New Study Shows Link Between Proliferation of AirBNB and Increase in Cost of Rent

https://www.citylab.com/equity/2017/08/where-airbnb-is-raising-rents/535674/

'The new study, which has not yet been peer reviewed, is the first to analyze the impact of Airbnb listings by ZIP code in 100 of the largest metro areas.'

'The number of Airbnb listings in some central Brooklyn neighborhoods grew by a whopping 41 percent, on average, every year from 2012 to 2016.

During that same period, rents in these neighborhoods grew about 7.7 percent a year from a baseline average of $1,712 per month in 2012—that’s an estimated average increase of $131 every year.'

One aspect of this article that I think is lacking:

'How might Airbnb increase rents? Primarily by taking units off the market.'

I think yes and no. It's true units going off of the market are reducing supply and justifying increase in cost. But I think what is much more insidious is that a landlord can make more money with AirBnB, and that's what really drives up the cost of all units: that there is a more profitable alternative use, so locals have to compete with prices that tourists will pay.

Furthermore, this is the new market! I know in SF and Berlin that people, usually upper middle class ex pats or 'transplants' working in tech or finance, actually rent longer term places through AirBnB because it obviates the need for a rental contract, and they don't have to compete for scarce units in the same way: just pay online through AirBnB and the place is theirs. The units stay on the 'market' because the market has deregulated enough to validate this form of renting. Units that were rented through the traditional market are now more commodified and a cut of the profit is funnelled to AirBnB...