent appreciation for a quarter or two.
rdtsc 2y ago
Brought to you by: > Axel Springer, Insider Inc.'s parent company, is an investor in Airbnb. Won't anyone think of the poor AirBnB investors!?
gosub100 2y ago
Great now make Uber buy medallions for the (effective) number of vehicles that provide the service based on hours in service.
janalsncm 2y ago
> it's not clear whether the near-ban is achieving one of its central goals: relieving pressure on the city's severe housing shortage Shame on Business Insider for running a headline that contradicts the article. And shame on the authors for not even investigating the issue at all. You can pretty easily check the effect simply by comparing the change in rental prices in NYC to those in places that didn’t ban Airbnb. Maybe Boston, a nearby city.
Giorgi 2y ago
That's because regulations do not work, socialism does not work, communism does not work, how many times should these mistakes be made? Only working policy is a free market, competition and full deregulation.
- paulryanrogers 2y ago
  > Only working policy is a free market, competition and full deregulation. This just hands control from an elected government over to whomever has the most money.
  - Giorgi 2y ago
    Which is always the case.
- Slyfox33 2y ago
  "Full deregulation" is how you get companies putting sawdust in your bread to save an extra penny. Completely ridiculous.
  - Giorgi 2y ago
    Complete BS.
pyrophane 2y ago
Another thing that has happened is that there are a lot of hotels are operating as migration shelters. I've heard something like 15% of hotel rooms aren't on the market for that reason, and those rooms would have skewed toward the more affordable end of the spectrum. Also, regarding rents not going down. According to the MNS report for Manhattan [1], non-doorman studios are down ~1.2% from last year, and non-doorman one-bedrooms are up only ~.6%. Those are exactly the types of units that were commonly being set up as full-time Airbnbs. Also, Airbnbs were especially concentrated in neighborhoods that did see large drops in rents, like EV and Soho, so maybe it did have an impact. 1. https://www.mns.com/manhattan_rental_market_report https://www.mns.com/manhattan_rental_market_report
altairprime 2y ago
I would imagine the rent cartel folks had a block in place to keep NYC rents from dropping when all the Airbnbs eventually hit the market, and I bet NYC is collecting evidence from rents following this event to use against them.

48 points by josephcsible 2y ago

Well, ok, hotels are more expensive now, but are houses and long term rentals any cheaper? Was the ban successful at improving housing affordability for the people who live there? The article doesn't seem to discuss that at all.

