Is Airbnb driving up rents? Spain’s competition commission says no
A new report from the CNMC finds mostly positive effects of the online platform’s model, in contrast to studies carried out across the Atlantic
Just a week ago, Spain’s National Commission on Markets and Competition (CNMC) announced that it would be challenging the decision of the cities of Madrid, Bilbao and San Sebastián to limit the activity of accommodation websites such as Airbnb. And this week, in a report published on Monday, the watchdog – an autonomous public entity that “promotes and defends proper functioning of all markets, in the interest of consumers and businesses,” according to its website – released a report in defense of the accommodation platform’s model.
Perhaps most striking of all is the CNMC’s claim that Airbnb has not pushed up the price of housing
Lower costs for those seeking short-term rentals; a chance to earn money for owners; a dynamic effect on the economy given the greater competition; the empowerment of the consumer… These are just a few of the pros that the CNMC has found thanks to the boom of sites such as Airbnb and Homeaway.
The regulator only sees “possible” cons, such as an increase in noise and disturbances for neighbors. But even these elements are played down in the report.
Perhaps most striking of all is the CNMC’s claim that Airbnb has not pushed up the price of housing, whether in terms of rents or purchases. “There is no conclusive evidence,” states the text, “although if there has been a general rise of house prices in Spain in recent years, this is due to a confluence of economic factors. […] No evidence exists of a direct and exclusive relationship between the supply of tourist housing and property prices.”
The CNMC report dedicates just a page to the cons of the Airbnb model, with four pages listing the benefits. The “innovation” of these digital platforms, the report says, has brought a series of advantages. These include, the text states, a greater range of accommodation for users, and as such lower prices; better information for consumers; new income streams for property owners; and the promotion of tourism, with a “positive effect for local businesses.”
One of the articles warns of the “hotelization” of entire buildings
In contrast to the CNMC’s findings, three reports from the United States and Canada have found direct links with the Airbnb boom and the rise in house prices, as well as the expulsion of low-income residents from neighborhoods in cities such as Los Angeles and Boston.
With the very direct title “How Airbnb Short-Term Rentals Exacerbate Los Angeles’s Affordable Housing Crisis,” researcher Dayne Lee wrote a report in 2016 for the Harvard Law & Policy Review examining the reasons why rents in the Californian city had risen 7.3% in a single year, 2014, forcing households to spend an average of 47% of their income on housing.
The article deconstructs the idea that Airbnb is a platform offering accommodation to “young professionals and artists,” instead warning of the “hotelization” of entire buildings, something that considerably reduces the traditional supply of residential housing.
Airbnb has introduced a new potential revenue flow in housing markets which is systematic but geographically uneven
The text also points out that the majority of apartments offered in Los Angeles are located in the seven most expensive and densely populated districts – areas where rents rose 33% more than in other districts in 2014.
The next article that attacks the central arguments of the CNMC comes from the University of Massachusetts. Entitled “Is Home Sharing Driving Up Rents? Evidence from Airbnb in Boston,” the report, written by Keren Horna and Mark Merantea, seek answers about the effect of Airbnb. The text, which was published last year, concludes that “a one standard deviation increase in Airbnb listings is associated with an increase in asking rents of 0.4%.”
The third article is entitled “Airbnb and the Rent Gap: Gentrification Through the Sharing Economy,” and comes from McGill University in Canada. In the text, David Wachsmuth and Alexander Weisler focus on the case of New York, reaching the conclusion 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 neighborhoods which have generally already been subject to extensive gentrification.” The report also analyses the most vulnerable collectives in New York, who are suffering a growing threat due to the gentrification created by Airbnb.
English version by Simon Hunter.
