The Real Deal New York

Airbnb revenue in black neighborhoods mostly goes to white hosts: study

Startup says it's benefiting minorities in 72 communities, but Inside Airbnb claims few actually reap the rewards
By Rich Bockmann | February 24, 2017 05:45PM

Airbnb Founders Joe Gebbia, Nathan Blecharczyk and Brian Chesky (Credit: Getty Images)

As it waged an ultimately unsuccessful fight last year against legislation aimed at curtailing illegal short-term rentals, Airbnb orchestrated a public relations campaign painting the tech startup as a champion of middle class New Yorkers who rent out their homes to help make the ends meet.

But according to a new study by an Airbnb watchdog, most of the money earned in predominantly black neighborhoods goes to white hosts who are new to the neighborhood, furthering economic disparity and gentrification.

“Black neighborhoods with the most Airbnb use are racially gentrifying, and the (often illegal) economic benefits of Airbnb accrue disproportionately to new, white residents and white speculators,” author Murray Cox wrote in the unpublished draft summary of the study, which a source provided to The Real Deal.

The study, conducted by Inside Airbnb, used facial recognition software to determine hosts’ races based on their Airbnb profile photos in the city’s 72 predominantly black neighborhoods and then calculated all-time revenues for their listings.

Whites make up 13.9 percent of the overall population in those neighborhoods, but disproportionately account for 74 percent of the Airbnb host population, according to the summary.

When it came to earnings, white hosts in these neighborhoods pocketed a total of $159.7 million – or 73.7 percent of the income earned in these neighborhoods – compared to the $48.3 million black hosts earned, the study found. Based on the population breakdown, that means white hosts disproportionately reaped 530 percent of the economic value that Airbnb brought into predominantly black neighborhoods that month, the study says.

A spokesperson for Airbnb cast doubt upon the study’s methodology.

“This so-called report is nothing more than selective racial profiling, which is not surprising for a hotel-front group with a history of supporting a law that is harmful to underrepresented minorities and communities of color,” the spokesperson wrote in an email to TRD.

The spokesperson said Airbnb does not collect demographic data on its users, so the company can’t speak to the veracity Inside Airbnb’s claims, but questions whether or not facial-recognition software can accurately determine anyone’s racial identity.

Cox told TRD that the study was self-funded, and no connection between the data website and Airbnb’s hotel opponents has ever been substantiated. He said it is the tech startup, not his website, that is engaged in racial bias.

“Airbnb, based on this data, clearly facilitates disparate impact on communities of color, while the economic benefits only go to the new, white residents or white speculators into those communities.”

Airbnb trotted out racially diverse hosts on subway ads and in television commercials last year touting the economic benefits the $30 billion company brought to middle class New Yorkers. But the San Francisco-based company went up against a powerful coalition of hotel operators, labor unions and affordable-housing advocates who successfully pushed Albany to pass a law that imposes fines on hosts who advertise illegal short-term listings on sites like Airbnb.

The city earlier this month began fining landlords who officials say violated the state law, though Airbnb itself is not liable to be fined.

The company last year hired former U.S. Attorney General Eric Holder to help combat accusations of discrimination after a Harvard University paper found that customers with names that “sound black” were 16 percent less likely to book a room than those with names that sound white.

Twitter users fought back with the hashtag #AirbnbWhileBlack.

Clarification: After this story was published, Inside Airbnb updated the earnings figures for the demographic groups from the final version of its study. The overall economic disparity figure remained the same.