Cities are falling all over themselves to woo Millennial talent, seeing it as key to bolstering their high-tech ecosystems, generating innovation, and spurring economic growth. The recipe for attracting that talent, which I laid out a decade and a half ago in TheRise of the Creative Class (following Jane Jacobs decades earlier), includes fostering the arts and creativity, investing in transit and bike lanes, opening up to diversity, creating denser, more walkable neighborhoods, and building quality of place.
New research by Brookings Institution demographer William Frey takes a close look at the geography of older Millennials, those aged 25 to 34, with a college degree or more. His study paints an intriguing picture of a generation that is more diverse and more widely distributed geographically than the stereotypes would have us believe.
Millennials are the most educated generation in history, but unevenly so. In 2015, 36 percent of Americans aged 25 to 34 were college graduates, up from 24 percent in 1980. There remains an education gap between men and women, and it is widening: 33 percent of Millennial men are college graduates, compared to 39 percent of Millennial women. The racial divide in highly educated Millennials is even more troubling. Seventeen percent of Hispanic and 23 percent of African-American Millennials have college degrees, compared to 43 percent and 62 percent, respectively, of their white and Asian peers.
Contrary to popular perception, Millennials are fairly evenly distributed among urban areas, mature suburbs, and exurbs. However, the cohort in cities tends to be far more diverse in terms of race and ethnicity. Nearly three-quarters (72.3 percent) of Millennials in exurbs are white, and more than half (51.9 percent) of those in mature suburbs are too. But urban Millennials are majority-minority: Nearly 60 percent of them are non-white. As Frey puts it: “Suburban categories get less diverse as distance from the core increases.”
But which places are attracting the most Millennial talent—the recent college grads so frequently stereotyped and mischaracterized in popular media? Is this group really so different from previous generations of smart, young people who migrated to cities?
The map from the study below shows the big picture. In 60 of the largest 100 metropolitan areas, the share of college grads within the total Millennial population ranges between 30 and 45 percent. However, some metros have much higher shares. The gap between the leading and lagging metros on Millennial talent reflects the extreme spatial inequality and polarization that define, and increasingly plague, the United States today.
The top 10 metros for Millennial talent—defined as individuals aged 25 to 34 with a college degree or more—are leading knowledge hubs, plus a sprinkling of college towns. Boston and Madison top the list with a whopping 58 percent of their Millennials holding college degrees. Next in line come San Jose and San Francisco, and then Washington, D.C.
The bottom 10 are mainly smaller, service-dominated or agriculturally oriented metros in the Sunbelt (Las Vegas being the largest and most notable), where the share of highly educated Millennials is half that of the leading metros. Four of these areas are in California, often a short drive from some of the most highly educated and prosperous areas in the world. The economic and cultural divides in that state appear on track to get worse, with so few educated young people in the inland areas and so many on the coast.
But there are some surprises in Frey’s data. Minneapolis–St. Paul and Denver have larger shares of Millennial talent than Seattle and Austin. Educated Millennials make up 40 percent or more of the Millennial population in Pittsburgh, Philadelphia, Baltimore, Nashville, Columbus, Kansas City, and Milwaukee. Conversely, San Antonio, Albuquerque, Boise, Oklahoma City, Phoenix, and Colorado Springs all fall below the 30 percent threshold. Miami and Houston have smaller shares of educated Millennials than Detroit and Allentown, Pennsylvania.
I wanted to see if the trends in these metros pointed to any broader changes in the geography of talent. Was the good showing of metros like Pittsburgh, Baltimore, and Milwaukee indicative of a broader “rise of the rest” in the competition for talented young people?
My colleague Charlotta Mellander ran a basic correlation analysis, comparing Frey’s data on highly educated Millennials in the 100 largest metros to other key indicators of talent, technology, diversity, and density. As always, I stress that these correlations do not indicate causation, but rather point to associations between variables. In fact, the correlates suggest little has changed in the geography of talent in America.
Knowledge, professional, and creative occupations
GDP per capita
Take transit to work
Walk to work
Drive to work alone
Arts and media occupations
Clinton voters 2016
Trump voters 2016
Median housing costs
For one thing, Millennial talent is closely correlated with more general measures of talent. The share of college-educated Millennials is very closely associated with the share of college-educated adults overall and with the share of the workforce employed in knowledge, professional, and creative occupations. Conversely, educated Millennials are less likely to live in working-class areas. Millennial talent is also highly clustered in leading high-tech ecosystems and in more productive, more affluent metros.
Educated Millennials cluster in amenity-rich places. The share of college-degreed Millennials is positively associated with the share of commuters who take transit or walk to work, although the correlations with population size and density are lower than might be expected. Educated Millennials are much less attracted to places where the car predominates, and are negatively associated with the share of commuters who drive alone to work. They also appear to be very attracted to metros with more vibrant arts and culture scenes, being even more highly correlated with the share of the workforce employed in music, arts, writing, design, media, and entertainment occupations.
Although educated Millennials are drawn to places with higher concentrations of LGBTQ people, the question of race is more complicated. Across metros, there is no significant statistical association of educated Millennials with the percentage of the population that is white or black. But the share of college-grad Millennials is positively associated with the share of population that is Asian, and negatively associated with the share that is Hispanic or Latino.
The geography of Millennial talent also tracks America’s red-blue political divide. The proportion of educated Millennials is positively associated with political liberalism and negatively associated with conservatism. It is also positively correlated with wage inequality, economic segregation, and high median housing costs.
Despite some surprises, the geography of Millennial talent fits with the nation’s overall geography of talent, technology, and regional advantage. Even among the younger generation, America remains defined by winner-take-all urbanism and spatial division—forces that not only shape the nation’s centers of innovation and economic advantage, but its deepening political and cultural divides as well.
Walking into Station F, the gargantuan new space in Paris devoted to startups and innovation, feels a little bit like entering a tech office in Silicon Valley. All of the requisite props for “fun” are in place, including vintage-style video game consoles, pool tables, bright couches, and neon signs. There are even potted palm trees for a touch of California.
