Rents have increased across New York City, and the reality is that Airbnb could be a cause. Airbnb allows for short-term rentals in apartments and homes across the city, but this, in turn, has led to a hike in rental prices. Why? It takes certain rental units off the market and makes it harder for long-term residents to find a place to live. This increases demand, leading to higher rental prices.
A report on the impact of the company’s process on New York City’s rents showed that if 1 percent of homes in an area were rented for Airbnb, then rates for rent went up by 1.58 percent. This happens for each percent in increases of Airbnb rental units. Estimates indicate that New York City’s renters may have paid an additional $616 million in rent because of the company’s encouragement of subleasing properties.
Airbnb was not happy with this report, stating that it believed that the hotel industry could have supplied the data used by the NYC comptrollers for the research and report. The state is currently looking into regulating short-term rental companies. Airbnb agrees that legal framework allowing renters to make extra money without taking properties off the market because of gaming the system is vital.
Real-estate transactions vary, but renting properties for the sole purpose of renting them back out through short-term rental companies could become a problem in the future for renters. If you are someone who leases a property and want to prevent subleasing, you’ll want to consider adding a no-subleasing clause to any contract with tenants.
Source: USA Today, “Is Airbnb why your rent got hiked? NYC says yes, leading to bitter dispute,” Elizabeth Weise, accessed June 01, 2018