One of the ongoing debates about disruptors, from Uber to Airbnb, is the degree to which they are a new service or simply an existing service repackaged to escape regulation. A McGill University study of Airbnb rentals in New York City comes down strongly in the latter category.
The study, The High Cost of Short-Term Rentals in New York City by McGill University’s School of Urban Planning. Under New York law, as is the case in many other jurisdictions, short-term rentals such as Airbnb for fewer than 30 days are prohibited in buildings with 3 or more units unless the owner is present.
The McGill study found that;
- Two-thirds of Airbnb revenue in New York comes from illegal listings.
- The use of units for Airbnb rentals has removed between 7,000 and 13,500 housing units of housing from New York City’s long-term rental market.
- The economic effect of such reduced housing supply was to increase median long-term rent in New York City by 1.4% over the last three years, resulting in a $380 rent increase for the median New York tenant. For Manhattan, in particularly, the rental cost increase is $700.
- The median host of a frequently rented entire-home/apartment listing earned 55% more than the media rent.