Station F’s founder Xavier Niel deemed his project France’s “mini-Silicon Valley,” and the new space, located in the city’s thirteenth arrondissement, hopes to exceed and improve upon the success of California’s startup environment. Roxanne Varza, the 33-year-old director of Station F, was herself a Silicon Valley native before coming to Paris and being recruited by Niel to run Station F. Open since last summer, the refurbished train depot is now full to capacity, home to over 3,000 desks and 26 international startup programs. “We have so many requests it feels small,” Varza said of the 366,000- square foot space.
The success of Station F is indicative of what Niel, Varza, and even President Emmanuel Macron hope is a new future for France. Macron has made it a priority to support innovation and entrepreneurship, including projects from overseas. At the opening of Station F last June, Macron gave a speech lauding the entrepreneurial future of France and filmed a selfie urging foreigners to come: “We are here today in Paris in Station F. So if you want to invent, invest and develop your startup, you’ll have to come here,” he said.
According to Varza, a confluence of recent world events—including Brexit, the election of Donald Trump, and skyrocketing real estate prices in Silicon Valley—have paved the way for France’s startup future. “The way people view doing business and entrepreneurship in France has really changed. That’s in part with Station F but also with the official government that is in place and the messages they carry. A lot has coincided very nicely at the same time,” she said.
Niel, Station F’s founder, is a tech billionaire already well known in France not just for his fortune but for his visionary coding school, “42,” located in the north of Paris. Open 24 hours a day, the school is entirely free to admitted students, relying not on textbooks and teachers but on peer-to-peer learning. As the school’s mission describes, “We do not want money to be a reason students cannot attend 42, so we do not charge tuition and students don’t need to purchase devices or books to complete the 42 program.” Open in Paris since 2013, Niel helped launch a sister “42” campus in Fremont, California, in 2016.
This same emphasis on diversity and inclusion is at the heart of Station F, said Varza. “It is not about being Franco-French, it is about being international.” Station F is also trying to foster entrepreneurship and innovation from people with unique trajectories, including those from diverse or under-privileged backgrounds. One of Station F’s most notable efforts on this front is the Fighters Program, which gives a year of free office space, mentorship and support to a select few atypical startups.
The program, announced last summer, received over 200 applications from 27 countries. “We wanted people who maybe even struggled somehow, because those are the people who make the best entrepreneurs,” said Varza. “They’re people who have had to figure their way out, and that’s what being an entrepreneur is about, too.”
Among the thirteen startups selected for the Fighters program are Digitall, an anti-auto theft company founded by Tally Fofana. Before launching his company and joining Station F, Fofana spent time in prison for stealing cars. “This is exactly the type of person we want, someone who is reconverting his life through entrepreneurship,” said Varza. “And who better to build this but him?”
Another one of the startups chosen for the Fighters program is LeadBees, founded by Kevin Besson, a native of French Polynesia. Besson plans to develop his project of building connected beehives in France before taking it back to his country, where he hopes to start a new generation of agricultural products.
Konexio, a startup offering technical training to refugees, is another project among the first cohort of Fighters. The startup is led by Jean Guo and Binta Jammeh, two Americans who first met as students in Paris. “Something that really drew us together and helped spur why Konexio is so important to us is that both of us grew up in immigrant families and so for us, on some level, we understand how difficult it is to leave the only country that you’ve ever known,” said Jammeh. “We saw in our own families some of the struggles they had to go through in terms of mastering the language, of figuring out how the cultural differences work and how to integrate into a new society. Being here in France and working with the populations we work with we understand on some level what it means to give up everything you’ve ever known to start a new life and do something new for yourself.”
Being in the diverse ecosystem of the Fighters program has been instrumental to the growth of Konexio, Jammeh said, both in terms of practical mentoring and networking as well as general encouragement and solidarity among the Fighters. “We’re all from so many different backgrounds and all have incredibly diverse stories. Even the startups we’re working on are from such different domains, but it’s been incredible to be part of the program and see that even though we may be working on projects that are so different there are issues that we all face that tie us together.”
For Varza, the Fighters program is just one example of how Station F is trying to stay ahead of the curve when it comes to diversity and inclusion in the increasingly prominent world of startups and innovation in France. She considers backlash to the Silicon Valley work culture and the #MeToo movement as lessons to be learned from. “We really saw the perverse effect [of people abusing their power] and we want to make sure that doesn’t happen here,” she said. “Entrepreneurship is something we want to be able to take advantage of, but we want the right people to take advantage of it.”
When applied to today’s cities in a non-academic context, urban anthropology provides a kind of “outsider’s perspective” to the dominant fields of urban planning and design. An anthropologist’s brain is one that views the current age through the long arc of humanity; they see the comparison between the best and worst of the human condition, and can balance human needs with human desire accordingly. This leads to an acceptance (and appreciation) of cultural contexts, with communication and co-creation at its core.
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What We’re Following
California, here we come: The Golden State is a smorgasbord of housing challenges. With record housing shortages and inflated costs, cities are grappling with how to absorb both an economic boom and growing homelessness.
Anxiety and absenteeism are on the rise in public schools with large immigrant populations, according to a new UCLA study, and academics are suffering.
Juan Pablo Garnham
Streetsblog USA highlights how cities can build bus bulbs without the wait—or the concrete—thanks to these more affordable snap-in-place platforms by the Spanish-company Zicla. As Angie Schmitt writes, New York, Pittsburgh, and Oakland have experimented with these ADA-compliant plastic bus islands that connect to the sidewalk. It’s a cheap fix to the “sorriest bus stop” problem that Streetsblog has highlighted before, and another tool in the toolkit for improving bus service. Maybe give it a shot if riders fall in love with your pop-up bus lane.
