Airbnb housing could be cutting into San Francisco’s rental market, taking as much as 40 per cent of potential rentals off the market in some neighbourhoods, according to a new report released yesterday by the city.
The report calculated that approximately 2,000 entire housing units, or 23 per cent of current available vacant units, have been removed from the housing market because of Airbnb rentals.
That’s a big deal as San Francisco is facing a shortage of affordable housing. Average rents are up 15% from last year, according to stats recently released by real-estate site Zillow, and it’s the most expensive city in the U.S. to rent an apartment, at an average of more than $US3,400 a month, according to real-estate marketplace Zumper.
But Airbnb panned the city’s evaluation of its impact and released a new memorandum of its own to show the money the city could lose from taxes if it adopts a plan to limit the number of days units can be rented to 60.
Airbnb’s memo, released to Business Insider, calculated that the city would lose $US50 million over the next 10 years, or an additional $US416,000 a month. The company regularly pays more than $US1 million a month in taxes it collects from renters.
The dueling releases are the latest back-and-forth in the mud slinging between the company and the city.
San Francisco is still grappling with how to deal with how to regulate short-term rentals after its first attempt at legislation last fall was deemed a failure and unenforceable by San Francisco’s planning department. Of the thousands of units available to rent on Airbnb, only 282 have successfully registered with the city as of May 1.
On Monday, the Board of Supervisors Land Use and Transportation Committee will vote on how to amend the regulation. One proposal from the Mayor’s office puts the cap at 120 days a year for short term rentals. Another option set forward by Supervisor David Campos was to limit short term rentals to a max of 60 days a year and compels Airbnb to release its data to the city.
Is Airbnb hurting housing?
Thursday’s report from the city’s Budget and Legislative Analyst’s office, which was requested by Campos, found the average number of days booked a year to be 58 days. Airbnb, on the other hand, has publicly stated that San Francisco rentals are booked an average of 6.5 days a month or a total of 78 days a year per unit.
Airbnb did not provide the city with data, so the city’s report is based on unofficial web scrapes of the site. The city officials then looked at the rentals and divided them into “casual” users, or renters who are renting out a bedroom occasionally for extra income, or “commercial” users, who are renting their entire apartment with an open calendar and operating like a business.
By taking the commercial count and comparing the numbers to the city ‘s available housing stock, the report concluded that Airbnb does take homes off the rental market — and to varying degrees, depending on the location. Supervisor David Campos argued that if there is a hard 60-day cap, like he has proposed, those units who are renting out entirely for long periods would have to return to the rental market because you couldn’t afford to sustain them.
“In neighbourhoods like the Mission, which has become ground zero for displacement, you see that as high as 40 per cent of the housing stock that could be rented is being Airbnb’ed,” said Supervisor David Campos in an interview. “These are folks that have made a business out of it, and if you make their business illegal, which is what this proposal would do, then they’re going to have to find another business. The alternative to what they would do is basically put their units up for rent.”
However, an earlier report from the city’s Planning Department showed that a “commercial” rental may not be a direct replacement for a rental unit on the market. In an April analysis, the city calculated that a short-term rental would need to be on the market for 257 days to “outcompete residential use.”
An Airbnb spokesperson said that the April analysis “made significantly more accurate conclusions about short-term rentals and the housing market” than the report from the budget analyst’s and ordered by Campos.
“This comes from the same people who want to ban new housing in the Mission, ban home sharing, and make San Francisco more expensive for middle class families,” said an Airbnb spokesperson. “Home sharing is an economic lifeline for thousands of San Franciscans who depend on the extra income to stay in their homes. Supervisor Campos’ proposal would make it even harder for middle class families to stay in San Francisco and pay the bills.”