New York City’s Tumultuous Relationship with Airbnb
Airbnb—provider of enchanting home away from homes to countless savvy travelers since its inception 10 years ago. Theirs was a revolutionary idea—one that many now cannot travel without. However, Airbnb’s rags-to-riches-startup narrative took a turn for the worse when the company hit the streets of New York City.
In a city where housing is already at a premium, Airbnb created conflict and complication. As a result of Airbnb’s emergence in the Big Apple, affordable housing initiatives were stunted, and managers were left with constant headaches as residents rented out their unit to random strangers on the internet. And given the close quarters nature of most New York City apartment buildings, neighbors often didn’t appreciate the idea, either.
Even within the pages of Mann Report Management, many of our columnists and contributors have sounded off on Airbnb’s disruptive potential. And given the current state of affairs, Airbnb isn’t going anywhere anytime soon—and neither are its many headlines.
A Rent-driven Enterprise
For the uninitiated, it is illegal in the state of New York to list one’s entire apartment for a stay of less than 30 days, unless the permanent tenant is residing in the apartment at the same time. However, Airbnb’s model practically encourages such a practice, as users frequently rent their apartments out to tourists who are only visiting for a few days at a time.
It’s not just a legality issue, either. A recent study by City Comptroller Scott Singer found an intersection between city neighborhoods with the most annual Airbnb listings, and those with the largest average rent hikes between 2009 and 2016.
“For years, New Yorkers have felt the burden of rents that go nowhere but up, and Airbnb is one reason why,” said Stringer. “From Bushwick to Chinatown and in so many neighborhoods in between, affordable apartments that should be available to rent never hit the market because they are making a profit for Airbnb.”
Greenpoint and Willliamsburg bear the brunt of this Airbnb-driven rent spike. The neighborhoods account for 8.3 percent of the City’s nearly 40,000 Airbnb listings in 2016, and saw a monthly rent increase of $659 between 2009 and 2016.
Stringer and his team were adamant that Airbnb’s keeping units off the market was only hurting the city: “If we’re going to preserve the character of our neighborhoods and expand our middle class, we have to put people before profits. It’s that simple,” said Stringer.
Open Door Policy
Another issue raised by Airbnb is within buildings themselves. Most buildings in the City require a lengthy application process that includes guarantors, multiple deposits, the submission of credit scores, and proof of employment. Airbnb simply does not require the same amount of vetting from its guests. This often creates security concerns for neighboring tenants, concerns that more often than not come down on management rather than on the Airbnb-savvy neighbor in question.
This has become a nightmare for the City, and one frequently blogged about on website likes AirbnbHell. It’s also an issue that goes both ways, as neighbors can disrupt an Airbnb with their own less-than-savory behavior.
The Crackdown
However, for those world-weary landlords and managers who’ve had just about enough of Airbnb’s open door housing economy, there is hope. Mayor de Blasio recently signed a bill that will force Airbnb to turn over all of the names and addresses of its hosts in New York City. The bill passed almost unanimously—demonstrating New York’s thick disdain for the way that Airbnb has reshaped its housing landscape.
So what does this new lack of transparency mean for the burgeoning tech giant? Essentially it exposes the aforementioned illegal hotel operator, operators who are now subject to fines of up to $1,500. That might sound hefty, but it’s less than the original proposal, which could charge violators anywhere from $5,000 to $25,000.
“Years before I was a member of the Council, I worked as a housing organizer providing services on the Lower East Side,” said City Councilwoman Carlina Rivera, the prime sponsor of the bill. “I heard countless stories from tenants and organizers about illegal short-term rentals milking them out of their security and stability of an affordable home.”
Airbnb said that it was “disappointed” in the decision, and there are concerns that the move will send the wrong message to a growing community of tech startups and innovators.
“Certainly there is a danger that New York is sending a bad message to the global tech community when it looks like we’re making decisions that favor the status quo rather than thoughtful policy decisions,” said Kathryn Wylde, president of the Partnership for New York City.
All of the politics aside, it’s doubtful that Airbnb is fleeing the tri-state anytime soon just because of one legislative crackdown—especially given that the company is currently valued at approximately $31 billion.
“No tech company has packed up and left any city where similar legislation was passed,” Rivera said. “So I don’t think this is gong to dissuade anyone from operating here.”
In other words, this is only the beginning.
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