What We’re Reading
How Trump’s Hudson Tunnel snit threatens the national economy (Bloomberg)
Cities around the world are dealing with severe housing shortages and inflated housing costs. But nowhere is housing such a potent political issue as in California, whose unique geography, state policies, and activist culture have combined with a poorly distributed economic boom to create a “perfect storm”—the chosen words of multiple sources for this story.
California is home to more than one-fifth of the nation’s homeless people, and the numbers are continuing to grow. Los Angeles County saw its homeless population
Over the past several years, California has not only produced too little housing, but too little of the right kind of housing. Between 2009 and 2014, the state added 77,000 more households than housing units. The housing it has produced is often located far from jobs and transit, or is too expensive for low and sometimes even middle income people to afford.
“It’s a desperate situation right now,” said Dowell Myers, an urban planning professor at University of Southern California. “We really have to rethink everything.”
Activists and civic leaders from a diverse cross-section of backgrounds are doing just that. Their solutions must redress a long list of historical factors underlying the current crisis, many of which are intertwined in ways that have exacerbated it. The housing policies they pursue in the coming year—including the liberalization of local zoning controls, and new protections for renters—could prove to be trendsetters for the rest of the country, where the term “housing crisis” is becoming increasingly common.
Whether these solutions are put in place, however, may depend on the ability of a new breed of tech-savvy activists to work together with long-established affordable housing advocates against the forces that produced the crisis in the first place.
The rise of Yes in My Backyard
NIMBYism originated in California with the best of intentions. Some of the first people to say “not in my backyard” (NIMBY) were pioneers of the environmental movement, who fought against the development of lands that are now part of the Golden Gate National Recreation Area. Many opponents of new development continued to advocate worthy causes, but some others began to use the state’s environmental protection laws for purposes that had little to do with protecting the environment. Politically powerful homeowners used the broad scope of the state’s environmental review process to invoke aesthetic and quality-of-life concerns about new housing, which often served as a pretext for race and class-based exclusion. These kinds of conflicts are ongoing: In one recent example, residents of San Francisco’s wealthy Forest Hill neighborhood are organizing against the construction of an apartment building for low-income seniors out of fear of “severely drug addicted people” and the mentally ill.
Anti-development preferences were gradually codified into local zoning rules that made it difficult to build denser new housing, especially in wealthy, activist enclaves along the coast. A state constitutional amendment passed in the 1970s protected homeowners from property tax increases on their increasingly valuable (and scarce) homes, incentivizing cities to generate revenues from retail and office development instead of housing. Those areas that remained zoned for denser housing development were often low-income, minority neighborhoods, like San Francisco’s Mission District and Downtown L.A., that have subsequently experienced extreme gentrification.
It was only a matter of time before this self-serving mentality would spawn its antithesis. Affordable housing and racial justice groups had long been fighting many of the adverse effects of NIMBYism, but it took a group of equally well-connected activists to provide a significant political challenge to anti-development homeowners. As super-educated young people poured into the Bay Area during the Web 2.0 era, they became infuriated that their generous paychecks were insufficient to afford decent housing. They saw how special interest groups had formed to systematically block, or at least substantially shrink, as many new developments as possible. If the NIMBYs could institutionalize their efforts, so, too, would the YIMBYs.
YIMBY (Yes In My Backyard) groups are focused on increasing the production of all types of housing, fast. San Francisco Bay Area Renters’ Federation (SFBARF) was one of the first such groups. It quickly drew attention to itself with zany tactics including ironic signs saying “Stop Affordable Housing,” and controversial statements, like when the group’s founder, Sonja Trauss, compared resistance against tech workers living in the Mission to racist housing policies historically leveraged against Latinos.
Still, the pro-housing message resonated. Trauss was featured in last year’s Politico 50 as the face of the budding movement, and is now a serious candidate for San Francisco city supervisor. The YIMBYs’ clownish spirit helped provide visibility for the supply and demand problem that had long been the purview of policy wonks. “The problem is really a simple one,” said Myers. “If you don’t provide housing for rich people, they will take their housing from somebody else.”
One of the most effective ways YIMBYs advocate for more housing is by invoking jobs-to-housing ratios. A healthy ratio is approximately two new jobs for every new unit of housing. Nearly all California metros are way above that sweet spot, according to an analysis of census data by Apartment List; between 2010 and 2015 San Diego had a ratio of 3.9 jobs per housing unit, Los Angeles’ was 4.7, San Francisco’s was 6.8, and the Central Valley metro of Modesto’s was a whopping 11.4.
The tech industry, which has been one of the main drivers of the state’s massive job growth in recent years, especially in Northern California, was quick to embrace the YIMBY movement. Jeremy Stoppelman, co-founder of Yelp, and Dustin Moskowitz, co-founder of Facebook, have become major financial backers of the cause. YIMBYism is in many respects a perfect complement to the tech ethos; it provides a quantitative solution to a societal ill that still manages to feel playful and subversive.
Like the environmental movement and digital revolution before it, the YIMBY movement started in the Golden State and quickly went global—there are now chapters across the United States, as well as in Canada and the U.K. Still, the movement’s vanguard remains concentrated in California, where it is poised to become a major political force in 2018.
A ‘radical’ new housing agenda
The YIMBYs have found their champion in Scott Wiener, who has made housing a top priority since he was elected to the state senate in 2016. Wiener was instrumental in the historic package of 15 housing-related bills passed by the state legislature last year. His contribution to the package, SB 35, expedites the process for building housing deemed critically needed by the state.
But for Wiener, last year’s housing package was simply not enough. “We made a strong start last year, but we have to build on that success to get back on track, because we have a huge crisis on our hands,” he said. This January, he responded with a new package of housing bills, including one aimed at making it easier to build housing for farmworkers, and another to improve city accountability for building new housing. Taken together, these bills would make it easier and faster to produce new housing in California, particularly in high-demand areas that have seen little new housing construction in recent years.
