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NYC Renters Paid Extra $616M Thanks to Airbnb, Study Says

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Re: NYC Renters Paid Extra $616M Thanks to Airbnb, Study Says

#131

Post by cimmanom »

briandear wrote: post #42

I am curious, doesn’t the legality of roommates also drive up rents? It seems like if roommates weren’t a thing, it would drive rents down simply because people wouldn’t be able to afford apartments in many cases without a roommate. I am not suggesting a ban on roommates of course, but it does seem like there are a large number of variables that affect rent prices. We could argue that AirBnB constricts long term hous…

Prohibiting roommates would drive the rent per person up and the rent per unit down. That would make the city less affordable to both renters and landlords.

The problem with AirBnB is that it benefits landlords and tourists at the expense of renters by driving the rent per unit up, the short term rent per person down and the long-term rent per unit up.

Re: NYC Renters Paid Extra $616M Thanks to Airbnb, Study Says

#132

Post by neonate »

loceng wrote: post #71
neonate wrote: post #23

Earlier quoted context omitted.

Two problems mentioned in the rebuttal: the study counts every Airbnb unit as a rental taken permanently off the market, and the dataset counts every blocked-off calendar date as a night the unit was booked. Both of those are obvious over-counting. A study that doesn't even try to account for those is pretty obviously political. Airbnb should have posted estimates of how much this over-counting could distort the data…

On the surface you can't assume either way if a listing on Airbnb means the unit is permanently off the market or not, likewise with counting or not counting every blocked-off calendar date: if it's not a period of 4-8-12 months blocked off, then it's likely not being rented to a long-term renter; the lister perhaps even perhaps booked those block-off calendar dates through a different service, or did the transaction…

Of course you can't assume either way, which is exactly what they did, which means they over-counted, inflating the numbers in the direction of their conclusion.

Re: NYC Renters Paid Extra $616M Thanks to Airbnb, Study Says

#133

Post by michaelmrose »

sigfubar wrote: post #52
evanlivingston wrote: post #28

Earlier quoted context omitted.

$68 a month is easily 5% of income afters taxes for many people. In a country where we already spend an absurdly high percentage of our income on rent, this doesn't seem trivial.

Numerically you're right, but you're showing a distinction without a difference. In the kinds of neighborhoods where Airbnb has a foothold (gentrified, desirable, centrally located) rents are already so high that an extra $68 doesn't make a damn bit of difference. I live in one of these neighborhoods, and I speak for absolutely everyone who can afford to pay the rent I'm paying: we don't care about the additional $68…

You are insisting on the $68 a month figure based on dividing the total prchange in prices over all rentals then insisting the effect is actually almost entirely concentrated in a small segment of neighborhoods which means that we ought not logically to divide it between all parties but insisting on using the smaller figure derived from doing so.

This is bad math based on already uncertain math.

In a pathological case where we have a rich neighborhood consisting of 3 owners and 7 renters transformed into 3 owners 3 renters and 4 airbnbs not only would the price increase presumably by much more than 68 for the remaining renters the other renters would seek rent elsewhere increasing demand and therefore price. Given more buyers than sellers they would push someone out presumably to a still less desirable neighborhood where they would displace someone else.

Your neighborhood isn't a market unto itself and you can't pretend changes their don't have pervasive effects on the rest of the market and decreasing supply MUST increase price throughout the market.

Re: NYC Renters Paid Extra $616M Thanks to Airbnb, Study Says

#134

Post by jeremyis »

tribune wrote: post #100
rubyn00bie wrote: post #94

This article is totally worthless without some way to gauge what $616M actually is... I have a VERY hard time believing in NYC that's anything but "piss in the wind" compared to total amount spent on rent. Too many articles come out with a "shocking number" that doesn't mean anything except to those who don't know the scale. This is mostly a click-bait article and study.

According to [1], there are 2,146,892 occupied rental apartments in NYC. So this works out to an average of $287 per rental per year. Hardly "piss in the wind". [1] - https://www.nakedapartments.com/guides/nyc/renting-in-new-yo...

that would be a bump of $24 per month of rent on average....

Re: NYC Renters Paid Extra $616M Thanks to Airbnb, Study Says

#135

Post by bogomipz »

tvchurch wrote: post #101

How much extra do NYC renters pay from not building enough new supply? Or from rent control stifling the development of new supply?

>"Or from rent control stifling the development of new supply?"

Rent controlled apartments were 1% of the total housing stock in NYC as of 4 years ago. That number has only decreased since then. So not at all.

Re: NYC Renters Paid Extra $616M Thanks to Airbnb, Study Says

#136

Post by rubyn00bie »

tribune wrote: post #100
rubyn00bie wrote: post #94

This article is totally worthless without some way to gauge what $616M actually is... I have a VERY hard time believing in NYC that's anything but "piss in the wind" compared to total amount spent on rent. Too many articles come out with a "shocking number" that doesn't mean anything except to those who don't know the scale. This is mostly a click-bait article and study.

