Economy Watch: Is Airbnb Affecting Rents in Major Metros?
- Aug 26, 2016
A new analysis by FiveThirtyEight, which is better known for its political prognostications but which also does economic studies, finds that Airbnb’s impact on rental residential markets is still small in most cities. The concern, sometimes voiced by politicians and others, is that as more landlords list units on Airbnb–”commercial listings”–instead of offering them to live in, the already severe housing shortages in such metros as New York and San Francisco will get worse, and rents will continue to go up.
FiveThirtyEight did its analysis of Airbnb using booking and revenue data provided by consulting firm Airdna, which is unaffiliated with Airbnb. To be “commercial” in the FiveThirtyEight analysis, a listing had to be for an entire home or apartment, as well as had to be booked for 180 days or more between June 2015 and May 2016.
According to FiveThirtyEight, there were nearly 9,000 commercial listings in Airbnb’s 25 largest U.S. markets during the 12 months ending in May 2016. That’s 10 percent of Airbnb’s total listings in those markets, but they also make up about a third of its revenue, so there seems to be an incentive to grow commercial listings.
For now, however, Airbnb isn’t having much impact on rents. That’s mainly because the raw number of commercial units is under 1,000 in all but the biggest cities, which isn’t enough to impact rents. Even in Airbnb’s biggest domestic market, New York, there are only about 2,500 commercial listings, compared with about 2.2 million total rental apartments–a drop in the bucket so far.