The most ambitious bill in the package, SB 827, co-sponsored by California YIMBY, would essentially rewrite local zoning controls across the state. The bill bans local jurisdictions from imposing certain zoning requirements that mandate parking and restrict density near mass transit and high-frequency bus stops. The idea is both to increase the housing stock, and bolster the state’s public transit services, some of which are bleeding riders. “You have these invaluable assets, major transit investments, where very few people get to live near them, and we want more people to live near them,” Wiener said.
New height limits in these areas would be no lower than 45 feet on narrow streets, and 85 feet on the widest streets. “What you’re going to see is more and more of these smaller apartment buildings, these four, six, eight units—what the Washington Post recently referred to as the ‘missing middle,’” Wiener said.
Who the hell approved this atrocious, neighborhood character crushing, souls wrenching 75’ apartment building in the Sunset and why isn’t the world falling apart? pic.twitter.com/IuUDGTV80o
Supporters of the bill point out that many of the neighborhoods that would be affected already have buildings at these densities from before stricter zoning rules were implemented. Los Angeles, for instance, went from being zoned for a population capacity of 10 million people in 1960, to a population capacity of 4.3 million in 2010. By once again allowing multifamily homes in huge swaths of California’s urbanized areas, SB 827 could ease development pressures on the neighborhoods currently bearing the brunt of new housing construction, which are often less politically powerful areas.
“We need to tear down these exclusionary zoning walls around these wealthier, bougie neighborhoods that fought very successfully to keep development out,” said Victoria Fierce, an organizer for the YIMBY group East Bay for Everyone. “SB 827 takes direct aim at that, and I think that is a radical thing.”
How to protect tenants now
By Wiener’s own admission, even if SB 827 were passed (hearings could begin in March), it would take years to make a significant impact on housing prices. Meanwhile, activists focused on tenant protections and affordable housing are more concerned with addressing the day-to-day impacts of the housing crisis. Most recently, that work has involved fights to expand rent control policies and other tenant protections.
Political will for rent control appears to be increasing, said Aimee Inglis, associate director of Tenants Together. Five California cities—Santa Cruz, Inglewood, Glendale, Long Beach, and Pasadena—have new rent control ordinances on upcoming ballots, potentially adding to the 15 cities with existing ordinances. And Housing is a Human Right, a low income housing advocacy group, is gathering signatures to repeal a state law that prevents rent control from being applied to newer units.
Rent control is viewed by most economists as a highly inefficient policy, and there is a very real concern that expanding its reach could depress housing construction. But there is also increasing acknowledgement that it—or something like it—is a necessary protection in such an extreme housing market. “It’s sometimes the only thing you can do, and so you have to do it, but it’s not ideal,” said Myers, the USC professor.
The need for rent control is compounded by the prevalence of evictions, which disproportionately affect low-income and minority tenants. A state law that allows landlords to evict tenants so they can convert their rental properties to for-sale units affected tens of thousands of tenants in Los Angeles alone between 2001 and 2017. A trio of bills was recently introduced in the state legislature that would make eviction more difficult.
As YIMBYs become a bigger part of the conversation around housing in California, there is increasing tension between the agendas of new, oftentimes more privileged housing activists and those who have long been focused on housing for the most vulnerable.
“I think what’s changed now is that we’ve got Wiener and a lot of the YIMBY groups that identify as liberal, some of them might even identify as leftist, but instead of pushing against the real estate industry, they’re out there pushing for a very neoliberal development agenda,” said Erin McElroy founder of the Anti-Eviction Mapping Project. Damien Goodmon, Executive Director of Housing is a Human Right, called YIMBYs an “astroturf group” for the real estate industry, and has made more extreme critiques, like describing the potential impacts of SB 827 as “a 21st century Trail of Tears.”
Finding the political will
While their overall goals are largely the same—more housing near jobs and transit, at more reasonable prices—the two factions have some substantive disagreements. Affordable housing and tenants’ advocates, for example, tend to reject the notion that simple rules of supply and demand will fix the housing crisis, because an increase in the supply of housing doesn’t necessarily mean an increase in the right kind of supply. Statewide, there is a surplus of high-income homes for rent, while every other income category is under-supplied. And the problem is even worse in expensive cities like San Francisco.
Opponents of SB 827 say that despite the inevitable increase in housing supply, the bill would actually increase rents and home values in low-income, transit-adjacent neighborhoods by signaling that they are open for luxury development. In response to these concerns, Wiener released a series of amendments to the bill, which include policies that protect residents of rent-controlled housing, and provide tenants of demolished buildings the opportunity to rent in the newly constructed buildings at the rate they previously paid.
The bill’s biggest threat will likely be powerful homeowners’ groups—the historical practitioners of NIMBYism—and their old-school environmentalist allies. The Sierra Club of California was one of the first major political groups to come out against SB 827, citing concerns that it could fuel opposition to transit. (The organization has also signaled openness to supporting an amended version of the bill, saying in a statement, “this bill has the right aim, but the wrong method.”) Wiener, a self-described environmentalist, says the bill would lower the state’s carbon footprint by encouraging transit-oriented development.
In order to achieve radical action on housing, YIMBYs and other housing activists will likely need to find a way to work together against the state’s more established interest groups, and mobilize the homeowners and environmentalists who do support ambitious new housing policies.
For YIMBYs this could mean more inclusive messaging, and a greater acknowledgment of historical injustices. “I’m a nice white lady with a nonprofit,” Fierce said. “I don’t have any right to tell these people of color, ‘You just trust me on this.’” YIMBYs have been criticized for failing to advocate for issues like rent control and eviction. More solidarity could go a long way.
Conversely, YIMBYs might be more receptive to tenants’ rights and affordable housing activists if they were more transparent about their alliances with traditional anti-development groups, and more open to market-rate development as a way to generate funds for affordable housing.
Meanwhile, these groups still don’t have their equivalent of a Scott Wiener or an SB 827—and it’s not for a lack of big ideas. Among their proposed policy goals, articulated by Goodmon and Inglis, are a massive mobilization of public funds for affordable housing construction; the implementation of community land trusts, which acquire and hold land for the benefit of the community; and much stronger rent controls and tenants’ rights, similar to those seen in many other countries.
