Brooklyn Boro

Debate heats up over Airbnb’s Brooklyn impact

June 5, 2018 By Emily Nonko From The Bridge
Supporters of Airbnb hold a rally outside City Hall. Airbnb hosts say that income from renters helps them afford housing costs. AP file photo by Bebeto Matthews
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The winners and losers of the controversial home-sharing website Airbnb are still yet to be determined. Legally it lives in a murky grey area, with certain types of rentals allowed by the city and others not.

Its role in the gentrification of neighborhoods is as of yet undetermined. Tourists looking to stay in a residential neighborhood love it. So do homeowners looking to make extra cash. But it’s disliked by others, from the hotel industry to the everyday Joe who thinks having transient rentals in their community contributes to already rising rent prices while they struggle to pay rent and fight getting priced out.

So what is Airbnb’s affect on New York City, the third largest market in the world after Paris and London?

Five years ago, Tatiana Cames renovated her recently-purchased townhouse in Clinton Hill with the hope of producing rental income from part of the building. However, Cames, who is a real-estate agent, was unable to rent the two-bedroom, floor-through apartment at the price she had hoped for. Instead, a friend recommended she try Airbnb.

She was skeptical, since the home-sharing website, founded in California just three years earlier, was barely out of its startup phase. But Cames quickly realized how many tourists, charmed by the townhouse and the neighborhood, wanted to stay in her house. “It was immediately popular,” she told The Bridge. “A lot of people enjoy being in a real neighborhood, coming home to somewhere quiet.”

In 2015, Cames and her ex-husband decided to purchase another townhouse in Bedford-Stuyvesant, where they expanded their Airbnb operations. “That’s when everything went to chaos,” she said.

Her ex-husband and daughter kept apartments there, while offering five Airbnb listings throughout the home. After a neighbor complained about Airbnb operations on the block, the city inspectors came. “They decided to find a slew of reasons why [Airbrb] wasn’t justifiable,” she said, “Because even though we lived there, it was a multi-family building.” (The New York State Multiple Dwelling Law has been interpreted to prohibit such buildings from being rented as separate Airbnb units.)

The timing for Cames wasn’t good. The mayor’s Office of Special Enforcement had just begun to enforce a new state law designed to stop people from illegally advertising transient rentals. Cames was one of the first to be targeted, racking up five violations and a $5,000 fine. Ultimately she paid the fine and shuttered all Airbnb operations, in the process losing the estimated 30 percent portion of her income she had earned through house sharing.

While Cames is out of the Airbnb business, she’s frustrated that many others have managed to continue. “There’s more Airbnb than ever,” she said. “The rules are not clear at all.”

Indeed, New York is Airbnb’s third-largest market and home to tens of thousands of hosts. Roughly 21,400 hosts operate in Brooklyn alone, an Airbnb spokesperson told The Bridge, with 25,000 more across Manhattan.

But as Airbnb use proliferates throughout Kings County, legal gray areas and confusion remain. Airbnb is lobbying on one side to protect its business against tightened regulation, with plenty of money and motivation. It’s the second-largest recent startup after Uber, with a valuation of about $30 billion.

On the other side is the hotel lobby and its employee unions, which see Airbnb as a threat to business. In the middle of the debate, with differing opinions, are elected officials, housing advocates, and even Airbnb hosts. Ultimately there remain major disagreements on how home sharing should be regulated, how Airbnb contributes to gentrification, and who, exactly, is benefiting most from Airbnb.

Airbnb’s Widespread Effects

One thing’s for certain: Airbnb has changed the landscape of Brooklyn tourism–and possibly real estate as well.

In 2017 alone, according to Airbnb, its New York hosts housed more than 1.8 million guests–people who ditched New York’s traditional hotel districts to settle into a neighborhood, at least temporarily. “It was really cheaper and besides, we enjoy staying in an apartment more than a hotel,” said Mariana Sosa, who visited with her boyfriend from Buenos Aires, Argentina, and stayed 20 days in Crown Heights in March. “That we feel ‘at home’ is important to us,” she said.

In their case, the visit was prompted by the wedding of a family friend in Williamsburg. But Brooklyn has become a tourist destination in its own right. The industry accounts for nearly 10% of the jobs in the borough, with employment growing at almost 10 percent per year since 2012, according to a report from the Brooklyn Chamber of Commerce. 

Hotel developers are catching up: Brooklyn now has 50 hotels up and running and another 40 in the pipeline. But Airbnb puts visitors in the heart of charming residential neighborhoods, which aren’t zoned for hotel development like less-charming areas of Gowanus and Downtown Brooklyn, at a generally cheaper price.

Dealing With the ‘Bad Actors’

As New York has ramped up Airbnb enforcement, there does seem to be one issue that unites most players. That’s about Airbnb rejecting its “bad actors”: landlords who keep multiple apartments across buildings off the market to rent through Airbnb. “We are primarily concerned about rent-stabilized units being warehoused by landlords [through Airbnb],” said Rolando Guzman, a deputy director with St. Nick’s Alliance, a North Brooklyn nonprofit that works in housing advocacy. “We don’t have an issue with a property owner renting a room to subsidize their mortgage,” he said.