ranger_danger 2y ago
I think you already know the answers to all of those.
- AnimalMuppet 2y ago
  I think you suspect the answers to all of those. We'd like to know.
- solardev 2y ago
  What? Why would I? I don't live there but genuinely want to know. It's a thing that affects many other desirable cities too, and short term housing bans are discussed often. I'd like to know how well it does or doesn't work and what variables contribute to it.
  - auntienomen 2y ago
    The problem is that no one has the courage to run a controlled trial to isolate the effect of banning short term rentals. Best you'll get is some natural experiments where you pretend you can compare NYC and Hoboken.
powersjcb 2y ago
They certainly made it impossible to plan a trip to NYC with more than 2 people if that's what they were aiming for. I had previously been planning yearly trips to visit NYC with friends. For the last 3 years with Airbnb and I was booking 2-4 bedroom places for between 3-6 people. The cost per person per night jumped from ~$75-150 to $150-250 depending on the week. :-O
- amelius 2y ago
  That was not the question.
- toastercat 2y ago
  That sounds more expensive, but not impossible. Frankly, that's how much I used to pay for a room in Manhattan before AirBnB existed. I chalked it up as the reality of booking in the most populated city in the world. Have you tried Queens or Brooklyn?
  - piva00 2y ago
    > I chalked it up as the reality of booking in the most populated city in the world. Sorry for being pedantic but I believe this isn't really true. New York ranks 11th in the world [0], it's not even the most populated in the Americas, nor 2nd. [0] https://en.wikipedia.org/wiki/List_of_largest_cities https://en.wikipedia.org/wiki/List_of_largest_cities
    - Yawrehto 2y ago
      More pedantry: Population density would make more sense in this context, but it's also not true. It's the most densely populated major city in the US, but that's definitely not the world. Per the same article, by city limits NYC is #18 out of 81, by urban area it's #74, and by metropolitan area it's #19. Densely populated, but it's no Mumbai - which, no matter how you measure it, eclipses NYC in both population and population density.
    - toastercat 2y ago
      Woops! I messed up.
  - powersjcb 2y ago
    I've only ever booked the Airbnbs in Brooklyn before. (We usually try to visit friends in Williamsburg/Greenpoint/Bushwick) Hotels in those neighborhoods are easily $300-500 per night for a queen bed on a weekend. The alternative of midtown/queens hotels are typically still $200-300, but cost more in travel time/expense. My gripe here is mainly that before I could plan an outing for group and we could all live in the space and have common areas for eating/relaxing. Even if hotels were the same price, they still are a worse experience than staying in a house/apartment with friends.
b112 2y ago
It does, both in the title here, and in the article's title. "Only" is clear, and "All that's done so far is make hotels more expensive" from the article title, is also exceptionally clear.
- solardev 2y ago
  I don't think this is the strength of evidence you seem to think it is. I would like to see some actual data and analysis, not just a throwaway clickbait headline.
  - b112 2y ago
    At no point did I say it was evidence. I did say the article spoke to it. Something the post I directly replied to showed confusion about.
- fny 2y ago
  The article’s premise is flawed. Banning Airbnbs obviously won’t reduce housing costs; rather, it aims to prevent even further price increases. One study confirms this link[0], but it’s unclear whether the effect size is meaningful. [0]: https://marketing.wharton.upenn.edu/wp-content/uploads/2019/08/09.05.2019-Proserpio-Davide-Paper.pdf https://marketing.wharton.upenn.edu/wp-content/uploads/2019/...
  - solardev 2y ago
    Thank you!
  - chermi 2y ago
    Why is it obvious getting rid of Airbnb won't reduce housing costs? All else being equal, it could increase supply if the hosts are holding on to them only for renting. Increase supply = reduce cost, no? Edit, and by cheaper, I mean less than they would be otherwise. Maybe that's the confusion I'm having.
- morsch 2y ago
  Strictly speaking, the word "only" isn't in the original title (it was editorialized to fit the character limit). And the article barely discusses the effect on housing costs, this is the one paragraph devoted to it and it comes down to "further research needed": But Airbnb and other critics say the near-ban won't do much to address the housing crisis and will hurt homeowners who relied on the rental income and visitors who couldn't afford sky-high hotel costs. There is a slew of factors — including new housing construction and migration patterns — that impact housing costs and vacancy rates. But there's some evidence, including from Irvine, California, that restricting short-term rentals can reduce rents. It's not clear how much of a role LL18 has played so far in changing these conditions.
darth_avocado 2y ago
I would also like to know the impact on the quality of housing left in the city. Short term rentals like Airbnb incentivize owners to update their properties. Long term rentals combined with rent control laws do the opposite.
majormajor 2y ago
> are houses and long term rentals any cheaper You'd need to do more math than that: has the rate of change in prices of those things decreased? It could be more 10% more expensive but previously would've gotten 15% more expensive, for instance. And of course even that is trivializing it: there have been outside factors that would also affect the baseline trend in the price of housing for the last 5-10 years, so it could be tough to measure against it. The authors of the article don't really try: "it's not clear whether the near-ban is achieving one of its central goals: relieving pressure on the city's severe housing shortage."
tharmas 2y ago
It just slows the price rise down. AirBnB is located in SF is it not? So so some of the profits flow from NYC to SF. I get it that hotels too are not Head quartered in NYC so profits leave the city too. But why support housing for financial gain?

api 2y ago

Only building more housing will make housing cheaper. It's remarkable how some cities will do literally anything but that, probably because they know it will work and they're controlled by property owners.

