Short Changing New York City: The Impact of Airbnb on New York City’s Housing Market
Executive Summary The short-term rental market in New York City has swelled in recent years as a result of the emergence and rapid growth of online platforms. This expansion has created many challenges for communities throughout the City and negatively impacted the residential rental market. For decades, the residential rental vacancy rate has remained well below 5 percent, which the New York State legislature classifies as a housing emergency.1 Converting residential units to short-term rentals removes units from the housing supply and exacerbates the existing housing emergency. Any pressure on supply is likely to catalyze an increase in rental prices, an issue that is deeply concerning in New York City where affordable housing is already severely limited. Moreover, short-term rental units have been found to consistently violate health, safety, building, and zoning regulations. In New York, many short-term rental units blatantly breach the Multiple Dwelling Law, which prohibits occupancy of units within residential buildings with three or more units for less than 30 days unless a permanent resident is present during the rental period.2 There are a number of players and platforms facilitating short-term rental transactions in New York City. This report focuses exclusively on Airbnb short-term rental activity because of its role as the leader in the industry and constraints in obtaining comprehensive short-term rental data from other online rental platforms. For the purposes of this report, 2015 Airdna data3 on Airbnb listings was analyzed to assess the interaction between the short-term and the traditional rental market in New York City. This analysis focuses on a key subset of Airbnb listings, which BJH defines as “Impact Listings.” Impact Listings are units that are most likely to result in the reduction in the supply of residential rental units, and thus compound the challenges in the housing market related to excessively low vacancy rates and rising prices. In order to meet the definition of “Impact Listings,” an Airbnb listing must meet all of the following criteria: 1. “Entire Apartment/Home” defined as unique units listed on Airbnb in 2015 that allow rental of entire homes or apartments. 2. “Regular Short-Term” defined as unique units listed on Airbnb in 2015 that: a) Are booked for rental periods of less than 30 days; b) Are booked for more than one reservation in a month; and c) Have at least one non-booked day in a month. 3. “Commercial” defined as unique units listed on Airbnb in 2015 that met one of two criteria: a) Are listed for at least 3 months per year by hosts that listed more than one unit on Airbnb (“multi-listers”); or b) Are listed for at least 6 months per year by hosts that listed only one unit on Airbnb (“single-listers”).