Progress might be on the horizon. In addition to the potentially transformative long-term effects of SB 827, the three leading candidates in the November gubernatorial election have each said they would create approximately 3.5 million new housing units by 2025, a many-fold increase on the current rate of production. Political observers have called these plans unrealistic; indeed, the only way to make them a reality would likely involve the kind of public spending affordable housing advocates have long been dreaming of. Pent-up frustration on homelessness, and ever more widespread concern that young Californians will never be able to afford their parents’ homes could foster the political will for big changes.
California, described by many of its leaders as a “state of resistance,” is positioning itself as a model for progressive policies on issues like the environment, wages, and immigration. But the state’s current housing crisis may undermine its leadership in other areas. If California wants to be a progressive bastion, it needs to be consistent about it, Goodmon said: “We need all these so-called progressive politicians who are busy talking about how they are against the deportations and Trump to take the same approach when it comes to people being pushed out of their homes.”
There are two kinds of horror stories about Airbnb. When they first appeared, the initial cautionary tales tended to emphasize
To map this process, Wachsmuth and his team used estimates of Airbnb activity from AirDNA, a California-based firm that scrapes and analyzes Airbnb data. They studied Airbnb activity from September 2014 to August 2017, including more than 80 million data points, for the whole 20 million population of the New York City metro region. They also used a number of new spatial big-data methodologies developed specifically to analyze short-term rentals.
Their conclusion: Most of those rumors are true. Wachsmuth found reason to believe that Airbnb has indeed raised rents, removed housing from the rental market, and fueled gentrification—at least in New York City. To figure out how, the researchers mapped out four key categories of Airbnb’s impact in New York: where Airbnb is concentrated and how that’s changing; which hosts make the most money; whether it’s driving gentrification in the city; and how much housing it has removed from the rental market.
Is it really still “home sharing”?
The phrase “home sharing” evokes an image of an individual who opens their home and rents out their extra space to wanderlust-y strangers. This is, after all, how Airbnb got its start: Struggling to make rent in San Francisco, founders Joe Gebbia and Brian Chesky started renting out floorspace in their living room and cooking breakfast for their guests in 2007. Today, it is worth some $30 billion.
While many people still use the platform this way, Wachsmuth found that 12 percent of Airbnb hosts in New York City, or 6,200 of the city’s 50,500 total hosts, are commercial operators—that is, they have multiple entire-home listings, or control many private rooms. And these commercial operators earned 28 percent of New York’s Airbnb revenue (that’s $184 million out of $657 million).
Like hotel managers, these hosts tend to be market-savvy: They often charge less per night than other hosts do and adjust their rates to attract a high number of rentals overall. Unlike hotels, they don’t pay commercial property taxes or hotel taxes. And that’s a problem, both for the city itself and for other hosts.
“If we didn’t have this dominance of commercial operators, the home sharers would do better,” Wachsmuth said. “Currently what’s happening is that the price the actual part-time home sharers need to charge in order to get a booking is getting pushed way down.”
If this sound illegal, that’s because it is. It contradicts Airbnb’s “one host, one home” policy, which was introduced in New York City in 2016. That policy limits New York-area hosts from listing rentals at more than one address. It also violates New York State’s Multiple Dwelling Law (MDL), which forbids short-term rentals of fewer of fewer than 30 days in buildings with three or more units, unless the owner is present. While it is certainly possible for a host to have multiple legal listings that all refer to the same property, using American Community Survey data from 2011 to 2015, the researchers calculated that anywhere between between 42 percent and 46 percent of all active listings have had illegal reservations.
New York’s MDL, which has been in effect in some iteration since 1929, is difficult to enforce. In a situation where the law tries to go after someone, Wachsmuth said “the landlord can say, ‘Oh, I was there—I was just in a different room.’ They can’t prove that they weren’t.”
But what about the people who actually are sharing their homes?
There’s no denying that Airbnb remains a useful tool for many New Yorkers, who struggle to keep up with the city’s ever-increasing cost of living. That’s how Charlotte Harris uses the platform, out of her four-bedroom apartment in Williamsburg, Brooklyn. Harris and her housemates started using Airbnb last summer, to earn money during periods when they were traveling. Between them, they made about $5,000—enough to cover September’s rent without finding a short-term sublet.
“It’s not very much, but it’s just so [we] can feel OK about not being home and paying rent,” Harris said. This wouldn’t matter as much, she continued, “if you didn’t feel like each day of your rent, or each day that you lived in your apartment mattered, and was a substantial amount of your income.”
Airbnb disputes Wachsmuth’s figures on how many commercial operators are in the New York City market: According to the company, 92 percent of hosts in New York shared their primary residence between 2017 and 2018, and 79 percent of hosts use the money they earn to stay in their homes. Airbnb also has voiced concerns about AirDNA’s data-scraping method, which can over-count the number of nights per year people actually rent out their homes, since it accounts for periods of time that hosts block off their space as unavailable (which can simply mean that they are home and do not want to host any guests).
To Wachsmuth, the more important figure is the amount of money the smaller number of commercial operators are bringing in. Overall, his data suggests that half of all Airbnb rentals that are conducted by only 10 percent of hosts, who earned a full 48 percent of all the revenue earned in the city last year. That’s some 5,000-people earning a combined $318 million. In contrast, the bottom 80 percent of New York’s hosts—the city’s 40,400 true home sharers—earned just 32 percent of all revenue, or $209 million, in 2017.
The economic power that this fraction of commercial operators wield forces smaller sharers to trim their rates to compete. And they are getting less profit relative to their rent, since the platform contributes to a general increase in rental prices. Using Zillow’s Rent Index, Wachsmuth and his team estimate that over the last three years, Airbnb has increased long-term rents in the city by 1.4 percent. The median household looking for a new apartment will pay $384 more per year than they would have three years ago, due to the growth of short-term rentals.
