AirBnB_Report FINALdocx
AirBnB_Report FINALdocx
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  1. Office of the New York City Comptroller Scott M. Stringer1IntroductionNew York City has been suffering through an affordable housing crisis for years. Between 2011 and 2017, New York City lost nearly 183,000 affordable units of housing renting for less than $1,000 –larger than the entire public housing stock. Affordable housing is increasingly hard to find, with vacancy rates for apartments renting for less than $1,000 at 1.54%.1Homelessness stands at a record high, with over 60,000 homeless people sleeping in shelters every night. Meanwhile, wages are stagnant and rents continue to climb in all five boroughs.The rising popularityof homesharing websitessuch as Airbnbis adding to the problem.2The trendy replacement for hotels and hostels in effect removes housing units from the overall supply –units thatmight otherwise be available torent to New Yorkers looking to rent an apartment. The most basic concept in the field of economics –supply and demand –says that, everything else equal, a reduction in supply will lead to higher prices. This report, by Comptroller Scott M. Stringer, evaluates the impact of homesharing on rents in New York City over the period 2009 to 2016. BackgroundBetween 2009 and 2016, rents rose 25% on average citywide, or $279 per month. Rents rose most rapidly in Brooklyn,by 35% ($340per month) followed by Queensby 22% ($242per month); Bronxby 21% ($171per month); Manhattanby 19% ($276 per month); and Staten Island by 14% ($129 per month).3During the same period, Airbnblistings skyrocketed, from1,000in 2010to over 43,000 in 2015, before declining to slightly under 40,000 in 2016according to data from AirDNA(Figure 1)–most in in violation of existing State or City laws.4Airbnblistings are most heavily concentrated in Manhattan(52% of all listings in 2016) and Brooklyn (35% of all listings in 2016), but are found in 1Source: Department of Housing Preservation and Development: Selected Initial Findings of the 2017 New York City Housing and Vacancy Survey(dated February 9, 2018)(http://www1.nyc.gov/assets/hpd/downloads/pdf/about/2017-hvs-initial-findings.pdf).2There are other homesharing websites, includingHomeAway and VRBO, which have smaller presences in the City and for which listings data was not available. They were therefore not included in this analysis. Presumably their inclusion would have amplified the results.3Source: U.S. Census Bureau,American Community Survey, 2009-2016.4A report by Attorney General Eric Schneiderman found that 72% of short-term rentals on AirBNB appeared to be illegal (https://ag.ny.gov/pdfs/AIRBNB%20REPORT.pdf)Bureau of BudgetAPRIL2018The Impact of Airbnbon NYC RentsNew York City Comptroller Scott M. Stringer
  2. 2Impact of Airbnbon NYC Rentsevery borough. Airbnblistings are particularlyconcentrated in Manhattan below 59thStreet, including Chelsea, Clinton and Midtown Business District (11.3% of all listings in 2016), Battery Park City, Greenwich Village and Soho (7.9%), Chinatown and Lower East Side (6.9%), Murray Hill, Gramercy and Stuyvesant Town (5.9%) as well as parts of Brooklyn including Greenpoint and Williamsburg (8.3%), Bedford-Stuyvesant (5.1%), and Bushwick (5.0%). Rents in these eight neighborhoods rose at substantially higher rates than the boroughaverage between 2009 and 2016. Average monthly rent in Greenpoint and Williamsburg went up by 62.6% ($659 per month), by 47.2% in Bedford-Stuyvesant ($407 per month),by 39.5%in Bushwick($369 per month), by 25.9% Murray Hill, Gramercy and Stuyvesant Town($488 per month), by 23.4% in Chelsea, Clinton and Midtown Business District($398 per mont), by 23% in Chinatown and Lower East Side ($242 per month), and by 21.4% in Battery Park City, Greenwich Village and Soho($411 per month). Figure 1: AirbnbTotal Listings by Year, 2010-2017FindingsWe sought to estimate the impact that Airbnblistings have had on neighborhood rents. Utilizing neighborhood level data for the years 2009 to 2016, we