How much of an impact are short term rentals on the SF housing crisis?
(click on the image to get a larger version with more details)
(click the image to get a larger version with more details)
Something about the discussion of the housing crisis has always bothered me. We’ve had a housing crisis for years. How can Airbnb be a factor in the housing crisis when it was founded so many years after we had a problem? Proposition F is going to take away the ability for a lot of people that live in their homes to rent out parts of it for additional income that in many cases, will allow them to stay in their home instead of sell it and leave San Francisco. If we take that away with Proposition F, it better actually address the problem of the housing crisis, or we’ve just done irreparable harm to bunch of SF residents for no good reason.
So I looked it up, and it turns out that there’s no way, even if the Chronicle undercounted by a factor of 300%, that Prop F is going to do anything for the housing crisis. But it will 100% definitely hurt condo/homeowners who want to rent out their extra rooms for additional income, many of whom will need it to stay in SF.
When I started talking about this with friends, I got a number of reactions:
“Omigod that number can’t be right. I live in between two airbnbs that are rented out full time.”
I don’t think that a personal anecdote is a better statistical basis than an independent study. Your experience is important, but it doesn’t trump research. Also, those full time rentals are illegal under SF law. You can’t make them any more illegal. We ought to be pressuring the city to crack down more on them, not passing new propositions.
“I just looked on Airbnb now and there’s a lot more than 352 listings there for SF.”
When you look at airbnb or vrbo’s listings for San Francisco, you’re looking at a list of the following:
- Units that are illegally being rented full time without a resident in the home;
- Couches that don’t count as a housing unit and don’t impact the housing crisis;
- Extra bedrooms that someone is renting out some of the time that don’t impact the housing crisis;
- Full units that someone is renting out when they happen to be out of town, that don’t impact the housing crisis; and
- All sorts of listings for people who took the time to make a listing, but don’t actually follow through with renting because they don’t need the money at this moment. These, of course, don’t impact the housing crisis.
You can’t assume 1,000 listings on Airbnb means 1,000 units removed from the city’s supply.
The Chronicle study tried very hard to differentiate between permanent removals from the housing market and temporary rentals, which is why their story came up with a number that’s a lot lower than the total number of listings.
I use airbnb when I travel to a large city because my budget doesn’t allow hotels. I always have to book 4 or 5 times before I finally get something because there’s so many listings that don’t pan out when I try and book them.
“If we just ban short term rentals from the city, people will stop being evicted. Have you seen the evictions graph? It goes up at the same time Airbnb became more popular.”
Ugh. You know what also went up at the same time evictions went up? Market rate rent. Illegal evictions have been with us a long time, and when a landlord compares a $1,000 rent controlled 1 bedroom apartment with the same apartment rented at market rate of $2,500+, it’s easy to see that they would want to illegally evict people. They don’t need Airbnb as a justification.
Also, humans are terrible at this sort of analysis. Just look at this graph that correlates math doctorates and uranium stored by power plants from “Spurious Correlations“. These two things don’t necessarily have anything to do with each other, but they both happened at the same time, they must be related!
“We have to do something to support housing advocates in SF. They’re desperate.”
“The hotels are behind the campaign for Proposition F. We should vote against it for that reason.”
“The CEO of airbnb is an asshole. He’s hired someone so evil Karl Rove admired him.”
We shouldn’t be legislating through propositions, but since we have them, we should judge them on the merit of their ideas, not the people for or against them.
I, by the way, agree with many that the CEO of airbnb is probably an asshole based upon interviews with him I have read. There’s no way he can’t understand that his business has the potential to worsen housing problems in cities that already have them. He’s lying to us, his employees, and probably lying to himself.
But we shouldn’t make laws that materially hurt one group of citizens just to make another group of citizens feel better. And we shouldn’t pass laws that punish one set of citizens because the CEO of a related company is a jerk.
In general, I hate propositions. You take a bunch of busy people with no background in law or policy and ask them to surgically edit the legal code and foresee all the consequences, positive and negative. We’re entirely unqualified to be making these judgments that have such long term ramifications in an “all or nothing” scenario. It’s a terrible governance structure.
“You don’t care about people. You just want to make more money.”
My family has a house in the Inner Sunset we bought in 2007. Our kids go to public school here. We almost lost it in after 2008 when the economy collapsed, we both lost our jobs, just had our second baby, and stared into the abyss of double unemployment. If Airbnb had been a thing then, you bet we would have rented out a room in our place short term. It’s about double the money we can get from a long term rental, and we can still keep the room free to help relatives stay when they come to SF on a small budget.
Even now, our consulting work (mostly for nonprofits and trade associations) isn’t that lucrative and every December we hold our breath to find out if we’ll have work for the next year. We’ve made it so far, but we’ve had some very nervous winters. I’m happy to have a discussion about having me lose that part of my safety net in exchange for making a material difference in the housing crisis, but Proposition F isn’t it.
Most importantly, I’m very disappointed in people who don’t own a home or a condo and are willing to just throw me under the bus (for a worthy cause) without actually doing any research into the actual impact here. I’ve lost friends who had to move out of SF to the housing crisis already, as have we all. And if there was a reasonable chance Prop F would keep that from happening again, I would support it. But it won’t. But the people who vote for it are expressing their frustration.
There are solutions to the housing crisis, but none of them are easy. And Proposition F is about as far away from a solution as you can get.
“We have to do something, the real core of San Francisco is being driven out by higher housing costs! All these newcomers have no love for the city and it will lose its charm.”
Inevitably, every conversation about this topic ends with someone pointing out that they have been here longer than you. It’s like the Godwin’s Law of discussions of housing in San Francisco. The teachers in my school, the firefighters that cover my street, the people that make coffee or wait tables, it’s getting very hard to afford for them to live anywhere near the places they work.
But Proposition F isn’t going to make that any better. And when people point out that “True San Franciscans” can’t afford to live here anymore, I wonder who came before them that was displaced when they paid a slightly higher rent than they did? I wonder who anointed them to decide who gets to stay in San Francisco? Which of my friends have made the “cool” cut and they think should be allowed to stay?
Sometimes when I hear these discussions and someone takes a “San Francisco Nativist” position, I fear I’ve walked into a Donald Trump rally.
Cities, all over the world, are getting more expensive. I’m all for having SF create a plan to address that and see if we can do what other places can’t, but Proposition F is not that plan.
BOTTOM LINE: Proposition F does nothing to address the housing crisis, but will hurt a number of homeowners, who might then also become victims of the housing crisis when they have a life change and can’t rent out a room in their OWN home to help make ends meet. It’s a terrible idea. You should vote against it.
Disclosure: I don’t work for Airbnb or any entity that works on the sharing economy. Though honestly, that shouldn’t matter when you’re studying numbers.