In other words, using Airbnb to help pay your bills in a space-strapped city is a bit like using an air conditioner to combat global warming: It might help keep your apartment bearable, but overall it’s just making the environment worse.
The gentrification factor
Airbnb listings tend to be most concentrated in the city’s most desirable quarters, where rent is already high. Overall, Wachsmuth found that the Manhattan neighborhoods of Midtown, Midtown West, and the Lower East Side consistently saw the greatest amount of Airbnb activity. Williamsburg, where Harris lives, is the only neighborhood off the island with a comparable concentration.
But in the last two years, new Airbnb hotspots have emerged in increasingly gentrified Brooklyn neighborhoods such as Bushwick and Bed-Stuy. The same is true in the Upper West Side and Harlem in Manhattan, and even Jersey City, New Jersey. As housing prices go up, Airbnb penetration deepens.
The racial equity dimension of this process, and the impact of Airbnb growth in non-white communities in general, has been the subject of much discussion. The company adopted a set of anti-discrimination guidelines in 2016 to mitigate racial biases among hosts after public outcry that the platform facilitated racism by allowing hosts to discriminate against non-white guests.
Overall, Wachsmuth says, white neighborhoods make more money on Airbnb than non-white neighborhoods do—and not only because many popular neighborhoods are majority white. (For example, across New York City, only 39 percent of households are white, compared 68 percent of households in Midtown Manhattan.) He cites a 2017 study by Murray Cox, a “data activist” who runs the watchdog site InsideAirbnb, which concludes that 74 percent of Airbnb listings within majority black neighborhoods are run by white hosts.
But one way or another, white hosts are driving the growth of short-term rentals in non-white neighborhoods, which in turn have led to rent increases. Between 2014 and 2017, Wachsmuth and his team estimate that the platform raised rents by 1.42 percent in north-central Brooklyn neighborhoods such as Bed-Stuy and Crown Heights. This is high for a neighborhood that has only recently acquired a large Airbnb concentration—indeed, it’s the same 1.42 percent rent increase seen in longtime high-revenue areas like Chelsea, Clinton, and the Upper West side.
Furthermore, there are incentives to being an Airbnb host in a non-white neighborhood. According to Wachsmuth, there are large swaths of the city where entire-home Airbnb listings can earn 200 percent or more than the median long-term rent—and these areas are 72 percent non-white. This creates an incentive for landlords to convert whole homes into Airbnb units within communities of color.
Busting “ghost hotels”
According to the Cox report, black New Yorkers are also the most likely to face housing loss due to Airbnb: Across all of New York’s 72 predominantly black neighborhoods, black residents are six times more likely to be affected by Airbnb-induced housing loss than white residents.
But this threat is present for other New Yorkers, too. Long-term housing is lost all around the city when entire homes are placed on short-term rental market for the majority of the year, during which time they could have been made available to long-term renters.
Wachsmuth counts whole-home listings as anything that would be listed as an “entire place” on Airbnb. They can run the gamut from actual houses to whole apartment units. But it is difficult to discern just how many of these listings would be placed on the long-term rental market in an Airbnb-free world. For example, some hosts in New York travel many days out of the year, and would otherwise leave their homes empty. Others rent out space that would never be placed onto the long-term market anyway—like a pied-a-terre (or, say, this decommissioned taxicab).
However, though there is no legal definition of a “full-time rental,” Wachsmuth and his team distinguish these spaces through two measures for entire-home listings: How many days out of a year it is both rented, and available to rent. Wachsmuth counted a home as full-time if it was both rented for 120 days or more, and available to rent for 240 days or more. Using these parameters, his team found that 5,600 entire-home listings were available to rent full-time over the last year. (Other researchers have used higher thresholds for full-time rentals, such as 216 days in New York, and 176 days in Cambridge, Massachusetts.)
Wachsmuth reasons that these 5,600 very frequently rented homes have almost certainly been removed from the rental market, as they are either occupied or available to rent for at least eight months out of the year. The majority of the listings that fall into this category are clustered around Midtown and Downtown Manhattan, but they are growing rapidly in Brooklyn, too.
People renting out individual rooms can also contribute to Airbnb-inspired housing loss. This can happen when a primary tenant permanently lists a spare bedroom in their apartment, or a landlord opts to rent to Airbnb guests rather than finding long-term tenants. The most egregious example of this are “ghost hotels”: entire units or buildings where individual bedrooms are listed individually on Airbnb as private rooms.
“Plenty of private operators don’t look like commercial operators, but they are,” Wachsmuth said. “I don’t want to draw a big distinction between that kind of activity and somebody who’s renting entire homes out full time. They’re two versions of the same thing.”
Wachsmuth compares Airbnb ghost hotels to flophouses—single-room occupancy hotels popular in American cities like New York and San Francisco in the early 20th century. (Here’s an amazing visual history of SROs from CityLab visual storyteller Ariel Aberg-Riger.) However, while flophouses often provided housing for all manner of city folk—such as immigrants, factory workers, and minority groups—ghost hotels largely cater to tourists. And because the hosts that run them are renting out individual rooms rather than whole homes, it can be easier for them to avoid municipal regulation, too.
“What’s interesting is that this kind of activity has a long history in New York,” he said. “I’m not aware of other jurisdictions where there’s almost 100 years of grappling with short-term rentals.”
Using spatial analysis, Wachsmuth’s team identified 4,700 private listings across New York City that make up ghost hotels. Together, these comprise 1,200 discrete ghost hotels, and constitute 16 percent of all private-room listings in the city. They earn an average of $6,400 per room annually—27 percent higher than other kinds of private-room listings.
The number of ghost hotels has increased by 79 percent since 2015, when there were only 670 ghost hotels in the city. In all, New York’s ghost hoteliers earned $30.4 million on Airbnb last year, while contributing greatly to housing loss in the city. Between ghost hotels and frequently rented, entire-home listings, the number of lost housing units in New York City is at least 7,000.