found that:For each one percent of all residential units in a neighborhoodlisted on AirBNB, rental rates in that neighborhood went up by 1.58 percent. Between2009 and 2016, approximately9.2percent of the citywide increase in rental rates can be attributed to AirBNB. AirBNB listings were heavily concentrated in parts of Manhattan and Brooklyn and had a greater impact on these neighborhoods. Approximately 20% of the increase in rental rates wasdue to AirBNB listings in midtown and lower Manhattan including neighborhoods such 1,092 2,362 5,628 10,391 26,122 43,144 39,836 36,615 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,00020102011201220132014201520162017
  3. Office of the New York City Comptroller Scott M. Stringer3as Chelsea, Clinton, and Midtown Business District; Murray Hill, Gramercy, and Stuyvesant Town;Chinatownand Lower East Side;Battery Park City, Greenwich Village, and Soho as well as parts of Brooklyn including Greenpointand Williamsburg. In aggregate, New York City renters had to pay an additional $616million in 2016due to price pressures created by AirBNB, with half of the increase concentrated in the neighborhoods highlighted above. Data and MethodologyWe obtained AirBNB listings data from AirDNA (https://www.airdna.co/), which scrapes listings data on a daily basis from AirBNB. We gathered zip code level data going back to 2010 when AirBNB first listed dwellings in New York City,through the end of 2017.We then summed the data to the neighborhood level, defined by Census Bureau Public Use MicrodataArea (PUMA).5Whenever a zip code crossed PUMA boundaries, we used 2010 population ratios as weights to divide the number of listings between PUMAs. The number of unique listings in New York City peaked in 2015 at just over 43,000 and dropped to under 37,000 by 2017. Rental rate data comes from the annual American Community Survey (2009-16). We use averagemonthlygross rentfor all renters as our rent measure.6We also control for neighborhood level economicand demographic characteristics using data from the American Community Survey. We pooledeight years of data for 55 neighborhoods,bringing our total number of observations to 440. The dependent variable is the logarithm of average monthly gross rent by neighborhood in a given year. The independent variable with the coefficient of interest is the share of residential units listed on AirBNBwhich is calculated by dividing annual unique AirBNB listings in the neighborhood by total residential units in the same neighborhood.7Wealsocontrol for demographic and economic changes in neighborhood level by includingaverage household income (in log form), population (in log form), and the shares of college-educated and employed residents in the neighborhood.We also includedyear and neighborhood-level fixed effects (dummy) variables to control for otherwise uncontrolled-for trends and neighborhood characteristics. A summary of the regression results is presented in Table 1. We find that as the share of units listed on AirBNB goes up by one percentage point, rental rates in the neighborhood go up by 1.58 percent, after controlling for neighborhood level demographic and economic changes. The result is statistically significant atthe 1-percent level. Coefficients of other control variables including household income, population and share of college graduates are positive and statistically significant at 1-percent level. Employment rate is not statistically different from zero. 5PUMAsare geographic units used by the US Census for providing statistical and demographic information. Each PUMA contains at least 100,000 people. There are 55 PUMAs in New York City. See https://www.census.gov/geo/reference/puma.htmlfor more details. 6Gross monthly rent includes contract rent, utility costs, and fuel costs. Gross monthly rent amounts are more comparable across time and households than contract rent which may or may notinclude utilities and fuels. 7A table with AirBNB listings, Residential Units and AirBNB Share by PUMA in 2016 can be found in the Appendix.
