Airbnb Contributing To Affordable Housing Crisis
Inflation is skyrocketing.
The United States has seen rises in everything, from the cost of eggs to the housing market.
But what about rental properties, especially within the world of Airbnb?
The popular site was founded in 2008 by Brian Chesky, Joe Gebbia and Nathan Blecharczyk. It allows property owners to make money by renting living spaces like houses, condos, apartments and studios for brief periods.
As opposed to the long-term rental industry, where hosts collect rent on a monthly rate, short-term rentals allow investors to capitalize on people’s willingness to pay for short stays.
Airbnb gained traction once it expanded to Germany in 2011 and achieved a milestone of 10 million bookings in 2012. With the support of investors, business skyrocketed in 2015 and again before the pandemic.
Despite its success, the online platform needed help when COVID-19 struck and lockdowns were instituted.With people stuck indoors, the high supply of available renting spaces caused a drop in sales.
Airbnb rental properties were predicted to fall victim to what experts call an “Airbnb bust.”
Coined by Airbnb host Jim Ewing, the term describes a decrease in sales leading to a “downturn in the short-term rental market.”
After lockdown mandates were lifted, investors anticipated that people’s desire to reunite would compensate for losses in revenue. But it wasn’t. The fear and severity of the pandemic exceeded their expectations. Houses were “sitting empty.”
Ewing voiced his thoughts to TIME in 2022, saying, “We had anywhere from 70-80% occupancy every month. This year, we’ve had no one in October and we have no one booked for November…so it’s been extremely slow.”
But, the business has been resuscitated in the last two years. As of August 2023, Airbnb had more than 4 million hosts and 6 million active listings.
However, Airbnb has become an inconspicuous rival for people seeking permanent housing.
As investors usurp properties to profit off short-term renting, less homes are available for long-term renting and mortgaging. And when limited supply meets unlimited demands, prices soar.
To combat this, cities like Miami, New York City and San Francisco have imposed restrictions on Airbnb listings.
Although Airbnb isn’t the sole reason why housing is so expensive, they’ve undoubtedly contributed to the crisis.
