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Pro-labor group, Airbnb argue over impact on rental housing

The Airbnb website is displayed on a laptop on April 21, 2014 in San Anselmo, California.
Justin Sullivan/Getty Images
The Airbnb website is displayed on a laptop on April 21, 2014 in San Anselmo, California.

A report released Wednesday from the pro-labor group Los Angeles Alliance for a New Economy finds the commercialization of short-term rentals is exacerbating L.A.'s housing crisis and driving up the price of rent. 

"We boil it down to a pretty simple question of supply and demand," LAANE analyst Roy Samaan said. "When units are not available for rent, the supply of rental units is less and that means prices will have to respond."

But an Airbnb representative said the service has had a negligible effect on rental pricing. In L.A., people sharing a home that wasn’t their primary residence increased rental prices by at most $6 - a third of one percent - over the past five years, according to Thomas Davidoff, a professor at University of British Columbia commissioned by Airbnb to do research

To get to its numbers, Samann said LAANE scraped data from Airbnb's website and combined it with information from Zillow and the U.S Census Bureau's American Community Survey. 

LAANE said there are 8,400 hosts in Los Angeles but more than 11,410 units listed for rent - meaning many hosts have multiple offerings. What's more, LAANE found 89 percent of revenue from Airbnb goes to entire apartment buildings and rentals put up by professional management companies.  

The group said landlords have removed about 7,795 rental units from the Los Angeles housing market over the past three years. In a market labeled the least affordable in the country, Samaan said that's a big deal. 

"We're looking at about seven years worth of housing stock that is now being converted to tourism stock," Samaan said.

Airbnb counters with its own research that found its service helps thousands of renters in L.A. make ends meet. It said 8 out of 10 people who use the site to offer short term rentals in Los Angeles, are, in fact, sharing their home. The popular short-term rental app did a survey of local hosts to get that data.

"I don't think there's almost any way you can use a reasonable methodology to conclude that Airbnb is having a large impact on rents or owner costs around Los Angeles," said Davidoff, the University of British Columbia professor.  "Even if all the units on Airbnb represented a subtraction from the housing stock around L.A., that would be something like a percent and a half increase in rent — but that's a huge overstatement."

The difference is partly semantics: LAANE is looking at revenue - what was actually rented and how often - while Airbnb is looking at who's posting apartments on the site.

And the debate comes as officials around the country are looking into the effect short term rental sites are having on their local economy.

In San Francisco, almost a third of the listings on Airbnb come from people who offer more than one property, according to an analysis by the San Francisco Chronicle. In New York, commercial hosts account for 36 percent of rentals, reports Bloomberg Business. 

Whatever the effect, L.A.'s municipal code prohibits short-term rentals in neighborhoods zoned as residential.

But rather than ban them, Los Angeles Councilmember Mike Bonin said the city is talking to Airbnb to create regulations. This includes collecting occupancy taxes.

Airbnb has already reached agreements to collect occupancy taxes from customers who rent in six cities: San Francisco, Portland, San Jose, Washington D.C., Chicago and Amsterdam. The site passes that tax revenue to those cities.