Airbnb and Gentrification Through the Sharing Economy

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* Working Paper: Airbnb and the Rent Gap: Gentrification Through the Sharing Economy. By David Wachsmuth and Alexander Weisler. School of Urban Planning, McGill University July 4, 2017



"Airbnb and other short-term rental services are a topic of increasing interest and concern for urban researchers, policymakers and activists, because of the fear that short-term rentals are facilitating gentrification. This article presents a framework for analyzing the relationship between short-term rentals and gentrification, an exploratory case study of New York City, and an agenda for future research. We argue that Airbnb has introduced a new potential revenue flow in housing markets which is systematic but geographically uneven, creating a new form of rent gap in culturally desirable and internationally recognizable neighbourhoods which have generally already been subject to extensive gentrification. This rent gap can emerge quickly—in advance of any declining property income— and requires minimal new capital to be exploited by a range of different housing actors, from developers to landlords, tenants and homeowners. Performing spatial analysis on twelve months of Airbnb activity in the New York region, we measure the amount of rental housing lost to Airbnb, measure new capital flows into the short-term rental market, identify neighbourhoods whose housing markets have already been significantly impacted by short-term rentals at the cost of long-term rental housing, and identify neighbourhoods which are increasingly under threat of Airbnb-induced gentrification." (