Airbnb and Housing(publicpolicy.airbnb.com)
publicpolicy.airbnb.com
Airbnb and Housing
http://publicpolicy.airbnb.com/airbnb-housing/
57 comments
> And don't even get me started on the fact that while looking for a place to live, landlords have justified their insane asking rate by telling me that the previous tenant rented out a spare room on Airbnb.
Ah, that's lovely. Coupled with the "no subletting" clause standard in NYC leases, this means that landlords can jack up rent while also giving themselves an easy excuse to terminate your lease at any point in the future when they decide it's convenient (for them) to do so.
(If you think this is too sleazy and underhanded to be believable, you've never tried renting an apartment in NYC. There are certainly some great exceptions - my current management co. is great - but I've heard some great horror stories, and experienced one of my own.)
Ah, that's lovely. Coupled with the "no subletting" clause standard in NYC leases, this means that landlords can jack up rent while also giving themselves an easy excuse to terminate your lease at any point in the future when they decide it's convenient (for them) to do so.
(If you think this is too sleazy and underhanded to be believable, you've never tried renting an apartment in NYC. There are certainly some great exceptions - my current management co. is great - but I've heard some great horror stories, and experienced one of my own.)
it's a strange thing to contemplate how a startup like this could directly contribute to housing cost inflation in your own backyard. and to think you might be right - the answer could be you might need to give up some privacy (let strangers have run of your home) to live where you want - wow - that's a bright future we're working with.
i'm an apartment dweller myself - i'm going to check with the building management today to see if they ban this kind of short term rental in my building. at least protect myself on my own turf.
i'm an apartment dweller myself - i'm going to check with the building management today to see if they ban this kind of short term rental in my building. at least protect myself on my own turf.
> to live where you want
To use an extremely scarce resource that is considered to be valuable by most humans. I am sure there are no problems like these in cheaper, less popular cities.
To use an extremely scarce resource that is considered to be valuable by most humans. I am sure there are no problems like these in cheaper, less popular cities.
There are entire walk-ups in New York dedicated to short-term leasing through Airbnb. Entire walk-ups. A friend of mine has a landlord that does this. I only appreciated on an academic level the effects that Airbnb would have on the rental market until I learned about this practice. Now, it's very real to me.
Entire walk-ups.
Entire walk-ups.
I am really tired of these "oh shit we have to issue a PR spin control response" posts that presume I've already read the original drama and don't link to it.
"You might have seen a story" my ass. Link to something if you're going to respond to it.
"You might have seen a story" my ass. Link to something if you're going to respond to it.
You're right; we should have linked to it. I'm changing that now.
Are you also planning on addressing the numerous factual misrepresentations in the post? Because your [edit:AirBnB's (Brian is CEO is AirBNB)] already poor credibility is taking a real beating: see pretty much all of the comments on this page.
I am not aware of any factual misrepresentations, but I am working my way through some of the comments.
Methinks a smart person would listen to their lawyer and not make any claims on this or any other public forum while embroiled in an active lawsuit.
Here is the link so you don't have to go back to the story: http://www.slate.com/articles/business/moneybox/2014/02/airb...
I kind of hate when people cherry-pick stats to be misleading, even if I otherwise support them.
The relevant number for NYC is not the percentage of hosts sharing a primary residence, but the percentage of total listings in NYC, or percentage of room-nights booked. I'm sure those numbers are far worse than 13%. Anyone renting non-primary residences is probably renting a lot of non-primary residences.
The relevant number for NYC is not the percentage of hosts sharing a primary residence, but the percentage of total listings in NYC, or percentage of room-nights booked. I'm sure those numbers are far worse than 13%. Anyone renting non-primary residences is probably renting a lot of non-primary residences.
Also depends on how they classify 'NYC host'. Last month I rented a place on 1st Ave. that was actually owned by a real estate company in San Diego.
The place was fine, but the experience trying to coordinate with them was... not great. They were clearly just jumping on the bandwagon to make a quick buck.