mtts 2y ago
True, but while they're not building more housing at least in this case they're making it so the people who do have a house to live in don't have to contend with it being surrounded by hotels.
chasebank 2y ago
That's not true. You can heavily tax single family homes that are not owner occupied, for instance. This debate ends in the same way as always. It's a bit of everything. Nightly rentals, REITs, build more, yada yada yada...
- _yb2s 2y ago
  That would make buying houses cheaper, but would probably make housing in general more expensive- and less accessible to people that can’t get or afford a home loan. Ultimately if there is too much demand, nothing but more supply will make housing affordable.
  - rickydroll 2y ago
    More housing only slows the rate of housing inflation. Making housing affordable means raising wages or subsidizing rent so that worker rental costs 1/3 of their wages. "Affordable" housing is not a magic number; it's a ratio as defined by financial "experts." It's usually one-third of your net or gross income, depending on the advisor you talk to.
    - _yb2s 2y ago
      Supply and demand is the main factor that affects the price of anything. No amount of subsidies, wage changes, etc. will have any effect on a physical problem of having not enough houses for the population in an area. If you subsidize rent or raise wages that will further increase demand and make prices go even higher. Think of an extreme example- take a town with 20k families and only 10k houses. Now setup some program where many of those houses are part of an affordable housing program with a price cap. This changes basically nothing because only a few lucky people will get them, the rest will still be unhoused or move. This is literally the exact situation in most small USA west coast college towns like Davis- where the city government will do anything to make housing more affordable except construction- and we can see that none of it works. I was using the standard English language definition of the word affordable, which is qualitative and has no specific quantitative definition.

WillPostForFood 2y ago

At the same time, > 100 hotels are being used as migrant shelters, so supply is down, at the same time demand is up because the Airbnbs are gone. https://www.nytimes.com/2024/05/25/nyregion/hotels-prices-migrants-nyc.html https://www.nytimes.com/2024/05/25/nyregion/hotels-prices-mi...

anotherhue 2y ago
This feels like the real answer. And profiteering of course.
- snapplebobapple 2y ago
  It's more like both airbnb and migrant sheltering move prices in the direction one would expect but they are so small as to be rounding errors in effect since there's around 8 million housing units in the city vs maybe 40k airbnb listings. The real story is people want to live in NYC and NYC is doing a combination of underbuilding due to bad city regulation slowing redevelopment processes down and causing rental units to sit empty because of foolish city regulation around rent stabilization making it more profitable to just sit on an empty unit than to spend money on repairs and rent at the stabilized price (also the city is utterly failing to maintaining their almost half a million units of low cost housing). So instead of fixing the problem (getting rid of rent stabilization on units that are sitting empty if they are renovated to code to unlock the 10-20k units sitting vacant for this reason, repairing their low cost units, getting out of the way to bring the embarassingly low ~30k units built annually to a multiple of that) They screw over airbnb's to hurt tourism and maybe slow rent appreciation for a quarter or two.

rdtsc 2y ago

Brought to you by: > Axel Springer, Insider Inc.'s parent company, is an investor in Airbnb. Won't anyone think of the poor AirBnB investors!?

gosub100 2y ago

Great now make Uber buy medallions for the (effective) number of vehicles that provide the service based on hours in service.

janalsncm 2y ago

> it's not clear whether the near-ban is achieving one of its central goals: relieving pressure on the city's severe housing shortage Shame on Business Insider for running a headline that contradicts the article. And shame on the authors for not even investigating the issue at all. You can pretty easily check the effect simply by comparing the change in rental prices in NYC to those in places that didn’t ban Airbnb. Maybe Boston, a nearby city.

Giorgi 2y ago

That's because regulations do not work, socialism does not work, communism does not work, how many times should these mistakes be made? Only working policy is a free market, competition and full deregulation.

paulryanrogers 2y ago
> Only working policy is a free market, competition and full deregulation. This just hands control from an elected government over to whomever has the most money.
- Giorgi 2y ago
  Which is always the case.
Slyfox33 2y ago
"Full deregulation" is how you get companies putting sawdust in your bread to save an extra penny. Completely ridiculous.
- Giorgi 2y ago
  Complete BS.

pyrophane 2y ago

Another thing that has happened is that there are a lot of hotels are operating as migration shelters. I've heard something like 15% of hotel rooms aren't on the market for that reason, and those rooms would have skewed toward the more affordable end of the spectrum. Also, regarding rents not going down. According to the MNS report for Manhattan [1], non-doorman studios are down ~1.2% from last year, and non-doorman one-bedrooms are up only ~.6%. Those are exactly the types of units that were commonly being set up as full-time Airbnbs. Also, Airbnbs were especially concentrated in neighborhoods that did see large drops in rents, like EV and Soho, so maybe it did have an impact. 1. https://www.mns.com/manhattan_rental_market_report https://www.mns.com/manhattan_rental_market_report

altairprime 2y ago

I would imagine the rent cartel folks had a block in place to keep NYC rents from dropping when all the Airbnbs eventually hit the market, and I bet NYC is collecting evidence from rents following this event to use against them.