To fight against the bad actors, Airbnb implemented a “One Host, One Home” policy, in which hosts are required to put all their home listings at one, discrete address. And under New York State Law, the homeowner must be present while renting. But a 2018 report by the School of Urban Planning at McGill Institute found 87 percent of entire-home reservations to be illegal under New York law, which means that 66 percent of rental revenue ($435 million) and 45 percent of all New York Airbnb reservations in 2017 were illegal.

To have better access to hosts, the City Council is crafting a bill to require online home-sharing companies to provide the Mayor’s Office of Special Enforcement with the addresses of their listings, which Airbnb plans to oppose.

In Brooklyn, Dandapani notes, Airbnb has been able to tap into markets the hotel industry cannot. “Neighborhoods have not had hotels for a couple of reasons,” he said. “They were zoned residential, and when zoning changes were, and are, allowed, the mushroom growth of Airbnb’s illegal listings preclude the development of hotels, which typically requires a three-plus-year development horizon.”

The Effect on Traditional B&Bs

As Airbnb threw the hotel industry into defense mode, it sent Brooklyn’s bed-and-breakfast operators into total confusion. Don M., who asked that his last name not be used, opened a bed and breakfast ten years ago in Park Slope, when B&Bs operated in “a gray area,” he said. (New York City is one of the only major U.S. cities without a regulatory framework for the business model.)

“As long as none of the neighbors complained, or we weren’t putting anyone in danger, the city didn’t worry too much about our operations,” he said. “We’d been operating fine for all these years. And then, along comes Airbnb.”

The recent Airbnb crackdown left B&B owners unsure where they stand with the city, especially after the highly publicized by the Office of Special Enforcement of the Bed-Stuy brownstone where Spike Lee’s Crooklyn was filmed, a B&B not listed on Airbnb.

That news contributed to the decision by Don M. to temporarily shutter his business. He’s counting on separate legislation introduced at the request of Borough President Eric Adams, to provide relief and protections to entrepreneurs operating B&B operations within their homes.

While Airbnb doesn’t plan to support the City Council bill requiring the company to disclose addresses to the Office of Special Enforcement, it has thrown its support behind legislation introduced by Brooklyn Assemblyman Joe Lentol, of North Brooklyn, to amend the multiple-dwelling law, which prohibits rentals of fewer than 30 days in New York City apartment buildings unless the owner is present.

“I got flak for drafting that bill with Airbnb,” Assemblyman Lentol told The Bridge. “But the genesis of the bill is because my constituents rely on home sharing to supplement their income,” he said. “[Airbnb] is here to stay–they’re not going anywhere,” he added. “So why not legitimize it?”

What Do the Numbers Say?

Murray Cox, a community activist living in Bed-Stuy who is behind the independent website insideairbnb.com, doesn’t think the bill does enough. “I mean, it was written by Airbnb,” Cox said. He believes the city should pass laws closer to those in San Francisco, which limit home rentals by absent tenants to 90 days per year–though owners can rent them year-round if they live there–and compels Airbnb hosts to register with the city. As for the 90-day law, Cox said, “Lentol’s bill doesn’t do that.”

A report released in May by Comptroller Scott Stringer found Airbnb responsible for nearly 10 percent of citywide rent-price increases between 2009 and 2016. In Greenpoint and Williamsburg, according to the report, average rents increased by $659 between 2009 and 2016, of which $123 was attributed to Airbnb’s growth. Stringer’s report, however, was rebutted by the firm that had originally gathered the data, saying that it had been misconstrued.

While the report contended that Airbnb is “exacerbating NYC’s affordability crisis,” Airbnb hosts argue that it fosters stability among homeowners in changing neighborhoods. “Gentrification has already been going on in Bedford-Stuyvesant,” said Richelle Burnett, a lifelong Bed-Stuy resident who rents out the top floor of her brownstone through Airbnb and has become a vocal advocate of home sharing. “One of the ways people are staying in the community is Airbnb.”

“I am a regular New Yorker, but I cannot afford my house without Airbnb,” said Evelyn Badia, a Park Slope host who’s turned her home-sharing expertise into a business. “I’ve been in my house for 14 years, in the neighborhood for 23 years. I’m Latina. If I cannot afford my house,” she asks, “Who do you think will move in?”

Cox challenges the narrative of who benefits most from Airbnb. His website published a report last year that found across all 72 predominantly black New York City neighborhoods, Airbnb hosts are five times more likely to be white. The report also noted the loss of housing and neighborhood disruption due to Airbnb is six times more likely to affect black residents, since the demographic composition of these neighborhoods overall is 14 percent white and 80 percent black.

“Airbnb’s messaging is that this is good for working-class residents,” said Cox. “The data tells a different story.”

Emily Nonko is a Brooklyn-based writer whose work has appeared in the Wall Street Journal, the New York Observer, Curbed and other media.

 


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