The place was fine, but the experience trying to coordinate with them was... not great. They were clearly just jumping on the bandwagon to make a quick buck.
You are correct that there are some hosts that list multiple properties, thus skewing the listing breakdown. It depends on the city. In most cities, room nights and revenue for "primary dwellings," meaning the homes people live in, are around 70-80%. We are in 34,000 cities, so this really varies quite widely. I would like to see the breakdown to be skewed much closer to primary dwellings for two reasons - (1) they have much higher review scores from guests, and (2) they don't typically enrich cities the way ordinary hosts do (though there are always exceptions. We are actually working with cities and our community to remove corporate rental companies that don't meet the above.
What is acceptable varies by market too (IMO). In Bali, the "owner lives in a house with 3-4 rental houses attached" is totally fine, and just as "authentic" as sharing a single house, since it's common for an extended family to live like that.
Anecdata: I stayed in NY last January with a guy who had 10 different places from Greenpoint to Williamsburg.
Does the percentage even matter? You need to weight by cost/benefit, under some releveant model.
PR disguised as science. I like Airbnb in many ways, but these arguements are shallow and wrong. If Airbnb is used to help pay for rent, that necessarily pushes rent upwards. That their research shows Airbnb makes housing "more affordable for families" could only be based on families renting out vacant rooms, something not all families want to do but may be forced to do if Airbnb is widespread.
This is Fox News level "science." This article made me slightly queezy.
This is Fox News level "science." This article made me slightly queezy.
> If Airbnb is used to help pay for rent, that necessarily pushes rent upwards.
I definitely know people who are contemplating getting a bigger place with a spare room specifically to AirBnB it. Besides general effects on the housing market, this can increase people's financial risk (depending other aspects of their finances, such as savings cushion). It amounts to over-provisioning their housing in the hopes of reselling the spare capacity at a profit (you figure you can get more on AirBnB for the 3rd room than the incremental 2rd->3rd room costs you). That can turn out badly if somehow the reselling doesn't work, isn't as profitable as you thought it would be, you end up unable to manage it for a period of time so the extra capacity sites idle, etc. Sort of like buying extra servers in a colo because you figure you can make the money back by renting VPSs at a markup. It can definitely work, but to really make it work you are now in the VPS business, and you might lose money if you aren't good at that business.
I definitely know people who are contemplating getting a bigger place with a spare room specifically to AirBnB it. Besides general effects on the housing market, this can increase people's financial risk (depending other aspects of their finances, such as savings cushion). It amounts to over-provisioning their housing in the hopes of reselling the spare capacity at a profit (you figure you can get more on AirBnB for the 3rd room than the incremental 2rd->3rd room costs you). That can turn out badly if somehow the reselling doesn't work, isn't as profitable as you thought it would be, you end up unable to manage it for a period of time so the extra capacity sites idle, etc. Sort of like buying extra servers in a colo because you figure you can make the money back by renting VPSs at a markup. It can definitely work, but to really make it work you are now in the VPS business, and you might lose money if you aren't good at that business.
In most rental markets, it's more difficult to find affordable housing for 3BR and 2BR units for families. If more people rent out 2BR and 3BR appartments to rent out the extra room, that's going to put more pressure on families looking for affordable housing.
I'm concerned about the effect this could have on family housing in San Francisco. If a family already owns a house and uses airbnb to rent out a downstairs bedroom now and then, sure, I could see that helping. But if a family is in a bidding war with someone without kids, the anticipated income from an airbnb rental could enable the bidder without a child who needs an extra room (to say nothing of the very high costs associated with raising a kid in SD) to go much higher. This would have the effect of making it harder for families to purchase what is currently zoned as single family housing.
Now, this is just a concern. It may not currently be happening, and it may be unlikely to happen in the future. According to this post, Ken Rosen, an economist at UC Berkeley, conducted a detailed study for airbnb and states that "...not only is there no evidence to suggest that short-term rentals are making homes less affordable, our research and analysis indicate that home sharing has the potential to make urban housing more affordable for more families."
