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NYC Comptroller says Airbnb is causing rents to rise across the city

NYC Comptroller says Airbnb is causing rents to rise across the city
Photograph: Pixabay

Airbnb is the latest Silicon Valley giant to draw the ire of New York City's elected officials. On Wednesday, just days after the City Council’s new Committee on For-Hire Vehicles proposed new restrictions for ride-sharing services like Uber, Comptroller Scott Stringer released a damning report that blames the home-sharing giant for jacking up the cost of rent in neighborhoods across Manhattan and Brooklyn.

The report, which you can read in full here, posits that the surge of Airbnb listings that violate city and state laws has been a chief factor in the rapid escalation in rent costs across the five boroughs. The average cost of rent in the city increased by 25 percent since 2009, while Airbnb listings grew from just 1,000 in 2010 to slightly under 40,000 in 2016. Stringer’s office says that those two statistics are tied at the hip, and estimates that price pressure caused by Airbnb directly caused New York City renters to spend an additional $616 million in 2016.

“The new analysis sheds light on how Airbnb listings, particularly in neighborhoods where they are most heavily concentrated, exacerbate New York City’s affordability challenges and make it harder for working- and middle-class families to make ends meet,” Stringer’s office said in a press release about the report.

Just over half of the Airbnb listings in New York City in 2016 were located in Manhattan, with another 35 percent in Brooklyn. The study found that the most concentrated neighborhoods in those two boroughs saw the biggest impact from the service. Eight neighborhoods in particular (including Greenpoint, Williamsburg, Bedford-Stuyvesant, Bushwick, Murray Hill, the Lower East Side and Soho) saw rents rise at “substantially higher rates than the borough average” between 2009 and 2016. The report, which claims to control for demographic and economic changes in neighborhoods, says that as the share of Airbnb units goes up by one percentage point in a neighborhood, overall rental rates go up by 1.58 percent. Stringer’s office says that this correlation makes Airbnb accountable for roughly 9.2 percent of the citywide rent increase between 2009 and 2016. 

Airbnb wasted no time in clapping back at the Comptroller's office. The company issued a statement that took aim at the findings in the report, pointing out that the majority of Airbnb hosts share homes in which they live, and that rents across the five boroughs are declining. The statement also took issue with the report’s methodology, stating that it inaccurately counted Airbnb listings as permanent housing. 

“Comptroller Stringer’s report severely misrepresents the impact of our platform on housing and is full of elementary methodological mistakes,” Andrew Kalloch, a public policy manager at Airbnb, said in a statement. “New Yorkers deserve better from their Chief Financial Officer.”

Kalloch also pointed out that the platform has the power to help New Yorkers confront the city’s affordability crisis by providing middle-class residents with an extra revenue stream by sharing a room in their home. Still, the question remains as to how legitimate many of these listings are—a 2014 report from New York State Attorney General Eric Schneiderman found that 72 percent of the short-term rentals on the platform were in violation of city or state housing laws. 

Airbnb says that they’re working on removing bad actors from its platform, but did not immediately comment on the legitimacy of Schneiderman’s findings. 

“Airbnb is supporting legislation in Albany that would provide for rigorous enforcement against illegal hotel operators, among other things—including $100 million in annual tax revenue from Airbnb alone,” Kalloch says. “We hope that Comptroller Stringer will work with us to enact these common sense regulations.”

Stringer’s report puts more force behind the notion that Airbnb is jacking up the cost of rent in the city. Another report published last January made similar claims, but drew backlash due to the fact that it was commissioned by the Hotel Trades Council. 

New York City officials are beginning to crack down on ride-sharing services, which have had a major impact on street congestion in Manhattan. Following this new report, it would not be surprising if they did the same with Airbnb. 

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