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More than the party ban: Airbnb could be adding to Austin's housing shortage

(Shutterstock)

Airbnb is moving to make its COVID-induced ban on house parties permanent—but from the affordable housing shortage to "Under 25" bans, the short-term rental service may be losing its shine in Austin.


In 2019, the company moved to prohibit “open-invite” parties that were advertised on social media and “chronic party houses." By 2020, its ban broadened to all parties and events "until further notice," which was officially coded into policy Tuesday.

From August 2020 to January 2022, Airbnb denied over 48,000 reservations in Texas from serial party offenders, and around 3,300 reservations were declined through the "Under 25" system in Austin.

For some Austinites, the party ban may be the last straw.


But Airbnb has already caught plenty of flack for its possible contributions to the nation's housing shortage.

In Austin, short-term rentals are required to be registered through the city. And while the city reports around 1,900 rental units in the rental registry, according to city demographer Lila Valencia, data collection site Inside Airbnb has tracked close to 12,000 in the area.

Inside Airbnb founder Murray Cox said that too many Airbnbs in Austin could shrink the available housing market.

"If the housing units (have) been taken off the market, that's displacing people, it's making housing more scarce. And it's probably driving the cost of housing up," Cox told Austonia.

Short-term rentals could also eat into new housing in Austin, from apartment buildings to accessory dwelling units on single-family properties.

"If new housing has been built, and it's being tied to Airbnb, that's also really just servicing the tourism industry as opposed to the housing needs of the city," Cox said.

Because a large portion of its customers are tourists, Airbnbs may also tend to crowd around desirable areas, such as downtown or South Congress. South Congress's average rent now rivals New York City, according to Austin Business Journal.

"When that happens, you're taking away housing units in an already densely-populated area where there is more of a shortage of housing," Valencia said. "And so then the people who historically once lived there are no longer able to afford to live there, and the unit itself isn't even going to somebody who could afford to rent it on a more permanent basis, but rather to people who are coming in and visiting for a weekend or two."

Despite the pandemic—and growing frustration among homeowners and renters—Airbnb saw a record year in 2021. But two of Airbnb's billionaire founders have quietly sold $1.2 billion in company stock in the last year, a possible premonition of what's to come.

And while some have created an Airbnb "empire"—one company owns 338 available listings in Austin—many priced-out Austinites are fed up with big investors' influence in the tight housing market.


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