FiveThirtyEight: Airbnb Probably Isn’t Driving Up Rents Much
Data, data everywhere, but what are we to think?
A major consequence of the revolution in data collection is the rise of the data journalist – writers using tables of statistical data to tell useful stories in (hopefully) plain English.
What we do with these narratives is up to us, as is the decision of where we get them from. The leader in this kind of journalism is likely FiveThirtyEight.com, creation of Nate Silver, a statistical analyst and writer who moved from the world of baseball statistical analysis into electoral politics. Today, FiveThirtyEight.com also covers business issues, starting by counting some kind of event or transaction and extrapolating from there.
Not just yet, says Stulberg:
[A] FiveThirtyEight analysis of Airbnb booking and revenue data provided by consulting firm Airdna gives the most rigorous look to date at how many units Airbnb could be taking off the rental market nationwide. It shows that Airbnb’s impact is probably still small in most cities, but it also shows that a disproportionately large share of the company’s revenue comes from the listings that most worry its critics — homes that are rented out for a large portion of the year. That could give the company an incentive to focus on increasing such listings as it grows — something some experts believe may already be happening.
Airbnb disputed the analysis but declined to provide its own data.
Because Airbnb has developed from its origins as a site matching travelers to spare rooms into a site that includes so-called commercial listings of whole units rented out full-time, the economic impact is worth looking at. Sharing economy technologies tend to be very disruptive in their effect upon established industries. Airbnb commercial listings, according to the piece, add up to only one tenth of total listings but account for over a third of host’s revenue. With that kind of balance on display it would be fair to assume that traditional apartment inventory in certain markets could be lost to the general market in the chase for those revenues.
On the other hand, the balance between “commercial” Airbnb listings is very uneven between markets. West coast towns such as Portland, OR and Los Angeles are where nearly half of all cash spent by Airbnb travelers goes to commercial hosts. Meanwhile, NYC shows about only 30% of the same kind of spending.
If apartment inventory trends in any of the top 25 markets in the US is of importance to you, check out the rankings in Stulberg’s Airbnb piece here.