In a new effort to get you onto the site, the company has created a calculator that tells you how much of your rent could be covered listing “your spare room.”
The site suggests that in most neighborhoods, you’ll cover around 10 percent or more by renting out that spare room for just three nights a month. Of course, to get such enticing figures, Airbnb uses comically low rental figures.
In my neighborhood, zip code 80218, a two-bedroom apartment is estimated at a $980 monthly rent. I pay more than that for my one-bedroom apartment.
Apartment list says the median rent for a two-bedroom apartment in Capitol Hill is more like $1,900 a month. Zillow puts the number in the same ballpark — $1,897.50 a month for Capitol Hill. That’s practically twice as much as the number Airbnb uses.
So what gives? Airbnb didn’t pull these numbers out of thin air; they are “based on HUD’s 2017 Small Area Fair Market Rent estimates for two-bedroom apartments in each zip code.”
SAFMRs are an extension of Fair Market Rents, just scaled down to account for variability within a city. Here’s the problem with FMRs in this case.
The Department of Housing and Urban Development sets fair market rents to ensure that there’s enough housing available for housing voucher participants — think Section 8. FMRs are based on rental data too, but I don’t see them used to illustrate what local rents are because that’s not what they are for. The National Multifamily Housing Council and the National Apartment Association argue that there are issues of data lag as well in FMR calculations.
Plus in this case, the SAFMRs used are for the 40th percentile, which means they are cheaper than normal.
At least Airbnb is releasing some numbers on what a host might earn from their proprietary data. But I’d recommend taking those with a grain of salt too.