To bust the ghost hotels and mitigate the negative housing-removal impacts of home sharing, Wachsmuth recommends three steps. The first is already underway—implementing and enforcing a “one host, one home” policy. Since adopting the policy in 2016, Airbnb has banned 4,800 illegal listings in New York City. And sinceNovember 2016, Airbnb has barred hosts from listing more than one active entire home listing in the city (with certain exceptions).
To this end, Wachsmuth also suggests that home sharing might do better in New York if the state relaxed its restrictive Multiple Dwelling Law. “I can imagine that for New York, part of a kind of grand settlement on this would boil down to legalizing short term rentals for fewer than 30 days, which are currently basically always illegal,” Wachsmuth said. “Ultimately [the current law is] not compatible with the kind of part-time, entire-home short-term rentals” that are so prevalent in the city.
Airbnb is currently supporting legislation that would do just this, by amending the state’s Multiple Dwelling Law—which hasn’t been modified since 2010. Sponsored by New York State Senator John Bonacic, the bill would update the law so that residents could rent out a single home for fewer than 30 days. Additionally, it would codify the one host, one home policy into state law, and implement “pass-through registration” in New York. This registration system, which is already active in cities like New Orleans, Chicago, and San Francisco, requires hosts to register with the platform, which then turns their data over to a city registry. Together, these things would help cities could target illegal listings.
“Airbnb supports legislation that would restrict home sharing to one single home, which would finally allow enforcement to focus on illegal hotel operators while protecting regular New Yorkers who are trying to make some extra money to live in a city that gets more expensive by the year,” said Airbnb’s head of northeast policy, Josh Meltzer.
Wachsmuth’s third step is for cities to eliminate full-time rentals altogether. “There should be a limit to the number of nights per year that you can list an entire home,” he said. Cities in other parts of the world have implemented limits like this: In Amsterdam, for example, you can only host Airbnb guests for 60 days (and the city plans to shorten this period, to just 30 days). In London, the limit is 90 days, while Paris has a 120 day maximum. Once a host has booked their space for the permitted number of days, they are automatically banned from hosting again until the following year.
Between these sorts of limits, and one host, one home policies, Wachsmuth says, “you’re basically guaranteed that commercial operators are going to have a hard time.” Without such caps, he believes, large-scale commercial operators will continue dominating the market—and driving up rents for everyone.
“If you just have this neutral platform which says you can share your home and there’s no regulation…over time what you’re going to see is an increasing dominance of that platform by the biggest savviest players,” he said. “And that’s what we’ve got.”
Of all that came out of the mid-20th-century liberal consensus, perhaps nothing ended up so reviled as public housing. Bedeviled by hyper-segregation, urban decline, de-industrialization, and other social ills, government-funded affordable housing in large cities of the United States suffered from decades of bad press. By the 1990s, its failure was so broadly assumed that most of America cheered on the Clinton administration when it demolished huge swathes of the nation’s public housing.
Ben Austen’s new book and or Good Times. The truth is a mix. You have to get people to talk more, to learn that it could be family members that shot at [them].
Then there’s the feedback loop of how the storytelling about a place affected the reality of it. I write about this moment in 1970 where these two cops are killed, and everyone is writing about Cabrini-Green as this hellish place. Some people who live there are then like, “Man, I’m getting the f— out of here.” A third of the population leaves in a couple months, and then it’s suddenly, wildly vacant. Streets and Sanitation refuses to go there to pick up trash. Everyone in the city is reading about this terrible place, so people on the waiting list don’t want to move to Cabrini-Green. So the reality is shaped by the media, and it really does become worse.
How did you find the people who form the heart of your story?
I started this in 2011, when the last high rise in Cabrini-Green was coming down, as a magazine feature for Harper’s. I met many of the people then while doing that reporting. In the course of interviewing all these people, there are the four people I talk to the most in the book. They are people who both ended up trusting me enough to do many, many interviews, and who are good storytellers who all fought for their home.
Almost everyone I spoke with, you could find a moment where they were interviewed by someone else. Something would always come up because reporters were always around Cabrini-Green. It showed the way the outside world was always observing Cabrini-Green and picturing it, and residents were always reacting to those images.
The social and political history of public housing has been told before. What new ground does your book break?
[My work is] compared a lot to Alex Kotlowitz’s book [There Are No Children Here], which is first-hand reporting about two brothers in the Henry Horner Homes. His book, [set] in the 1990s, is more that Jacob Riis moment: here’s how the other half lives, this terrible injustice happening in the city.
Now, I’m telling it from a different vantage point. Yes, there was this great ill of concentrated poverty that we needed to get rid of. But we still have that in the city. We still have concentrated poverty and social isolation, it’s just the city doesn’t own the land anymore. Now it’s less visible, there is less collective outrage, and there is less advocacy by the people who are suffering it.
I hope my book tells that broader story, that sad irony that the same reason we tore down public housing was the reason to build it in the first place.
In Evicted, Matthew Desmond argued that a lot of attention has been focused on public housing, but most poor people live unassisted in market-rate housing. Why do you think the story of public housing should be better known, even if it isn’t that relevant to the lives of most poor people?
I think of public housing as the idea of us collectively as a country, the state, grappling with this issue of need, [with] the huge demand and lack of supply of affordable, decent, low-income housing.
Public housing’s fate still shows powerfully and painfully the evisceration of the idea of the state doing anything. So we are left with the people in Milwaukee in Matt Desmond’s book. Those aren’t people seeking public housing, and when they do, the waitlist is endless. Two hundred and eighty thousand families in Chicago applied for a lottery to get on the waitlist for a [Chicago Housing Authority] unit. That’s one in four of all renter households. That’s crazy, and it shows what the need is.
Public housing helps us think about possible solutions. It doesn’t have to be towers, but what does that experience mean for Section 8 housing, smaller developments, or mixed-income housing? It’s part of thinking about the basic idea of providing a decent home for everybody, which shouldn’t be so radical.
