FiveThirtyEight Studies Airbnb and Its Effect On Rising Rent
Photo courtesy Airbnb
Airbnb and like home-sharing services have certainly altered the travel landscape – at the very least from an expectation of accommodations perspective — but there is some conjecture as to how much vilification it deserves in respects to rising rent across the nation.
When you want something like perspective, you go see a person that specializes in such things. In this case, we take a look at FiveThirtyEight’s report filed by Ariel Stulberg.
At the heart of the matter, is the question whether Airbnb and like services diminish the amount of commercial properties in a given city that would otherwise be utilized for long-term rent.
As Stulberg notes, Airbnb is a bit thrifty when it comes to what kind of data it releases to the public at large. For their report, FiveThirtyEight employed the likes of Airdna, which in turned scraped Airbnb listings to gauge the revenue garnered by hosts.
In the end, the publication found that home-sharing solutions do reap a great deal of revenue via commercial rentals (described in the article as any property rented at least 180 days a year) for its hosts. However, the amount of Airbnb properties is so minute compared to rental properties in general that it’s hard to show the service has any dramatic effect on rising rental costs – so far.
Back in July, TravelPulse noted that Elizabeth Warren had joined with several lawmakers who were taking Airbnb to task for rising costs. At the time, Reuters quoted the senator as saying: “We are concerned that short-term rentals may be exacerbating housing shortages and driving up the cost of housing in our communities.”
Fast forward to Wednesday’s report and it seems that FiveThirtyEight’s data doesn’t exactly coincide with a nefarious Airbnb that is swallowing up the market and unilaterally driving up prices. Again, there is some gray area to wade through for a travel market that is still getting used to the idea of visitors choosing someone’s spare bedroom over a hotel.
Stulberg spoke with Stockton Williams who is the executive director of the Terwilliger Center for Housing at the Urban Land Institute. Williams explains, “It’s a very valid concern. But I’m not sure there is evidence that Airbnb has had a significant effect on either price or supply.”
The data seems to suggest that homeowners do in fact glean a great deal of revenue from commercial property. However, the amount of property that is being taken off the potential market is so small that its impact is a figurative blip on the screen.
Stulberg explains: “It suggests the absolute number of commercial units on Airbnb is relatively low, representing well below 1 percent of all rental units. Any impact on rental supply is therefore small, and limited to a handful of neighborhoods where such services are most popular.”
Because we steep perspective with two sides of a coin, Stulberg continues: “At the same time, the analysis shows that listings that are operated commercially, though a small minority, represent a major chunk of all host revenue.”
The problem comes in the possibility that Airbnb does grow to encompass a much larger subset of available property.
At the moment, hosts’ share of revenue leans favorably to commercial property. That fact could hurt the rental market if the service were to grow exponentially.
For now, we can put away our pitchforks and torches. Airbnb isn’t the root of all the country’s rental woes.
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