Airbnb driving up housing $$ for everyone
Americans have been on a vacation binge since the easing of COVID-19 restrictions. In particular, the vacation rental company Airbnb is thriving. Late last year, the company posted its highest-ever profits.
Meanwhile cities are seeing rising rents, unaffordable home prices, and increased homelessness. Authorities are now linking these crises in part to Airbnb — and some now are passing strict regulations.
Just as companies like Uber were once touted as a way for working people with cars to earn a little extra spending cash, Airbnb offered the promise of supplementary income for those with an extra room or converted garage.
I’ve rented several Airbnb homes over the 15 years since the company was founded. In the early years, staying in other people’s houses felt like an act of rebellion against corporate hotel chains. The privacy, convenience, and often lower cost enabled tourists with tighter budgets to enjoy family vacations that otherwise might have been unavailable.
Now, however, the market is increasingly dominated by a small number of corporate “hosts” and professional property managers — wealthy elites and corporate entities that scoop up large numbers of properties and turn big profits by renting them out to travelers.
And that’s driving up housing costs for everyone.
Stephanie Synclair, a 41-year-old Black mom from Atlanta, recently made the news for becoming a home-buyer — not in her hometown, but in Palermo, Sicily.
In spite of having a budget of $450,000 — no small sum — Synclair had no luck buying a home in Atlanta, where properties are among the most overpriced in the nation. Atlanta’s
housing market is dominated by investors and cash-rich corporations who scoop up practically every home listed at $500,000 or less, many of which are then transformed into Airbnb listings for tourists.
So Synclair now plans to retire in her $62,000 home on the other side of the planet instead.
A 2017 study of New York City by the watchdog group Inside Airbnb concluded that the Airbnb model also fuels racism in the housing market. “Across all 72 predominantly Black New York City neighborhoods,” the group found, “hosts are five times more likely to be white.” But the “loss of housing and neighborhood disruption due to Airbnb is six times more likely to affect Black residents.”
To curb such inequities, New York City, which already had strict rules about short-term rentals and subleases, passed a law in 2023 requiring Airbnb to ensure that hosts obtain permission to rent out housing. If it fails to do so, both the host and the company are hit with hefty fines.
While this means potentially higher hotel costs for out-of-town visitors, it could also free up rentals for long-term residents.
A 2019 Economic Policy Institute study pointed out that “Airbnb might, as claimed, suppress the growth of travel accommodation costs, but these costs are not a first-order problem for American families.” What is a first-order problem is affordable housing.
While regulating Airbnb will not mitigate all economic injustices facing Americans it certainly will move the needle in the right direction.
Sonali Kolhatkar is the host of “Rising Up With Sonali,” a television and radio show on Free Speech TV and Pacifica stations. This commentary was produced by the Economy for All project at the Independent Media Institute and adapted for syndication by OtherWords.org.