Street Roots • Nov. 18-24, 2016
News
Page 8
Street Roots • Nov. 18-24, 2016
News
Page 9
Airbnb and the housing crisis
Murray Cox is examining the impact of the homestay company on gentrification and vacancy rates
BY AMANDA WALDROUPE
neighborhood I live in, I estimate that there
are 500 apartments, taken off the market
and rented to tourists. You see people
urray Cox was teaching children in
walking
around with suitcases. You see
Brooklyn, N.Y., about maps and
businesses changing to cater for tourists. It
statistics related to gentrification
causes neighborhoods to change. Desirable
when he began to think about how Airbnb
neighborhoods
where there’s a large
might be contributing to rising rents in his
amount of Airbnb rentals would be changing
area.
to cater for the influx of tourists. It might
He wrote some code to get data for his
not be beneficial to the existing residents.
Brooklyn neighborhood and was surprised
STAFF WRITER
M
M
s
al
by the large number of entire residences
being rented out frequently, as opposed to
single rooms within occupied homes as
Airbnb marketing suggests.
That was two years ago, and today
Murray Cox is the founder of Inside Airbnb,
an organization that
gathers data about.
Airbnb’s rentals and
listings in cities around
"You see people walking
the world, making tools
around with suitcases.
available to the public so
You see businesses chang«
anyone can see how
Ing to cater for tourists. It
Airbnb is playing out in
causes neighborhoods to
their community.
change?'
By examining this
information, his
MURRAY COX,
FOUNDER OF INSIDE AIRBNB
organization seeks to
understand how the
homestay network affects
cities and neighborhoods
and how the lack of regulation of Airbnb
listings contributes to displacement and
tight housing markets throughout the U.S.
Street Roots recently spoke with Cox to
find out how Airbnb is contributing to low
vacancy rates and how some cities are
fighting back.
Amanda Waldroupe: What impact does
it have for someone to rent out their entire
home?
Murray Cox: If someone is renting
out their house, there’s a chance that
they’re removing that house from
housing stock. There is a financial
incentive to rent it out permanently.
Gentrification has been around in
most neighborhoods for quite some
time. Airbnb is definitely part of that
same problem of real estate
speculation and gentrification. Airbnb is
about tourism and no residents living
there. It’s changing the face of the
neighborhood.
A.W.: How so?
M.C.: In Bedford-Stuyvesant, the
PHOTO COURTESY OF MURRAY COX
A.W.: Could you give some examples?
M.C.: There might be a lot of businesses
like supermarkets, schools, the barber shop
and a lot of long-term businesses that aren’t
trendy bars, coffee shops or wine stores.
Tourists don’t spend their money (at those
businesses). Tourists are looking for
entertainment. They’ll probably go into the
city. Compared to a family or residents
Airbnb is displacing, tourists are spending
their money widely.
A.W.: The popularity of using Airbnb
seemed to explode over the past five years. How
responsible do you think the Great Recession
was for creating Airbnb, which allows people
to supplement their income?
M.C.: I can speculate. The founders of
Airbnb said they created it in response to
the recession. I think people usually have
an interest in making more income, through
whatever means, through a second job or
tax breaks or whatever.
Just to focus on the recession and
incomes, I think, is an incomplete picture.
In New York City, Airbnb recently released
statistics that said about 75 percent of their
community are “middle class.” When you
look at the data and the fine print, it says
“middle income.” Middle income, according
to the Airbnb definition, was up to 200
percent of the area median family income
(MFI), which for a single person was
$125,000 a year. That’s quite a good income
for a single person. So, you have to ask:
Who is it benefiting? Is it benefiting
homeowners? People who have resources
already? If people are being displaced and
people are evicting tenants, that’s impacting
other residents in that neighborhood who
are also trying to find housing.