I was unable to find a link to this study on the blog post... is this it?
http://urbanland.uli.org/news/short-term-rentals-and-the-hou...
The only reference I get to a "family" here is "...the amount of income from a rental alone is not generally sufficient to live on, but it can go a long way in providing supplemental income for a family." Sure, but is a family as able to access this supplemental income as someone without kids, and more free bedrooms? And what about the "bidding war" scenario, above? Even if it is not a big factor now, it could become a big factor once the expectation of rental income becomes the norm.
The urban land article references this study:
http://www.rosenconsulting.com/products/rentalreport.html
The roseconsulting link makes no reference to families. I recommend people who are interesting read it. The summary is that other factors have led to the rise in housing costs, including restrictive zoning laws and an employment boom, and that airbnb (and related) rentals are too small a part of the rental market to have much of an effect. Does this mean they could have a large effect if it become more widespread?
Now, this is just a concern. It may not currently be happening, and it may be unlikely to happen in the future. According to this post, Ken Rosen, an economist at UC Berkeley, conducted a detailed study for airbnb and states that "...not only is there no evidence to suggest that short-term rentals are making homes less affordable, our research and analysis indicate that home sharing has the potential to make urban housing more affordable for more families."
I was unable to find a link to this study on the blog post... is this it?
http://urbanland.uli.org/news/short-term-rentals-and-the-hou...
The only reference I get to a "family" here is "...the amount of income from a rental alone is not generally sufficient to live on, but it can go a long way in providing supplemental income for a family." Sure, but is a family as able to access this supplemental income as someone without kids, and more free bedrooms? And what about the "bidding war" scenario, above? Even if it is not a big factor now, it could become a big factor once the expectation of rental income becomes the norm.
The urban land article references this study:
http://www.rosenconsulting.com/products/rentalreport.html
The roseconsulting link makes no reference to families. I recommend people who are interesting read it. The summary is that other factors have led to the rise in housing costs, including restrictive zoning laws and an employment boom, and that airbnb (and related) rentals are too small a part of the rental market to have much of an effect. Does this mean they could have a large effect if it become more widespread?
Hey, this is not actually what we are saying. Here is what we are saying. The vast majority of people in these cities (~85-90%) are renting the homes that they live in (also know as their primary dwelling) - either a living room, bedroom, or their whole home when they are gone. 60% of them depend on the money they make to pay their rent or mortgage - this according to the surveys we have done for our economic impact studies. These people were living in these homes before Airbnb, so they had a choice to either move out and find a cheaper place (presumably in a different neighborhood or out of the city) since they cannot afford the vacant space, or put it on Airbnb. Many of these people are self employed or under employed. A classic example are artists. This was my story when I moved to San Francisco. If these people moved out, the likely new tenants would be people who could afford to move in without renting on Airbnb. Now, of course some people could move in with the intention of renting on Airbnb. We are not saying this never happens. What we are saying is that more people are using Airbnb to keep their homes than using it as means of displacing people. The property manager issue is a real problem that we are dealing with.
By increasing the value of extra rooms and allowing people to monetize their vacancies, AirBNB necessarily increases the demand for rooms and the ability of people to pay more rent. This must push up rent. It is impossible for it not to.
Laws restricting short term rentals may partially be to protect the hotel industry, but they are also to encourage the environment and pricing necessary for longer term residency.
There are widespread stories, including some friends of mine, of people running large networks of properties leased expressly for subleasing on AirBNB. This reduces the supply of housing units substantially, and increases their prices. AirBNB needs to actively limit such usage in order to be defensible. Right now AirBNB rewards users who are obviously abusing the system and violating the law.
If your studies were conclusive, I'd expect you to release actual data instead of whitewashed PR like this.
Laws restricting short term rentals may partially be to protect the hotel industry, but they are also to encourage the environment and pricing necessary for longer term residency.
