A group of 9 people rigged up a simple New York City rental scheme that made $5m in revenue by booking illegal Airbnb rentals, reveals a recent Wired report.
The success of this rental racket shows that Airbnb can make life harder for renters in any kind of market.
A stealthy scheme made $5m in a rigid rental market
New York’s notoriously strict rental rules are supposed to ban owners from building short-term rental empires. But, between 2015 and 2019, this rental racket did just that, booking 64k guests in 24k rooms.
The “unlawful hotel operation” flew under the radar of both Airbnb and New York City officials for years using fake host names, highlighting how easy — and how lucrative — it can be to break the rental rules.
In New York, Airbnbs — illegal and otherwise — have directly accounted for a $380 increase in annual rental costs.
Unregulated rental markets are ALSO getting rocked
The Airbn-boom affects different cities in different ways.
In Canada, where rental regulation is generally more loose, 1.5% of the rental supply in the entire country has been devoured by Airbnb.
In Montreal, prices have risen so much that long-term tenants are getting evicted from homes by developers who are jacking up rental rates for short-term rentals.