The City of Los Angeles has faced housing affordability issues for many years. Airbnb’s Los Angeles Housing and Vacancy report examines several issues behind the long-standing crisis, including, most importantly, the lack of housing development to keep pace with the city’s population growth. The report also examines the long-standing vacation rental market in LA, which makes up a tiny percentage of the city’s housing stock; and the even smaller percentage of the city’s housing stock that participates in home sharing via Airbnb.
Key findings include:
1. The scale of Airbnb activity is too small to be a significant driver of housing prices.
Airbnb’s booked entire home listings represent a tiny fraction (0.82%) of LA’s housing units. Frequently booked entire home listings (so-called full-time listings) represent 0.18% of LA’s housing stock (2,562 units in 2015 out of 1.45 million housing units in Los Angeles).
2. LA’s longstanding and growing vacation rental (VR) market, itself a tiny portion of the LA housing market, is 10 times larger than the scale of so-called full-time Airbnb listings.
Since 2005 — the earliest available Census data — both the number and proportion of VR units have increased annually, well before Airbnb ever entered the Los Angeles market. In 2015, vacation rentals represented 0.79% of the overall housing market, and full-time Airbnb listings represented less than a tenth of the VR market.
3. Just as the Legislative Analyst’s Office has reported, growing the Los Angeles housing stock by tens of thousands of housing units is the only real way to curb rising housing prices and stabilize vacancy rates.
Both the California Legislative Analyst’s Office (LAO) and the Mayor of Los Angeles call for tens of thousands of new housing units to close the growing gap between demand and supply, exacerbated by years of underbuilding.
Since 2011, population growth has increasingly outpaced housing growth in LA. Correspondingly, vacancy rates have decreased and housing prices increased.