Airbnb has revolutionized the way people travel and book hotels, in that they don’t book them at all. However, for this ease of use, there is also a more harmful side that takes place mostly in big cities with limited living spaces. The best example of this problem takes place in New York City, which is currently in the midst of a housing value boom, everything rising in price due to the obvious reason of “demand, but no supply”.
Airbnb is a website that allows people to create listings for their homes to be used for a night or three, much like a hotel, except with individual people. Used like this, there is no issue, but what about when people start stockpiling buildings and apartments and prefer using them to rent as an Airbnb over renting them to actual residents of the city? It creates a housing shortage while also spiking the rents up higher than they normally would be.
The key factor involved in this problem is denying long-time residents the ability to move or rent in favor of those visiting for a short while. The profits and turnover involved are such as to pay more in the long-run. What makes this problematic is that New York City’s Multiple Dwelling Law actually doesn’t let people use these spaces for things like Airbnb. Most people ignore this, therefore creating fewer apartments for rent, and creating a trend of buying property just to rent it out on Airbnb daily, instead of using the apartments for their intended purpose.
The “illegal hotels” issue pops up when people that own buildings don’t rent to renters but rent it on the free market every day. The artificial rent increases due to illegal listings directly fight against what the city has tried to do to keep rents down, which is the rent stabilization program. It affects the neighborhoods most vulnerable to gentrification, seeing as how now cheap property can be used to make money that wouldn’t be able to be made had the buildings been used as intended.
It is undoubtedly a problem that the city is trying to fight, most recently fining a few operators of illegal hotels in excess of 1 million dollars.