  4. 4Impact of Airbnbon NYC RentsIn order to calculate the AirBNB contribution to total change in rents, we firstpredictthe change inPUMA level average gross rentsfrom 2009 to2016 using the regression model coefficientswith existing conditions (i.e.with existing demographic and economic conditions as wellas AirBNB listings). Wethen compare these predictions with an alternative prediction in which AirBNB listings are set to zerothroughout the entire time period.The difference between the latter and the former gives the rent change associated with AirBNB growth in the neighborhood. Results are reported in Table 2(column labeled “Total Annual Rental Cost of AirBNB to the Neighborhood”), which shows rental change associated with increase in AirBNB listings at PUMA level.With existing conditions, from 2009 to 2016, citywide annual gross rents werepredicted to goup by 25.3% (approximately $6.67 billion). If, however, there were no AirBNB listings, the rents would be predicted to go up by 23% (approximately $6.06 billion). Therefore, approximately $616 million,or 9.2percent of the overall increase in rents for the period may be attributed to the rise in AirBNBlistings. AirBNB growth, however, was particularly high in certain neighborhoods. For instance, the share of AirBNB listings reached 4.1% of residential units in the Chelsea, Clinton & Midtown Business Districtneighborhood and 4.6% in Greenpoint and Williamsburg. The largest relative AirBNB effects on the rental market occurred in Chelsea, Clinton & Midtown Business District(21.6%) and Murray Hill, Gramercy & Stuyvesant Town(21.5%). Average monthly rents went up by in these neighborhoods by $398 and $488 respectively out of which $86 and $105 per month could be attributed to AirBNB growth. The largest absolute effect occurred in Greenpoint and Williamsburg where average rents increased by $659between 2009 and 2016,of which $123 can be attributed to AirBNB growth.Table 1: Regression ResultsDependent Variable: Logarithm of Average Rental RateVariablesFixed Effects ModelAirBnb Share1.584***(0.389)Household Income (log)0.152***(0.0349)Population (log)0.194***(0.0421)Share of College Graduates0.436***(0.109)Employment Rate0.154(0.111)Constant2.760***(0.554)Observations440Number of PUMAs55R-squared0.836PUMA FEYESYear FEYESNOTE: Standard errors in parentheses*** p<0.01, ** p<0.05, * p<0.1
  5. Table 2: Neighborhood ResultsPUMA CodeNeighborhood NameRental Units (2016)AirBNB Listings (2016)Monthly Rent (2009)Monthly Rent (2016)Change in Monthly Rent(2009-16)Change due to AirBNB (in $)% Change associated with AirBNBTotal Annual Rental Cost of AirBNB to the Neighborhood4001Greenpoint & Williamsburg45,1473,296$1,054 $1,713 $659 $123 18.60%$66,401,795 3808Murray Hill, Gramercy & Stuyvesant Town54,5792,355$1,887 $2,375 $488 $105 21.50%$68,820,035 3807Chelsea, Clinton & Midtown Business District59,6794,486$1,697 $2,095 $398 $86 21.60%$61,451,469 3810Battery Park City, Greenwich Village & Soho51,5963,123$1,916 $2,327 $411 $79 19.30%$49,121,185 4003Bedford-Stuyvesant34,5552,047$863 $1,270 $407 $59 14.40%$24,288,659 4002Bushwick36,0521,990$935 $1,304 $369 $58 15.60%$24,984,861 4004Brooklyn Heights & Fort Greene34,8111,321$1,270 $1,779 $510 $54 10.70%$22,737,172 3809Chinatown & Lower East Side60,1802,746$1,052 $1,294 $242 $47 19.60%$34,252,965 3805Upper East Side78,1301,803$1,780 $2,158 $378 $43 11.30%$40,027,985 3802Hamilton Heights, Manhattanville & West Harlem37,3801,433$1,093 $1,338 $245 $39 15.90%$17,452,649 4005Park Slope, Carroll Gardens & Red Hook30,750787$1,593 $1,906 $312 $39 12.40%$14,341,390 4006Crown Heights North &Prospect Heights38,5321,238$931 $1,307 $376 $39 10.40%$18,131,790 3806Upper West Side & West Side68,9201,750$1,722 $2,012 $290 $32 11.10%$26,613,050 4101Astoria & Long Island City58,6531,239$1,075 $1,386 $311 $29 9.20%$20,092,964 3803Central Harlem41,8321,119$798 $1,084 $287 $28 9.80%$14,118,122 4109Sunnyside & Woodside36,068647$1,292 $1,608 $317 $22 6.90%$9,431,814 3801Washington Heights, Inwood & Marble Hill60,473995$935 $1,214 $279 $21 7.50%$15,253,929 4011Crown Heights South, Prospect Lefferts & Wingate32,957585$938 $1,213 $275 $20 7.40%$8,067,130 4012Sunset Park & Windsor Terrace33,528394$991 $1,312 $321 $20 6.20%$7,991,986 4014Borough Park, Kensington & Ocean Parkway31,126263$988 $1,405 $417 $19 4.60%$7,113,264 4110Ridgewood, Glendale & Middle Village35,651464$1,049 $1,375 $326 $14 4.30%$5,989,498 3804East Harlem37,8141,003$831 $960 $129 $13 10.40%$6,114,647 4015Flatbush &Midwood41,110396$935 $1,196 $261 $13 5.10%$6,618,526 4108Forest Hills & Rego Park27,313216$1,241 $1,600 $359 $12 3.50%$4,088,401 4007Brownsville & Ocean Hill33,250404$705 $886 $181 $10 5.30%$3,817,643 4010East Flatbush, Farragut & Rugby29,698256$929 $1,192 $264 $10 3.70%$3,488,963 4013Bay Ridge & Dyker Heights27,982195$1,070 $1,354 $284 $9 3.20%$3,041,981 4103Flushing, Murray Hill & Whitestone48,979292$1,177 $1,368 $191 $7 3.70%$4,104,914 4107Elmhurst & South Corona33,304190$1,115 $1,320 $205 $7 3.50%$2,895,541 4008East New York & Starrett City37,776268$839 $1,021 $182 $6 3.40%$2,794,966
  6. PUMA CodeNeighborhood NameRental Units (2016)AirBNB Listings (2016)Monthly Rent (2009)Monthly Rent (2016)Change in Monthly Rent(2009-16)Change due to AirBNB (in $)% Change associated with AirBNBTotal Annual Rental Cost of AirBNB to the Neighborhood4016Sheepshead Bay, Gerritsen Beach & Homecrest27,490167$918 $1,222 $303 $6 1.90%$1,880,709 4102Jackson Heights & North Corona32,819228$1,131 $1,288 $157 $6 3.90%$2,389,733 4106Briarwood, Fresh Meadows & Hillcrest28,452100$1,064 $1,448 $384 $5 1.20%$1,597,232 4114Far Rockaway, Breezy Point & Broad Channel22,373177$856 $995 $139 $5 3.50%$1,302,810 3701Riverdale, Fieldston & Kingsbridge27,56495$1,011 $1,225 $214 $4 1.70%$1,211,959 4009Canarsie & Flatlands27,002146$1,000 $1,242 $242 $4 1.60%$1,236,019 4104Bayside, Douglaston & Little Neck12,62183$1,269 $1,542 $273 $4 1.60%$667,138 4111Richmond Hill & Woodhaven23,544126$1,132 $1,354 $222 $4 1.90%$1,169,156 3704Pelham Parkway, Morris Park & Laconia29,59572$887 $1,126 $239 $3 1.30%$1,087,022 3903Port Richmond, Stapleton & Mariners Harbor26,520125$855 $1,061 $207 $3 1.50%$1,013,387 4018Brighton Beach & Coney Island32,416119$770 $946 $177 $3 1.50%$1,040,590 3706Bedford Park, Fordham North & Norwood39,92966$854 $1,032 $178 $2 1.10%$942,338 3707Morris Heights, Fordham South & Mount Hope41,46854$777 $970 $193 $2 1.10%$1,029,003 3708Concourse, Highbridge & Mount Eden40,14586$750 $934 $184 $2 1.20%$1,095,031 3709Castle Hill, Clason Point & Parkchester50,93664$819 $1,025 $206 $2 0.80%$1,006,744 3710Hunts Point, Longwood & Melrose42,778114$653 $811 $158 $2 1.10%$876,036 4017Bensonhurst & Bath Beach34,27587$899 $1,214 $314 $2 0.70%$941,936 4105Queens Village, Cambria Heights & Rosedale16,594108$1,178 $1,325 $147 $2 1.40%$410,678 4112Jamaica, Hollis & St. Albans32,053142$990 $1,146 $156 $2 1.30%$801,327 3702Wakefield, Williamsbridge & Woodlawn27,74762$966 $1,092 $126 $1 1.00%$402,301 3703Co-op City, Pelham Bay & Schuylerville22,24437$970 $1,095 $125 $1 0.80%$251,180 3705Belmont, Crotona Park East & East Tremont47,00570$712 $838 $126 $1 0.70%$506,036 4113Howard Beach & Ozone Park11,86658$1,139 $1,254 $114 $1 1.00%$167,533 3901Tottenville, Great Kills & Annadale8,20520$1,094 $1,074 ($19)$0 0.30%($4,864)3902New Springville & South Beach12,23953$1,048 $1,109 $61 $0 0.80%$72,989
