01 Nov Guest opinion: Airbnb isn’t to blame for S.F.’s high housing costs
Short-term rental bans are not only ineffective at lowering housing costs, they actually impose severe limitations on the residents who have to endure the high cost of living in those cities.
by Steve Shur // San Francisco Business Times
San Francisco and the Bay Area, home to billionaires and increasingly expensive housing, is divided over the cause of its affordable housing crisis as homelessness intensifies in the area.
The Council for Community and Economic Research recently released a report ranking the most expensive places to live in America, with San Francisco coming second to New York. As the association representing the world’s leading short-term rental (STR) platforms — including VRBO, Airbnb and others — we could not help but notice that the cities with the highest cost of living have also enacted bans or severe restrictions on STRs over the past several years.
It’s not a coincidence, and not for the reasons you might think.
In every major city where STR policy has been or is being debated, there is the inevitable accusation (usually without supportive data), that STRs cause a lack of affordable housing and that their existence has increased the cost of housing for the city’s residents. As I like to point out to lawmakers, places like San Francisco, Honolulu and New York City were expensive places to live long before Airbnb ever existed.
To suggest that STRs are the cause of a higher cost of living is preposterous. But that has not stopped the STR opponents (read, the hotel industry) from levying such accusations. So, what’s the real story and supposed link between high housing costs and STRs?
The real story is: The percentage of homes made available for STRs compared to the total number of housing units in a given market is barely measurable (it’s below 1% in most big cities).
San Francisco passed perhaps the most restrictive short-term rental policy in the country, making it legal in an owner’s primary residence only. But this ban on second home rentals has had little to no impact on affordable housing. San Francisco has 392,038 housing units. In January 2018, Airbnb had 4,191 listings in the city. For those keeping score, that is 0.0107 of the housing stock, or just over 1 percent. San Francisco is No. 2 on the list of most expensive places to live in America. Short-term rentals are not the problem. The need for more housing and more affordable housing is the problem.
Short-term rental bans are not only ineffective at lowering housing costs, they actually impose severe limitations on the residents who have to endure the high cost of living in those cities. STR bans, limits and restrictions inhibit homeowners from being able to earn extra income that helps them afford to stay in their homes and get by in high-cost communities. In a perverse twist, cities that have imposed these STR bans, limits and restrictions in the most expensive places to live are actually harming the very citizens they purport to protect from the “scourge” of short-term rentals in the community.
The overwhelming majority of homeowners participating in short-term rentals rely on that extra income to maintain a household, fix up a house to improve the community, or just be able to afford to get by. The hotel lobby’s narrative is that unscrupulous real estate investors are scooping up housing and kicking out permanent residents in the name of profit. This is the story they want you to believe. This is the story they have told city lawmakers as they deliver their PAC checks. But it’s a false narrative.
High housing costs are dream-killers for millions of Americans. These costs inhibit their ability to save for the future, maintain a high standard of living and treat their families to a better vacation. Short-term rentals are not the problem. The data is in — big cities that have enacted bans or limits on short-term rentals are still at the top of the “most expensive places to live” list. City leaders need to have the courage to reject the hotel lobby’s claims and begin to look at the real cause of high housing costs while preserving their own citizens’ ability to earn some extra income.
Heck, the guests staying in those short-term rentals may even spend some money while they are in town, generating extra tax revenue for cities that they can use to pay for more studies on how to reduce the high cost of living.