A new report from a team of researchers in the School of Urban Planning at Canada’s McGill University finds 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 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 report, entitled “The High Cost of Short-Term Rentals in New York City,” finds that between 7,000 and 13,500 units of housing have been pulled from the market around the five boroughs, as landlords (or occupants) seek higher returns from transient rentals, and that this shrinking supply has driven up the median long-term rent throughout New York City by 1.4 percent, resulting in a $380 annual rent increase for the median New York tenant now looking for an apartment.
The report also looks at Airbnb’s impact on specific communities within the City. The McGill researchers found that in Lower Manhattan and Williamsburg (which the analysis treats as a single district), there are 12,400 Airbnb listings, which earn at total of $160 million annually. This breaks down to slightly less than $13,000 per year, per apartment.
The report also says that around 1.6 percent of all housing units in this area are regularly used as Airbnb rentals, which means that some 2,700 dwellings are being rented out to short-term tenants for a substantial portion of each year. Another 1,200 apartments are being similarly rented out, but nearly full-time. And a further 150 homes have been converted into so-called “ghost hotels,” where individual rooms are being rented to separate guests. By this accounting, the report concludes, between 1,300 and 2,900 apartments in Lower Manhattan and Williamsburg have been removed from the regular rental market available to long-term tenants seeking a traditional lease.
The McGill researchers also looked at Lower Manhattan in isolation (separate from Williamsburg) 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 indicates that Airbnb 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.
The administration of Mayor Bill de Blasio maintains that Airbnb rentals are almost always illegal, because they violate New York’s Multiple Dwelling Law, which prohibits rentals of fewer than 30 days in buildings with three or more units, unless the owner is present.
The hospitality industry (along with its unions) also bitterly denounces Airbnb rentals, arguing that such operators function as de facto hotels, but derive an unfair (and unlawful) advantage, because they don’t pay taxes, while routinely ignoring safety and zoning regulations, as well as licensing requirements.
Within the buildings where Airbnb rents apartments, condominium owners condemn the quality-of-life impact (and security concerns) posed by an endless stream of visitors treating such a dwelling as their own. In rental buildings, landlords decry the windfall they say is being reaped by tenants who are not legally entitled to sublet their apartments, especially to short-term guests.
A cursory search of Airbnb recently showed dozens of apartments available for short-term rent in every neighborhood of Lower Manhattan, offered at daily prices ranging from $70 per night, to more than $700.