Who Really Runs the Airbnbs?

Outside investors buying properties and turning them into full-time, short-term rentals are pricing locals out of the market.
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Neon lights in the French Quarter in New Orleans. (Photo: Jorg Hackemann/Shutterstock)

Neon lights in the French Quarter in New Orleans. (Photo: Jorg Hackemann/Shutterstock)

When you travel, the option to stay in a private home instead of a hotel might seem like a nice idea. Your experience of the city might be a little more authentic, maybe you’ll meet a local, and you can keep your money out of the hands of giant corporations. It’s a tiny way to fight the shrinking of the middle class.

These options, though, may not be a panacea. After discovering that his Brooklyn neighborhood had 1,500 listings on Airbnb, Murray Cox decided to take a closer look. How many residences now invite tourists? How small scale were the profits? Did the money really go to locals?

New Orleans wants to know the answers to these questions. The city has been hit by what nola.com reporter Robert McClendon calls an “Airbnb gold rush.” The city currently has about 2,600 rentals on Airbnb, plus another 1,000 or so on VRBO.com. This has sparked a heated debate among residents, business owners, and politicians about the future of the practice.

So, Cox jumped in to give us the data and figure out where the money is going.

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Are Airbnb hosts living in the spaces they rent?

Cox found that they generally are not. Only 34 percent of rentals are for rooms or shared rooms; 66 percent of listings are for an entire home or apartment. More than two-thirds (69 percent) are rented year round. Almost half of all hosts operate at least two rentals.

These numbers suggest that your modal Airbnb host doesn’t live in the home they rent out. Some may actually live in another city altogether. Others are using Airbnb as an investment opportunity, buying homes and turning them into full-time rentals.

What’s the downside?

Locals are complaining about deterioration in the sense of community in their neighborhoods. It’s difficult to make friends with your neighbors when they turn over twice a week. Tourists are more likely than locals to come home drunk and disorderly, disturbing the peace and quiet.

And they are pricing people who actually live in New Orleans out of the rental market. Short-term renting offers owners the opportunity to make four or five times the amount of money they could make with a long-term tenant, so it’s an economic no-brainer to sign up for Airbnb. But, as more and more people do so, there are fewer and fewer places for locals to live and so the supply-and-demand curve increasingly favors owners who can jack up long-term rental prices.

So, when you give your money to an Airbnb host in New Orleans, you might be giving someone extra money to spend on beignets and chicory coffee, but you might also be harming the residential neighborhoods you enjoy and the long-term viability of local life.

This post originally appeared on Sociological Images, a Pacific Standard partner site, as “Who Really Runs the Airbnbs?"

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