According to [1], there are 2,146,892 occupied rental apartments in NYC. So this works out to an average of $287 per rental per year. Hardly "piss in the wind". [1] - https://www.nakedapartments.com/guides/nyc/renting-in-new-yo...

Absolutely piss in the wind. Are you kidding me? Again numbers and scale throw people off...

The average rent for an NYC apartment per month is $3375 (https://www.rentjungle.com/average-rent-in-new-york-rent-tre...) totaling: $40,500 per year.

So that $287 increase is less than 0.7% per year.

Re: NYC Renters Paid Extra $616M Thanks to Airbnb, Study Says

#137

Post by CryptoPunk »

sdhgaiojfsa wrote: post #106
toomuchtodo wrote: post #25

Earlier quoted context omitted.

Easy there with terms like “better real estate utilization”, which could be conflated with “more efficient rent seeking at the expense of housing consumers”. The end goal is not always maximum profit extraction. NYC is served best by balancing the needs of both long term and short term renters, while ensuring investors reasonable compensation/rates of return on capital invested for services provided.

This is not what people traditionally think of as "rent-seeking." Rent-seeking behavior is doing something to get more money without providing any corresponding value. AirBnb hosts do provide value -- just not to the people who live in the neighborhood. But it is fine to argue that, based on their willingness to pay more, out of town visitors provide better utilization of the housing resource. TL;DR: Extracting rents…

Exactly. Banning people from renting out their place on Airbnb is actually what's rent-seeking.

It means you get to enjoy lower rent, but at the expense of the unit's full economic potential being utilized.

In economic terms, if a unit can fetch a higher rent being rented short term, then it provides more economic value as a short term rental, and laws preventing that reduce economic utility.

Re: NYC Renters Paid Extra $616M Thanks to Airbnb, Study Says

#138

Post by bogomipz »

busterarm wrote: post #118
busterarm wrote: post #108

Earlier quoted context omitted.

Yes, the 0.7% of "rent controlled" units of NYC's available inventory that's shrinking by 2.5%/yr is totally stifling new supply. Feel free to tell us about how the rent stabilized units, which do compromise 1/3 of the inventory but in 3/4 of cases are within spitting distance (10%, and see 4% rent increases every 2 years) of market rate are keeping down supply though. Tell us about about how luxury condos in places…

Or instead, how about I tell you about my time working for a real estate tax certiorari firm in NYC and how landlords with multiple properties will deliberately underutilize their buildings for tax advantages. Occupancy maximums of 90% and one or multiple buildings deliberately at 0% occupancy (usually the primary residence of the landlords' extended family members for undeclared income) is the norm.

>"Or instead, how about I tell you about my time working for a real estate tax certiorari firm in NYC and how landlords with multiple properties will deliberately underutilize their buildings for tax advantages."

When in the 1980s? Was Ed Koch the mayor?

Market rate on a modest(500 sq foot plus) apartment is worth close to $3K a month or 36K a year. Please provide a citation this tax break which is worth more than 36K a year in 2018 for leaving a unit unoccupied?

Re: NYC Renters Paid Extra $616M Thanks to Airbnb, Study Says

#139

Post by jedberg »

sidlls wrote: post #98
jedberg wrote: post #86

Earlier quoted context omitted.

What is the 1% rule? As a landlord I usually assume 0.5% per year. So a million dollar condo would be 50K a year, or about $4200/mo, which is exactly in line with current nyc rents.

The rule is a residential rental is only worth the risk or has a good return if the property can be rented at about 1% of the value per month or more (e.g. a $100k home should rent for $1k/mo). I generally try to get an annual cap rate of 9% or more (1%/mo less expenses).

Wow. That rule must only apply in smaller cities. I can't think of a single residential property in the Bay Area that would even come close to that.

On the other hand, all the properties I manage do 0.5% per year and have all been profitable, not even including the appreciation on the property.

Re: NYC Renters Paid Extra $616M Thanks to Airbnb, Study Says

#140

Post by busterarm »

bogomipz wrote: post #138
busterarm wrote: post #118

Earlier quoted context omitted.

Or instead, how about I tell you about my time working for a real estate tax certiorari firm in NYC and how landlords with multiple properties will deliberately underutilize their buildings for tax advantages. Occupancy maximums of 90% and one or multiple buildings deliberately at 0% occupancy (usually the primary residence of the landlords' extended family members for undeclared income) is the norm.

>"Or instead, how about I tell you about my time working for a real estate tax certiorari firm in NYC and how landlords with multiple properties will deliberately underutilize their buildings for tax advantages." When in the 1980s? Was Ed Koch the mayor? Market rate on a modest(500 sq foot plus) apartment is worth close to $3K a month or 36K a year. Please provide a citation this tax break which is worth more than 36…

2000 and 2001.
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