There are widespread stories, including some friends of mine, of people running large networks of properties leased expressly for subleasing on AirBNB. This reduces the supply of housing units substantially, and increases their prices. AirBNB needs to actively limit such usage in order to be defensible. Right now AirBNB rewards users who are obviously abusing the system and violating the law.
If your studies were conclusive, I'd expect you to release actual data instead of whitewashed PR like this.
I don't know how they can argue with a straight face that using short-term rent to pay mortgages and leases doesn't raise the prices of real estate. That extra income is (obviously) going to get factored into real estate prices when someone makes an offer on a property. And the people who are using it now to supplement mortgages are going to use that income as a selling point when they try to sell their property - "gets $XXX/day on short-term rentals."
EDIT: typos & minor wording
EDIT: typos & minor wording
Right. In the very short term, they are helping people, but in the long term it's an economic arms-race. Put in very simple terms, if you make owning a house more affordable, houses will get more expensive to compensate.
Hacker News stories need an auto-bot-post explaining supply and demand and "seller's market" AMD "buyer's market".
But my gut feeling tells me that supply and demand have nothing to do with price! It's all greedy landlords and tech elitists trying to evict me out of my home I can't afford.
"56% of Airbnb hosts in San Francisco said they use their Airbnb income to help pay their mortgage or rent."
If these people didn't use AirBNB they couldn't afford their rent. They'd move out or find a cheaper place. Now they have AirBNB they can afford to pay more rent which raises the market.
If these people didn't use AirBNB they couldn't afford their rent. They'd move out or find a cheaper place. Now they have AirBNB they can afford to pay more rent which raises the market.
Which is no doubt very true. But this still may be an argument for keeping Airbnb in the bigger picture if you value diversity in your neighborhoods. Any by diversity I mean the ability for many low to mid wage workers to live near their jobs.
That could be true.
The risk is that it prices the low to mid wage workers out with AirBNB not even keeping them in an area. I'd love to see a study on the average income of AirBNB hosts outside of their AirBNB income.
The risk is that it prices the low to mid wage workers out with AirBNB not even keeping them in an area. I'd love to see a study on the average income of AirBNB hosts outside of their AirBNB income.
They are referring to this article on Slate - http://www.slate.com/articles/business/moneybox/2014/02/airb...
> If you’re looking for a place to stay in Marfa this evening, there are a total of five options available. In the six year history of Airbnb, only 17 properties have ever been booked in Marfa. So it’s difficult to argue that Airbnb is having any impact on the housing market in this community.
Kinda funny reading that then the original article on slate attempting to make something out of this non-story
> If you’re looking for a place to stay in Marfa this evening, there are a total of five options available. In the six year history of Airbnb, only 17 properties have ever been booked in Marfa. So it’s difficult to argue that Airbnb is having any impact on the housing market in this community.
Kinda funny reading that then the original article on slate attempting to make something out of this non-story
So you found there to be some reliable information in the Airbnb article? Please extract that here, as I all I found was a bunch of unsupported defensive statements cleverly disguised as scientific conclusions.
Just because the Slate piece IS bunk, it doesn't follow that the airbnb response IS NOT bunk. They're both wrong in how they're presenting the "rightness" of data.
> 87% of Airbnb hosts in New York share only the home in which they live
Does this mean they're admitting that 13% of Airbnb hosts in New York are sharing other properties?
I was under the impression that Airbnb strongly denied such people existed.
Does this mean they're admitting that 13% of Airbnb hosts in New York are sharing other properties?
I was under the impression that Airbnb strongly denied such people existed.
That's kind of crazy -- more than one out of ten is an illegal hotel as per their own statistics.
There was something mentioned here: http://skift.com/2014/02/13/airbnb-in-nyc-the-real-numbers-b... that has more explanations...
So, if I'm reading this right, a bit more than one in eight AirBnB hosts in New York are violating the law? Is that not an issue in of itself?
Worse. 2/3rd of listings are or would be violating NY laws:
"Two thirds of the listings that contain user reviews are for the “Entire home/apartment” room type (listings without reviews are slightly less, at 64%). Because of a New York State law regarding short-term housing, it is almost always illegal to rent a full apartment when the host is not present for less than 30 days."
