Airbnb listings in gentrifying New York City neighborhoods are causing higher rent and gentrification, displacing residents and attracting wealthier ones.
It’s a story many New Yorkers are familiar with. After years of eating at their favorite mom-and-pop restaurant or grabbing a coffee at their local bodega, it’s suddenly gone. And in its place is a Chase Bank, a Whole Foods, a Starbucks or some other corporation or fast-food chain.
Gentrification is a massive issue in New York City — increasingly pushing low-income residents, minorities and local businesses out of their familiar neighborhoods as they gradually transform into the “next hottest block.”
People from all over the United States move to NYC hoping to live out their big-city dreams — but the neighborhoods these new residents tend to seek out are gentrified or are at-risk of gentrification. With the influx of these out-of-towners, who tend to be whiter and wealthier than the current residents, further gentrification and displacement occur.
But how do these new residents determine which neighborhoods are trendy and desirable? A 2018 study points to at least one of the perpetrators: Airbnb.
The study, titled “The High Cost of Short-Term Rentals in New York City,” was conducted by David Wachsmuth and other researchers from the McGill University School of Urban Planning. The findings are based on properties in frequent use on Airbnb, which Wachsmuth defined as those available for 120 days and occupied for 60 days. The data is from September 2014 through August 2017, and the study was funded by a “politically influential” hotel workers union, according to Politico.
In the study, it was found that “nearly three-quarters of the population in neighborhoods at highest risk of Airbnb-induced gentrification across New York are non-white.”
To put this further into perspective, a 2017 study by InsideAirbnb found that even in “predominately Black New York City neighborhoods, Airbnb hosts are 5 times as likely to be white.” This is an issue because these white Airbnb hosts, who are new to the neighborhood, are making more money on Airbnb than their Black counterparts, who have likely resided on the block for years. Citing the same study: “White Airbnb hosts in Black neighborhoods earned an estimated $160 million, compared to only $48 million for Black hosts.”
This is worrying because as the Airbnb listings cause desirability to go up in these gentrifying neighborhoods, rent will get higher, causing these Black and low-income residents to be forced to move elsewhere.
Below is a map of some of New York City’s gentrified neighborhoods and their average nightly Airbnb rates, created using data from InsideAirbnb and Furman Center’s State of New York City’s Housing and Neighborhoods. It serves as a visual example of Airbnb’s influence on gentrification, with expensive Airbnb listings scattered throughout the NYC boroughs (Staten Island was excluded from this graphic). Manhattan, already thoroughly gentrified, had the highest average nightly price with the newly-gentrified Lower East Side being priced at $212. Brooklyn is currently undergoing extensive gentrification, with most Airbnb listings showing a “very high” or “moderate” price point.
If a person were to rent out an Airbnb in Lower East Side for a month, it would cost them $6,382. This is a higher rate than what residents pay to rent their apartments. The bar chart below shows that in some of New York City’s most gentrified neighborhoods, staying in an Airbnb listing for an entire month will cost someone more money than traditionally renting.
This disparity in traditional rent and Airbnb listings has caused the median rent in New York City as a whole to rise dramatically, causing problems for long-term residents who can’t afford the higher rent. The aforementioned McGill University study found that median rent in the city increased by 1.4% throughout the study. This brought up the rent by $380, but in more popular parts of Manhattan, the increase was as substantial as $700.
The city is simply trying to keep up with the standard price of Airbnb listings — which has caused some to wonder if Airbnb is causing more harm than good. Not to mention, this increase has significantly harmed communities of color, namely the Black community. The InsideAirbnb report found that “the loss of housing and neighborhood disruption due to Airbnb is 6 times more likely to affect Black residents.”
Not only is the price of the listings causing gentrification to explode, but the way the neighborhoods are advertised also has something to do with it. By singling out seven specific gentrified neighborhoods, the word map below shows the most common words each neighborhood was described as. These words, such as “trendy,” “hip” and “hidden gem” contribute to gentrification by labeling these neighborhoods as “trends”: areas for out-of-towners to come and explore.
When these new residents come into neighborhoods like Harlem or Crown Heights, they change the spending patterns of the area, which results in the replacement of small businesses with these tourists’ preferred supermarkets and fast-food chains like Starbucks or Whole Foods. These national corporations make out-of-towners feel at home, and they happily spend their money at these chains instead of at small businesses. This contrasts with locals, who have relationships with their local mom-and-pop shops that persist for years.
Most locals have come to associate Whole Foods and Trader Joes with gentrification. This was exactly the case in 2017 when the proof of gentrification in Harlem came in the form of a brand-new Whole Foods at 125 Street and Lenox Avenue. The neighborhood had been changing for a while, author Angela Helm explains in the Black publication The Root, but with the Whole Foods opening in the middle of Harlem, it was “the final nail in black Harlem’s coffin” (Helm).
“Bye-bye, black Harlem, glad I knew ye,” Helm writes in her story’s opening sentence. “Hello, Whole Foods, I do enjoy your products, but if you can gentrify greens, what chance do we really have?”
This isn’t all speculation either. According to The Washington Post, in a 2015 study by RealtyTrac, it was discovered that homeowners with a property near a Whole Foods “saw an average increase in home value of 34%t” while homeowners with one near a Trader Joes saw “an average appreciation of 40%” (Lerner).
As stated earlier, the story of gentrification has become one every New Yorker is familiar with. Williamsburg and DUMBO are two of the most famous examples of recent gentrification in Brooklyn due to the “trendiness” and “hipness” of the neighborhoods. For Williamsburg, it began in the 1980s, with “artists and musicians fleeing” there for its “dirt-cheap rent” (Demause). It only took a few decades for the neighborhood to welcome hip music clubs and shops, as well as “raising rents and [the] tearing down [of] old buildings” (Demause).
Airbnb’s effect on rent in Brooklyn continues to persist, with Williamsburg and Greenpoint’s rent rising 18.6% between 2009 and 2016, according to a 2018 report from the City of New York’s Comptroller Office.
Unfortunately, it’s all too clear that this pattern will continue throughout the rest of New York City if limitations aren’t put into place. While Manhattan’s thorough gentrification has been years in the making and can’t fully be blamed on Airbnb, the further gentrification of other boroughs such as Queens, Brooklyn and the Bronx could. In order to save New York City’s long-term residents and businesses, a discussion must be had about Airbnb’s role in gentrification and what a possible compromise could be.
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