  7. Office of the New York City Comptroller Scott M. Stringer7AcknowledgementsThe Comptroller wishes to thanksSelçuk Eren, senior economist in the Bureau of Budget, for his work on this report, as well as Lawrence Mielnicki, Chief Economist, and Preston Niblack, Deputy Comptroller for Budget.AppendixTable A:1: Residential Units and AirbnbListings by Neighborhood, 2016PUMA CodeNeighborhood NameAirBNB listings (2016)Residential Units (2016)AirBNB Share (2016)3701Riverdale, Fieldston & Kingsbridge9550,5600.2%3702Wakefield, Williamsbridge & Woodlawn6253,8920.1%3703Co-op City, Pelham Bay & Schuylerville3749,0290.1%3704Pelham Parkway, Morris Park & Laconia7250,6100.1%3705Belmont, Crotona Park East & East Tremont7070,6360.1%3706Bedford Park, Fordham North & Norwood6650,4190.1%3707Morris Heights, Fordham South & Mount Hope5452,4330.1%3708Concourse, Highbridge & Mount Eden8655,1310.2%3709Castle Hill, Clason Point & Parkchester6468,0960.1%3710Hunts Point, Longwood & Melrose11467,8520.2%3801Washington Heights, Inwood & Marble Hill99584,9471.2%3802Hamilton Heights, Manhattanville & West Harlem1,43361,7842.3%3803Central Harlem1,11967,9461.6%3804East Harlem1,00361,5881.6%3805Upper East Side1,803137,5191.3%3806Upper West Side & West Side1,750125,6731.4%3807Chelsea, Clinton & Midtown Business District4,486108,2184.1%3808Murray Hill, Gramercy & Stuyvesant Town2,355101,1112.3%3809Chinatown & Lower East Side2,74691,1493.0%3810Battery Park City, Greenwich Village & Soho3,12395,2393.3%3901Tottenville, Great Kills & Annadale2062,3390.0%3902New Springville & South Beach5354,7770.1%3903Port Richmond, Stapleton & Mariners Harbor12568,6530.2%4001Greenpoint & Williamsburg3,29671,0554.6%4002Bushwick1,99054,5603.6%4003Bedford-Stuyvesant2,04759,4053.4%4004Brooklyn Heights & Fort Greene1,32176,0111.7%4005Park Slope, Carroll Gardens & Red Hook78752,2161.5%4006Crown Heights North & Prospect Heights1,23862,8372.0%4007Brownsville & Ocean Hill40456,5420.7%4008East New York & Starrett City26863,6010.4%
  8. 8Impact of Airbnbon NYC RentsPUMA CodeNeighborhood NameAirBNB listings (2016)Residential Units (2016)AirBNB Share (2016)4009Canarsie & Flatlands14671,9560.2%4010East Flatbush, Farragut & Rugby25656,1630.5%4011Crown Heights South, Prospect Lefferts & Wingate58548,3501.2%4012Sunset Park & Windsor Terrace39451,0430.8%4013Bay Ridge & Dyker Heights19552,9550.4%4014Borough Park, Kensington & Ocean Parkway26347,0630.6%4015Flatbush & Midwood39662,1380.6%4016Sheepshead Bay, Gerritsen Beach & Homecrest16763,1690.3%4017Bensonhurst & Bath Beach8769,6200.1%4018Brighton Beach & Coney Island11952,2900.2%4101Astoria & Long Island City1,23984,8381.5%4102Jackson Heights & North Corona22861,0990.4%4103Flushing, Murray Hill & Whitestone29297,6930.3%4104Bayside, Douglaston & Little Neck8346,8650.2%4105Queens Village, Cambria Heights & Rosedale10867,3540.2%4106Briarwood, Fresh Meadows & Hillcrest10065,3840.2%4107Elmhurst & South Corona19048,6130.4%4108Forest Hills & Rego Park21657,3090.4%4109Sunnyside & Woodside64761,2241.1%4110Ridgewood, Glendale & Middle Village46468,0890.7%4111Richmond Hill & Woodhaven12649,9170.3%4112Jamaica, Hollis & St. Albans14279,3760.2%4113Howard Beach & Ozone Park5841,8370.1%4114Far Rockaway, Breezy Point & Broad Channel17751,0280.3%
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