A.W,: Airbnb touts itself as being part of
the “sharing economy, ” but oftentimes, hosts
will charge far more per night than market
rent, which makes listing on Airbnb
profitable. The data you’ve analyzed show,
according to your website, that the “majority of
Airbnb listings in most cities are entire homes,
many of which are rented all year round -
disrupting housing and communities.”
M.C.: Any city needs to define what the
acceptable use (of Airbnb) is. There is no way
to do that because Airbnb is not transparent.
There is a culture of deceit about who’s using
it, where they are and how they’re using it
They don’t want to share any data. They don’t
want to take any accountability. Airbnb will
post listings without permits. The hosts are
hidden behind Airbnb.
Even renting out private rooms can be
problematic. What’s stopping someone from
splitting an entire apartment into multiple
rooms? You turn the apartment into hotel
rooms. That’s important in cities that require
student housing, places for young people to
live. So like subleases, young people - maybe
they need to live with someone who has a spare
room. Most cities that are populous have very
low vacancy rates. Even in places like Portland,
where there are ADUs (accessible dwelling
units), it’s my understanding that they were
built to provide housing without increasing the
apartment buildings. If the homeowner
suddenly turns around and wants to rent it out
to tourists instead, it’s not how it was intended
to be used. If you allow that type of use, what’s
stopping someone from going further?
A.W.: Should the rooms or homes rented out to
Airbnb be considered akin to hotel rooms? Or
renting a house?
M.C.: I think they should be treated as hotel
rooms, as commercial hotel rooms. That makes
it very clear whether we allow this commercial
activity in a neighborhood. It needs to be as
commercial businesses, but regulated as
residential areas. The zoning hasn’t changed in
that neighborhood unless cities go through that
process.
A.W.: What should cities be doing to regulate
Airbnb? Which cities are doing it right?
M.C.: I think we are in a period of
deregulation right now. I think we’ll move
toward effective regulation in the future. The
cities that are doing a better job are places like
San Francisco - the Board of Supervisors came
up with an ordinance a couple months ago that
made it illegal to rent units without permits.
It’s arguable whether that’s having an impact
on Airbnb. For cities that agree to collect
hospitality taxes and don’t do anything else,
the tax really just levels the playing field
between the hotel industry and Airbnb. It
doesn’t address the disrupting of the
neighborhood, or the loss of housing and
affordable housing.
A.W.: What about placing caps on how long
people can stay in a unit or how much a person is
charged per night, to something close to fair
market rent if the room were on the market?
M.C.: But how do you know when (a host
has) reached the cap? The only way most
cities have a route right now is having a
team of data analysts responding to
complaints, as well as subpoenaing
Airbnb through a judge for that
information. Hotels are required to share
data with the regulators. I think that model
is appropriate for Airbnb. These people are
running a public business that should be
regulated to protect consumers.
■IM
A.W.: Portland has a vacancy rate estimated to
be close to zero percent. Recently, a building was
built and touted to address the crisis by offering
affordable housing. Yet the entire top floor has
been rented through Airbnb. What do you think is
wrong with this picture?
M.C.: Well, if there is no regulation or no
enforcement that could easily happen -
building new housing for housing residents and
(then) the owner or even the tenant just flips it
onto Airbnb (instead). If there’s enough
demand for tourism and people can charge
more to tourists, that’s what’s going to
happen. People are smart; they’re
good at making money. They’ll rent
out to tourists rather than
residents. On Oct. 21; New
York’s governor signed a new
law, which made it illegal to
advertise entire homes if the
homeowner wasn’t present
That should have drastically cut
those listings. I checked the data last
week. It had dropped from 20,000 to
19,000. That’s nothing. My conclusion
is that people are trying to hide from
the law. Most people don’t care that
this new law is in effect even though
they could be fined $7,500. That’s an
example of the flouting the law, a lack
of compliance and the difficulty in
enforcing the laws. Landlords don’t
want to rent to long-term tenants,
regardless of whether that’s based
on their own experience or the
myth of the “awful tenant” To
have that type of sentiment is
devastating for communities.
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