Blame Gentrification, not Airbnb, for Rising Rent Costs

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This past Friday, the New York senate passed a bill that makes it illegal to advertise entire apartment rentals for stays under 30 days. If Governor Andrew Cuomo signs the bill into law, Airbnb will take a huge blow in New York, which is the company’s most profitable market. In a city where a decent hotel in the city can run you upwards of $300 a night on the weekend, Airbnb offers a cheaper alternative for tourists and visitors who are OK swapping room service and fresh towels for a more authentic and homey experience. The app has served as a marketplace connecting would-be couch surfers with homeowners and tenants who are brave and ambitious enough to host them.

For those of us who have taken advantage of the website or its mobile app, we understand it to be a win-win. Hosts can make some extra money by renting out their rooms, couches, apartments, or homes, and travelers can save some money on their lodging costs. The first time I saw Beyoncé live at Barclays, I was still living in DC and I was able to stay at a cute apartment in Crown Heights during the weekends. I ate bodega deli sandwiches and picked glitter out of my clothes while sitting on a quintessential Brooklyn stoop and all was right with the world.

But apparently not everyone is benefitting from these transactions, and beef with Airbnb in New York has lasted over a year. There are several issues at hand. Perhaps most obviously, hotels are pissed that they are losing business to independent hosts around the city. Services like Airbnb are a huge source of competition in such a bustling tourist market. Neighbors and community members near host sites are uncomfortable with the idea that a revolving door of strangers are allowed to infiltrate their sacred spaces. New York landlords don’t like that people who haven’t surrendered their social security number, credit and background check, three months worth of rent, and their first born child are allowed to spend the night in one of their units and potentially put a hole in the wall. No surprise there.

But one of the arguments heard the loudest is that Airbnb threatens affordable housing, which is a delicacy in the Big Apple. If hosts own units (sometimes multiple units) solely to rent them them out for short term stays, the owner is running an illegal hotel. Furthermore, keeping entire residential units dedicated to Airbnb short stays drives up the prices of rent in the surrounding neighborhoods.

This latter claim, which has fair housing advocates riled up against the temp housing giant, is a tricky one. It’s worth noting that it was already illegal to rent apartments in buildings with three or more units in them for less than 30 days. This has been the case since 2010. The bill that was passed on Friday targets Airbnb specifically by going after advertisers who are in violation of this code. Airbnb hasn’t been able to confirm exactly how many of their hosts in New York are operating under the illegal hotel model. However, the data that is available suggests that, while these illegal hotel operators make up a significant portion of the revenue earned by Airbnb hosts, they only make up a small percent of of the units advertised in the New York area.

But what about the rest of the do-good hosts who allow travelers to stay in their rooms or apartments while they’re on vacation or sleeping elsewhere? Are they completely off the hook for responsibility in New York’s housing crisis? I doubt it. Gentrification in New York’s low-income neighborhoods is the reason for the rising costs of rent in New York — and also an effect of it. Educated millennials who snag coveted gigs in New York are moving into those neighborhoods and increasing the rent rates. Their arrival, usually accompanied by the opening of a Starbucks or some other café in the general area, means an increase in bars, restaurants, and other services and resources that increase the costs of living in any one neighborhood. They, too, complain about the rent, and to offset their high cost of living — also balanced with student loan repayments, because that’s also a thing — they use sites like Airbnb to rent out their rooms and apartments. Think about it: if travelers looking for a crash pad are interested in neighborhoods that are poppin’, we have to consider what already exists there (and how much the rent was to begin with) to garner such a reputation.

To focus on Airbnb’s bad apples seems to avoid a broader discussion about how gentrification creates the ideal circumstances for a service like this to operate in the first place. The recent racial discrimination complaints against Airbnb also sheds light on the investment tenants and homeowners have in maintaining a specific “standard” in their properties and neighborhoods. The intersections of race and class are glaringly evident walking through neighborhoods like Williamsburg and Harlem, where Airbnbs are plentiful. Gentrification and capitalism are the culprits here. The bustling Airbnb market is simply an effect.