"Two thirds of the listings that contain user reviews are for the “Entire home/apartment” room type (listings without reviews are slightly less, at 64%). Because of a New York State law regarding short-term housing, it is almost always illegal to rent a full apartment when the host is not present for less than 30 days."
This seems to fly in the face of AirBnb's claim: "87% of Airbnb hosts in New York share only the home in which they live."
Anecdotally just surfing around what's currently listed - the vast majority of listings are for whole home/apartments, only a minority are shared.
IMO there are some major shenanigans going on in AirBnb's numbers.
Side note: I hate, HATE, this weasel word, "sharing": "Rosen’s work also examined whether some people would stop renting their apartments to permanent residents and start sharing them only on Airbnb."
IT'S CALLED RENTING. AirBnb hosts are "sharing" their apartments to visitors as much as my local restaurant is "sharing" their food with me.
Anecdotally just surfing around what's currently listed - the vast majority of listings are for whole home/apartments, only a minority are shared.
IMO there are some major shenanigans going on in AirBnb's numbers.
Side note: I hate, HATE, this weasel word, "sharing": "Rosen’s work also examined whether some people would stop renting their apartments to permanent residents and start sharing them only on Airbnb."
IT'S CALLED RENTING. AirBnb hosts are "sharing" their apartments to visitors as much as my local restaurant is "sharing" their food with me.
I completely agree with you about the term "sharing" economy. That term is certainly a PR victory for many of these companies.
This is commerce, and I would agree that a new, disruptive, form of commerce has been enabled by the web. There will be tremendous benefits, and there will be new problems and externalities. The old regulatory regime will need to adapt, but (in my opinion), this does not mean that zoning laws are now obsolete. Some laws are obsolete, others may be more relevant than ever.
Maybe "micro-commerce" would a better term? In any case, "sharing" is an extremely inaccurate and misleading term here.
This is commerce, and I would agree that a new, disruptive, form of commerce has been enabled by the web. There will be tremendous benefits, and there will be new problems and externalities. The old regulatory regime will need to adapt, but (in my opinion), this does not mean that zoning laws are now obsolete. Some laws are obsolete, others may be more relevant than ever.
Maybe "micro-commerce" would a better term? In any case, "sharing" is an extremely inaccurate and misleading term here.
>This seems to fly in the face of AirBnb's claim: "87% of Airbnb hosts in New York share only the home in which they live."
The claim many are making is that people buy (or even rent) a second property only so they can list it on the site. Which takes away available properties for long term renters or driving prices up. AirBnb's claim of 87% just means that only 13% the NYC hosts are listing secondary properties (ones purchased solely to list on the site). The 87% could be listing their entire home (in which they live) during times they will be away. AirBnb's claim is not really at odds with the numbers stated in the parent comment.
The claim many are making is that people buy (or even rent) a second property only so they can list it on the site. Which takes away available properties for long term renters or driving prices up. AirBnb's claim of 87% just means that only 13% the NYC hosts are listing secondary properties (ones purchased solely to list on the site). The 87% could be listing their entire home (in which they live) during times they will be away. AirBnb's claim is not really at odds with the numbers stated in the parent comment.
It's only 13% of hosts, but 2/3 of listings. So hosts who are renting out homes they don't live in are renting them out much more frequently, but the hosts who are renting out their primary residence do it much less frequently.
What does "would be" mean here? Meaning "the listing" may be legal, but the listed arrangement is illegal?
That logic didn't work so well for Craigslist's "erotic services" category, which was shut down after pressure from Richard Blumenthal, the attorney general of Connecticut.
(Not that that stopped people from advertising sex work on Craigslist - they're just (slightly) less direct about it).
(Not that that stopped people from advertising sex work on Craigslist - they're just (slightly) less direct about it).
I thought soliciting for sex for money was explicitly illegal, besides the crime of actually sexing for money.