One thing I wrestle with, that I don’t think people on the left wrestle with enough, is that public housing is the story of the public sector doing a bad job of delivering goods and services. Pruitt-Igoe is only open for 18 years before they are tearing it down because it’s such a mess. We talk about these housing authorities that weren’t managing their properties, and now you have New York City, which is in this mess of $18 billion of unmet repairs.
That example is directly linked to the failure of the federal government to adequately fund the public housing capital program.
But we are the federal government. How can we make the case for these federal and state programs when they are all f—ed up? If the federal government didn’t do it, how can we be asking for more federal or state programs?
Not that the private sector is going to do it. We know from experience the opposite is true, that the market cannot dig that deeply because there is no profit in it. [Desmond’s] book is such a painful example of that. Or the foreclosure crisis. But we can’t just say, “Let’s do public housing again,” or “Let’s do something bigger.” How do you do it better?
What is it about cities that makes them so influential, and what makes some urban centers grow faster than others? If we find that out, we can identify the best strategies for investing in our cities. Professor Mario Polèse has proposed five urban economics principles that affect a city’s outcomes.
To some, the headline made it sound like the system, which had debuted in 2016 and took 9 years and cost $200 million to build, was about to be permanently mothballed. And more than a few critics of the system sharpened their Twitter takes.
This was not the case. Nor were the two-year-old cars themselves heading for the scrapyard, as D.C.’s transit agency quickly pointed out. (WTOP issued a clarification on Twitter.) The less-dramatic news was that D.C. Streetcar will need to purchase new cars for its planned expansion. The cars will likely have to come from different companies than the two that supplied its initial fleet. One of those firms has ceased operations, and the other appears to be floundering, which will probably make it more difficult and more expensive for the system to maintain its cars.
But readers might be forgiven for assuming that their streetcar itself was making an early exit, as transit foes have used the system as a symbol of inefficiency and poor resource allocation since it opened. The 2.2-mile route—envisioned as the opening segment of what is planned to be a 37-mile network—runs along H Street. That is a corridor well served by buses, behind which the streetcar is frequently stuck, as it does not enjoy its own right of way. (It is, however, free to ride.)
By several other measures, however, the streetcar has become something of a secret success since its opening. WTOP’s report happened to be released the day before the system’s second birthday, clouding what otherwise would have been a day of measured celebration. “Things have largely been going very well,” said Sam Zimbabwe, chief project delivery officer for the District Department of Transportation. “We’ve seen stronger ridership than we originally projected. We’ve been able to reduce headways and make sure that we’re providing reliable service. We’ve had a very good safety record overall.”
If economic development rather than moving people around were the only metric for the streetcar’s success, it would be viewed as an unequivocal triumph. Between June of 2010 and January 2018, the median home value in the Near Northeast neighborhood, which encompasses a significant part of the line, jumped from $441,000 to $705,000, according to Zillow, an increase 10 percent greater than the District overall during that period. Massive new apartment buildings and condos have significantly boosted the density of the neighborhood in recent years. Since 2013, three buildings of 200 units or more have come online on H Street, in addition to numerous smaller projects—and more are on the way.
That infusion of residents and commercial activity helps explain how the streetcar beat its initial ridership estimates of 1,500 riders per weekday (though this estimate was made in the mid-2000s and assumed a fare-based system). For the past year or so, the system has carried more than 3,000 passengers per weekday, with levels nearing or exceeding 4,000 in the summer and fall. More promisingly, the system increased ridership by 44 percent month over month from its first year of operation.
The trend is quite different for some other new streetcar systems. In Cincinnati, for example, healthy initial ridership faded after the opening months, while Atlanta had a big ridership dip after transitioning from free to fared service.
Indeed, by modern-streetcar standards (which, admittedly, may be a low bar), the D.C. system is doing pretty good: Its ridership is in the middle of the pack nationally on a per-mile basis, despite the fact that the system doesn’t cover the core of the city. For now, the system has no plans to institute a fare, and costs continue to be covered out of the general fund. Though the streetcars are a free alternative to the buses that run along H Street, bus ridership on the corridor has remained relatively steady. And its average speed (5.7 mph) is faster than systems in Little Rock, Seattle, and Tampa.
But it stands to get better—and more useful—if it can just grow up. Ultimately, a 37-mile streetcar network remains the “guiding vision” for future expansions, according to Zimbabwe, but for now DDOT is focused on just extending its current line. An eastern extension of the current line across the Anacostia River into the District’s impoverished and geographically isolated Ward 7 is set to begin engineering work this year, with a projected opening in 2024. The timeframe for a western extension through downtown D.C. along K Street and into Georgetown is hazier. Zimbabwe believes the western extension is a competitive candidate for federal transportation grants—assuming those grants remain available in the current political climate. In one proposed alignment, the streetcar would have its own right of way along much of the extension, making it a viable alternative to the crowded Metro.
Getting this extension finished—to say nothing of the rest of the network—will not be easy. As the fleet replacement drama demonstrated, it’s not hard for the system to draw the ire of critical constituents. “The project continues to pay for its past sins,” said Martin Di Caro, a former reporter for the radio station WAMU who covered the streetcar. “There are always going to be people on the city council who will question the city’s commitment of so much money.”
As CityLab’s Laura Bliss (and manyothers on this site over the years) have observed, streetcars have generally not been the best transportation investment in the American cities that have re-introduced them. But there’s also a risk of prematurely killing off or hampering projects that could ultimately, in fact, pencil out, if given the time and resources to complete extensions that would boost their usefulness.
Despite their well-documented drawbacks, streetcars clearly have a powerful allure: There are four new lines expected to come online in 2018. The American streetcar revival is ongoing, whether we like it or not, so the ones working hard to do it right—with designated right of way, high-density transit-oriented development, and connections to other transportation modes and bike lanes—ought to be given every chance to succeed.