San Francisco-based start-up Airbnb might be adding – if ever so slightly – to high city rents and home prices, according to a recent study.
The report by the Economic Policy Institute (EPI) concludes the home-sharing platform pressures already tight housing markets – and even a relatively few units in a community can drive up home and apartment prices.
Josh Bivens, research director at EPI and author of the report, said Airbnb had a small but measurable effect on home prices in other cities and likely in the Bay Area. "They push up home prices," Bivens said. "It's pushing up rents."
Airbnb countered that it creates income for homeowners and taxes for municipalities. It criticized the studies for flawed data and poor assumptions.
Sign Up and Save
Get six months of free digital access to the Bradenton Herald
"Airbnb has worked with hundreds of governments around the globe to develop new regulations to regulate and recognize home sharing as well as to collect and remit hotel and tourist taxes," the company said in a statement. "Governments are eager to find a solution that creates economic opportunity."
The study comes as lawmakers debate causes and solutions for the Bay Area housing shortage threatening the region's strong economy.
Airbnb has come under more scrutiny by researchers and public officials grappling with the crisis, even as the company anticipates going public and expanding its reach.
Apartment prices in the Bay Area rank among the top in the nation. In San Jose, a typical two-bedroom rents for $2,630, an increase of 3 percent from last year, according to Apartment List. The median price for a two-bedroom in Oakland is $2,240, down slightly from last year, and in San Francisco its $3,096, up 1.8 percent.
The study released in January by EPI, a progressive think tank, echoed other academic surveys based on public data examining Airbnb's effects on housing markets. The EPI study looked at benefits and costs of Airbnb and argued the company should pay more taxes and face more local regulation.
Airbnb settled a suit in 2017 with the City of San Francisco over tighter regulation and registration of home sharing hosts.
Bevins cited a study that suggested Airbnb rentals increased the amount of rent paid by a typical New York City apartment dweller by $384 a year, or 1.4 percent, between 2015 and 2017. Other researchers found doubling of Airbnb activity in a small New York neighborhood boosted home sale prices between 6 and 11 percent.
David Wachsmuth, research chair in urban governance at McGill University in Montreal, said other researchers are coming to similar conclusions about Airbnb's upward pressure on housing prices.
Wachsmuth found that between September 2014 and August 2017 in New York City, Airbnb contributed to the loss of as many as 13,500 units from the long-term rental market. The platform also sped up gentrification in some historically black neighborhoods, he said.
Wachsmuth said several studies have found that Airbnb has increasingly become a competitor for long-term rentals, as commercial operators on the platform convert more apartments into online rentals.
Companies managing multiple short-term rentals, Wachsmuth said, are "a growing share of the pie in the Bay Area."
Airbnb criticized the studies for flawed data and assumptions and said several were funded by the rival hotel industry. It said the New York City housing market is different from the Bay Area.
The company said it has worked with local governments and paid taxes in more than 23,000 jurisdictions since its founding in 2008. It pointed to an Airbnb host's ability to earn money and be a "means to pay their bills and avoid eviction or foreclosure."
The company said another study, funded by the hotel industry, found Airbnb leases will raise the median rent in New York City just $33 during the next year.
The company has also supported various local and national initiatives to fight homelessness and reduce housing construction costs.
Steve Levy, senior economist at the Center for Continuing Study of the California Economy, said the main factor driving higher rental costs is lack of supply. The region has failed to build enough apartment buildings – and homes – for years while the Silicon Valley economy has boomed, he said.
"Rent increases are the direct result of the shortage," Levy said. The high cost of land, zoning requirements and fees has made it difficult for builders to add high-density housing in key corridors, he said. "It doesn't pencil out."