Boy that Slate article is just bad. So one sided. Airbnb is absolutely disrupting the home ownership/rental and hotel markets. Like any market there might be winners and losers. It will sort itself out though and we'll settle at a new balance.
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This is a great example of the the danger of consuming "raw" corporate propaganda. Without professional journalists to fact-check, look for other perspectives, and filter corporate self-interest, many readers will come out misinformed. Information supply becomes further tainted by attempts to manipulate the average Joe.
I really hope the NYTimes and Washington Post don't go out of business; I rely on them to adjudicate most of my news.
I really hope the NYTimes and Washington Post don't go out of business; I rely on them to adjudicate most of my news.
Agreed - especially given the popularity of sites like the Tampa Bay Times' politifact.com, I hope we'll continue to see newspapers take advantage of their fact-checkers and editorial teams outside (and inside) of their own publications. It might be a great way for those organizations to stay relevant - sort of like "Snopes for the real world".
From a purely user point of view I wonder if they could automate this classification and let me use it as a search filter. AirBnB's compelling use-case for me is as a "paid couchsurfing": people renting out spare rooms in their residence, the whole residence while they're temporarily gone, etc. In many cities those are indeed the main kind of result. But in a few cities there are a lot of listings that are more like a commercial operator, depending on the location ranging from "DIY hostel" to VRBO-style listings. I'd rather just exclude those from the search, because I don't find AirBnB to be a very useful portal to that kind of property (most of the legit vacation-rental type stuff have their own websites where you can rent directly, and the "DIY hostel" stuff I'd rather stay away from). As is I have to spend a good bit of time manually trying to filter them out.
Surprised to see them mention NYC in this -- given the legal attention they are facing, it would have been better to not mention the city at all, or any stats about it, so as not to give the critics ammunition (eg: "In their OWN BLOG POST, they admit...")
Hotels are a form of progressive taxation: rich out of town travelers pay more for housing than permanent residents. Generally travelers are richer than non travelers because traveling is usually a discretionary expense or paid for by a corporation.
AirBnb eliminates the progressive taxation, thereby raising living expenses for poorer residents. Rich people love it, poor people hate it. Sure, you can make some money in the short term by renting out your spare room, but in the long term, as rents rise, this process involuntarily turns your two bedroom apartment into a one bedroom + strangers' room apartment.
Just wait until San Francisco "Google bus activists" get a whiff of AirBnb.
AirBnb eliminates the progressive taxation, thereby raising living expenses for poorer residents. Rich people love it, poor people hate it. Sure, you can make some money in the short term by renting out your spare room, but in the long term, as rents rise, this process involuntarily turns your two bedroom apartment into a one bedroom + strangers' room apartment.
Just wait until San Francisco "Google bus activists" get a whiff of AirBnb.
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So, HN community in these threads is against of Airbnb because it pushes up the prices of housing in desirable cities/city regions. Did I get it right? What's so bad about that?
There isn't actually evidence that this occurs that I am aware of.
The solution to this problem is to allow property developers and landowners to freely increase the housing supply. And then start charging land taxes instead of property taxes, to encourage such development.
> The solution to this problem is to allow property developers and landowners to freely increase the housing supply.
I dont think such a thing will ever be possible. Some big companies in the housing market might even be against it.
I dont think such a thing will ever be possible. Some big companies in the housing market might even be against it.
Airbnb's claim is that there is no evidence suggesting that the line has been crossed, so the only impact of their service is that existing landowners / renters get to line their pockets a bit.
They don't have a leg to stand on if you see people successfully investing in property to rent exclusively at short-term rates, which has started to happen in some markets [1][2]. I'm tempted to cheekily link to their own blog post here indicating that 13% of their NYC hosts are doing exactly this.
And don't even get me started on the fact that while looking for a place to live, landlords have justified their insane asking rate by telling me that the previous tenant rented out a spare room on Airbnb.
1. http://needwant.com/p/buying-apartment-airbnb/ 2. http://sanfrancisco.cbslocal.com/2014/01/20/home-sharing-sit...