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January 22, 2015

New York City Debates Airbnb Pros and Cons

New York City's City Council held a hearing yesterday to determine the affect Airbnb and other short-term rental sites are having on housing costs.

Tenants complained to the council that landlords are illegally running homes and apartments as if they were hotels, renting the rooms out to tourists for short-term stays instead of residents, according to the Associated Press. In addition, other homeowners and tenants are arguing that Airbnb is providing income to residents who are struggling to afford studio apartments that can cost in excess of $2,000 a month.

While New York State law finds it is illegal in most cases to rent out an apartment for less than 30 days without the original resident still staying there, one speaker at the hearing attests that one entire floor of their building has been converted to short-term rental use for up to $600 per night.

An October report from state Attorney General Eric Schneiderman's office found that Airbnb rentals in New York City rose from 2,650 in 2010 to 16,500 in early 2014, with nearly three-quarters of these listing in violation of city or state laws. The Mayor's Office of Special Enforcement fielded 1,150 illegal-hotel complaints during 2014, 62 percent more than 2013.

One thing is for certain, the public's interest in renting out their apartments has never been higher. "This is our answer to affordable housing," Joshua Greenberg told the Associated Press. 

According to Quartz, Airbnb's numbers show no signs of slowing naturally. Quartz cited a research report from Barclays that found Airbnb jumped from offering 300,000 rooms in February 2014 to 1 million by December of that year. For reference, Hilton, InterContinental Hotels Group (IHG) and Marriott International each maintain just under 700,000 rooms.

The report also predicts that Airbnb's growth in bookings could triple during 2015. Airbnb currently represents as much as 17.2 percent of hotel room supply in New York, 11.9 percent in Paris, and 10.4 percent in London, according to Barclays' estimates.

However, it isn't all smooth sailing for the short-term renting explosion. In early December, U.S. cities began pushing back harder against the practice, and the pressure is only expected to tighten with more rooms being rented out.

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About the Author: Elliott Mest





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