Airbnb Establishes Housing Council to Bolster Short-Term Rentals as Regulators Bear Down

Airbnb clearly doesn’t want a repeat of New York City’s defacto ban on short-term rentals in other destinations. So it announced the Airbnb Housing Council to better balance its own interests with those of U.S. cities and other communities.

Airbnb would like to avoid “well-intentioned” yet “strict” regulations, said Jay Carney, Airbnb’s global head of policy and communications, speaking Wednesday at a U.S. Conference of Mayors meeting in Washington, D.C.

Carney said New York City’s law is “probably the most onerous regulation in the country if not the world.” He said there’s been no change in the cost of housing in New York City and that hotel prices have soared.

The Airbnb announcement said the council’s goals will be to “better balance the benefits of home sharing with the needs of communities facing housing affordability challenges” and that it will advise Airbnb on policies to help communities expand long-term housing.

Former Baltimore Mayor Stephanie Rawlings-Blake, who also previously headed the U.S. Conference of Mayors, will chair the Airbnb council. She is the only council member who will be compensated by Airbnb for her service.

Is Airbnb Responsible for Affordable Housing Crisis?

Do short-term rentals drive up housing costs? Airbnb argues that independent research finds other factors are the main drivers. The company states that “dedicated Airbnbs” make up less than 1% of U.S. housing stock in major U.S. cities. However, it’s clear that in some communities, the density of Airbnbs is far greater than that.

Plenty of research, however, points to Airbnb and the vacation rental industry as significant contributors to the affordable housing crisis.

Informs Research concluded in 2021 that Airbnb indeed drives up property prices and rents in certain U.S. markets, particularly in destinations where there are fewer owner-occupied short-term rentals. The largest increases come in vacation towns, it found.

“Ultimately, we found that the number of Airbnb listings in some zip codes were positively associated with both property price increases and rental rates,” said California State University’s Edward Kung, one of the report’s authors. “Concerns about the effect of Airbnb on the housing market do not appear unfounded. But more research is needed into the long-run effects on the housing supply.”

Harvard Tied Airbnb Listings Numbers to Rent Increases

Harvard Political Review cited a Harvard Business Review paper that noted a correlation between increases in Airbnb listings to rises in the asking prices for rents.

“This means that as the number of Airbnb units in a neighborhood increases, the asking prices for rental units would increase as well,” the Harvard Political Review said in 2021. “The paper went on to say that this is ‘likely due to non-owner-occupies reallocating their properties from the long- to the short-term rental market.'”

In 2017, the Journal of Housing Economics found that for Boston census tracts that had a high density of Airbnb listings in relation to housing units, the increase in the asking price of rents was 3.1%.

“We further find evidence that Airbnb is increasing asking rents through its suppression of the supply of rental units offered for rent,” the Journal of Housing Economics said.

Conference Board of Canada Saw No Correlation

A Conference Board of Canada study late last year found that the presence of Airbnbs in a neighborhood do not spur rental price increases, according to Victoria News.

“We find no compelling evidence that the level of Airbnb activity had a meaningful impact on rents. Out of the 30-per-cent increase in rents observed in our sample of neighbourhoods between 2016 and 2022, at most less than one percentage point, or just under $10, can be attributed to increased Airbnb activity,” the study said.

Airbnb’s Steps on the Housing Front

In its earliest days, Airbnb flouted local regulations, pushed growth, and cities have been very slow to catch up. In recent years, the company has engaged with jurisdictions around the world to try to come up with regulations that would enable it to operate while appeasing local concerns.

In October, Airbnb appointed its first housing economist, Taylor Marr, to help with housing policy and research.

In a Skift interview at the time of his appointment, Marr said: “In some places, there may be a role where Airbnb needs to work with cities to come up with regulations that minimize any negative impacts to communities. And if we find that there are some communities in which Airbnb is negatively impacting, then we want to work with cities to implement regulations that better target those specific issues.”

Airbnb Ballot Support and Donations

In its announcement Wednesday, Airbnb said it donated $3 million to the San Francisco Foundation to make it easier for localities to approve bond proposals to support affordable housing and services.

The company backed Colorado ballot measure Prop 123 to enable municipalities to use occupancy tax money to fund new housing for workers.

Since 2022, Airbnb has donated more than $1.4 million to housing advocacy groups, the company said.