“The Impact of Airbnb on NYC Rents”, issued by New York City Comptroller Scott Stringer on May 3, is little more than a defamatory fabrication designed to attack the entire short-term rental industry. It’s a “study” that is seriously flawed in its methodology, and it appears to be designed to present conclusions justifying a set of false premises. It does not hold up to statistical rigor, nor does it come close to proving the narrative that was predisposed from the onset.
The Vacation Rental Management Association (VRMA) has been professionalizing the vacation rental side of the short-term rental market for decades. Our members face serious battles in a number of communities across the country because of misinformation like this New York City study. Small communities often lack resources for in-depth studies and look to larger cities for policy concepts, studies like this one only fuel a Not-In-My-Backyard mentality,
Let’s get some facts straight: AirDNA is a reputable independent third-party market research firm. That much is true, and they have a wealth of data, including more than 4.8 million rentals analyzed, 98 million reservations tracked, and 80,000 markets covered. It provides valuable research to vacation rental property owners and managers to help them optimize their property performance, keeps it in line with market trends, and better run their businesses.
In trying to make a case that short-term rentals were bad for New York City renters, the report tried to conflate this wealth of data – as well as information from the U.S. Census Bureau – to prove a predetermined storyline that the Comptroller and several New York City Council members have regarding the short-term rental industry. By showing that the number of Airbnb listings and the costs of long-term rentals has both risen within the city, Mr. Stringer’s report alleges that the two must be connected.
Any statistician would quickly recognize this as the questionable cause logical fallacy cum hoc ergo propter hoc – and would similarly quickly note that correlation does not necessarily imply causation.
While relying on AirDNA for its data, at no point did the Comptroller’s office contact AirDNA to discuss the statistics used from their website. Where AirDNA could have provided significant additional research to shed light on the issue, the Comptroller’s office chose to remain in the dark. This, too, hints toward the cherry-picking fallacy, in which only data that confirms a particular position is used in the study.
Several major factors point to the rudimentary methodology used to determine the impact of “Airbnb”, which in this case is used as a stand-in for the short-term rental industry as a whole. For instance, the report mistakes every unique listing ever uploaded onto the site as the number listings that were active in that year. However, large portions of Airbnb listings are inactive, sitting idly on the site and made unavailable for rent by hosts and/or unbooked by guests.
The report continues to mistakenly lump all listing types - entire Homes, private rooms, and shared rooms – together in the listing count. When a host lists their private room or a shared room on Airbnb, they are not removing a home from the residential housing market. To conflate these listing types is misguided and misrepresents New Yorkers that rent out a spare bedroom to supplement their income or help pay their mortgage.
The Comptroller also erroneously considers a listing of one night and a listing of a whole year to have the same impact on the housing costs. AirDNA noted that over half of all listings in New York City were rented out just 1-3 months in the last year, suggesting that they are part-time, seasonal rentals, rented while a host is away on holiday or if an apartment is between tenancy agreements, for example.
Finally, the report does not take into consideration U.S. Census statistics on seasonal homes. The Comptroller claims that Airbnb listings “skyrocketed from 1,000 in 2010 to over 43,000 in 2015, before declining to slightly under 40,000 in 2016”. It does not mention that in 2010, there were already 39,793 seasonally vacant housing units in the city – not 1,000.
The report attempts to make a case that Airbnb’s market share of seasonally vacant homes is emblematic of a problem while ignoring that these housing units already existed and were never part of the city’s occupied housing market. Seasonal homes have existed in New York City for decades. VRMA has witnessed that the rise of short-term rental platforms is doing nothing more than bringing attention to these properties that have quietly operated for years.
A nonbiased and statistically valid study would have come to markedly different conclusions. It would point out that New York City’s policies toward short-term rentals are clearly not working. The city is leaving millions of potential tax dollars on the table that could be used to help solve affordability issues, which VRMA members have encouraged and as other cities have done. Furthermore, the report demonstrates that the city’s policies are confusing, misunderstood, and unenforceable.
In 2016, there were over 349,000 vacant housing units in New York City. The city – and Comptroller Stringer – is spending an enormous amount of time and resources focusing on a very minor segment of that vacant housing subset when they should be focused on the root cause of the remaining vacant properties and working on solutions for housing issues. Instead, they are attacking reputable companies and a longstanding industry. By viewing this as a problem and engineering flawed studies to justify action, they do a great disservice to everyone they represent.
Mike Harrington, President VRMA
Mike Copps, Executive Director VRMA