By CultureBanx Team
- A 10% increase in Airbnb listings led to a 0.76% increase in home prices
- Only 43% of black people owned homes in 2017
Travellers around the world love Airbnb for its affordable rental options and have helped the company reach a $30 billion dollar valuation. However, there is a link between the concentration of Airbnb properties in a neighborhood, and rising rents and home prices that may make home ownership harder to achieve for African Americans.
Why This Matters: Elevated home prices put homeownership out of reach for most people, especially black people seeking to get into the housing market.. A study conducted by professors from USC, UCLA along with the National Bureau of Economic Research suggested Airbnb profits from illegal rentals that "cause rent increases, reduce the housing supply, and exacerbate segregation.”
The study also concludes a 10% increase in Airbnb listings led to a 0.76% average rise in home prices. Once we take into account only 43% of black people owned homes in 2017, according to an annual report from the Joint Center for Housing Studies of Harvard University, it’s easy to see why this is part of reason the road has become harder for black home ownership.
Even though the online home rental platform has only been around for one decade, it’s impact on the housing market will be felt for years to come. Black homeownership did increase 0.8% points last year, according to the Harvard housing report, this figure is still well below the national average.
Situational Awareness: There are many factors that affect housing markets, and perhaps the growth of Airbnb could also be a result of wider affordability problems. For black people looking to enter the home buying market there are some things working in their favor. Access to mortgages have improved, since lenders and regulators have softened the requirements around down payments, debt levels and credit scores.
CBx Vibe: “Destiination” Desiigner