Here’s something you might not realize: Vacation rental companies, like Airbnb and HomeAway, directly affect the local housing market. It’s no secret that a homeowner can obtain a higher profit by renting on a popular website than by renting to a local resident.
As of June 4, there were 9,608 active Airbnb listings in Miami-Dade County, 81 percent of which were for “Entire Homes.” Studies in San Francisco and New York City concluded that “Entire Homes” on Airbnb are detrimental to housing affordability — especially when multiple “Entire Homes” are tied to one owner.
Miami continues to be one of the least affordable places to live in the country, and online vacation rental companies are only exacerbating the problem. Approximately 35 percent of Miami renters already spend more than half of their household income on housing.
When homes are listed as vacation rentals, those homes are removed from the local housing market — creating an even tighter rental environment and resulting in higher housing costs.
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The biggest impact on housing affordability is caused by owners who list multiple units at a time. The popularity of Airbnb, the largest vacation rental company, provides a lucrative business opportunity for real estate investors, landlords, and property owners who operate in a commercial capacity by purchasing multiple properties and renting to tourists. In June, 62 percent of Airbnb “Entire Home” listings in Miami were owned and managed by these commercial operators.
The impact on housing affordability of a homeowner who advertises one room or unit at a time is minimal. The impact of commercial operators who advertise two, four, 10 or 20 homes at once is inescapable. For neighborhoods on the cusp of gentrification, the loss of even two available and affordable housing options can be devastating.
Several cities have implemented strategic methods to address the impact of vacation rental companies on housing markets. For example, New Orleans adopted a $1 nightly fee per rental and deposited the revenue in an affordable housing fund.
Airbnb supported this nightly fee. A similar nightly fee from all vacation rental platforms is a viable option for Miami-Dade County that can be deposited into the Affordable Housing Trust Fund and used to create and preserve affordable housing in our community.
A minimum of $1 per night from the 9,608 active Airbnb listings in June would have generated roughly $1.7 million based on a six-month occupancy rate. This revenue would help soften the impact on housing affordability and would be a new and steady source of revenue for housing in Miami-Dade County that is not tied to the federal or state budget. Furthermore, it would not place additional burdens on county residents.
The housing crisis affects us all. We, as a community, should recognize exacerbating influences before they become too large to manage. We are grateful that the Miami-Dade Board of County Commissioners (“BCC”) is supportive and interested in adopting a nightly fee. However, Airbnb and HomeAway continue to seek additional changes to proposed vacation rental regulations and are withholding their outright support for a nightly fee in Miami-Dade County until the amendments are agreed to and all other platforms also agree to participate.
Our community's housing concerns need to be a top priority and cannot continue to fall by the wayside. Fortunately, the BCC appears committed to addressing the impact on housing affordability by vacation rental companies.
We must prioritize our community's housing needs, especially when negotiating with companies that are directly impacting affordability and the fabric of our neighborhoods. Tourism brings many benefits to our local economy, but Miami-Dade County must strive to be a place where the people that work here can also afford to live here.
Bobbie Ibarra is executive director of Miami Homes for All. Sabrina Velarde is the organization’s housing program manager.