Regional English cities are suffering from the rise of short-term rental services like Airbnb

The Northern Quarter, Manchester, 2014. Image: Getty.

The short-term rental market has ballooned in recent years. According to the Residential Landlords Association, Airbnb listings in ten UK cities increased by almost 200 per cent between 2015 and 2017. And while attention has mainly focused on the problems this is causing in big cities such as London, or tourist hotspots such as Barcelona and Berlin, communities in England’s regional cities are also feeling the effects.

The growth of short-term rentals is closely tied to the broader financialisation of housing – that is, changes in the housing and financial markets, which turn housing into a commodity. These changes have opened the door for new investors to buy and develop more and more units, which in turn increases the scarcity of housing, prompts landlords to raise rent, threatens community bonds and stretches neighbourhood services.

The short-term rental sector is made up of two different business models. Serviced apartments are typically run by a single business, which offer a hotel experience for visitors in many city centres. Landlords can also rent out rooms or entire properties through sharing economy platforms such as Airbnb. By providing this service, Airbnb has given people a new means to earn money on their homes – sometimes without having to follow all the laws that apply to renting.

Growing trends

In 2016, the Association of Serviced Apartment Providers found that 86 per cent of serviced apartment units in Manchester were occupied throughout the year. Alongside other regional cities such as Liverpool and Bristol, Manchester is a key target for serviced apartment operators.

To find out exactly how short-term rentals are affecting regional cities such as Manchester, I undertook research to collect data on 22 serviced apartment schemes, containing 1,198 units across central Manchester and neighbouring Salford during 2017. The average starting price for a night in a serviced apartment was £99, and owners made an average monthly income of £2,563 per unit. The financial rewards of investing in serviced apartments clearly outweigh the returns on long-term rentals for residents, which yield around £850 per month.

Getting trendy: street art and cycles in Manchester’s Northern Quarter. Image: Kylaborg/Flickr/creative commons.

To find out about Airbnb, I used a 2016 survey by sector analysts AirDNA, which showed a total of 310 units advertised on Airbnb within central Manchester, and more than 1,500 across the city region. They noted a 70 per cent annual growth in the sector from the previous year. The average price per night for an entire property is £143, with the highest being £1,251.


Across the city, my research identified 357 properties, which had been taken out of the long-term rental market up to 2016, with many more expected over coming years. Indeed, real estate company Colliers recently reported that in 2017 there were more than 4,000 units being used for short-term rentals, in a city struggling to build affordable housing.

The 2016 data from AirDNA revealed 177 hosts operating Airbnb properties in central Manchester: 59 owned multiple properties and accounted for 62 per cent of all listed units. It is likely that many of these hosts are people who own multiple properties, or who set up small enterprise to use housing in central Manchester as a business.

And there are concerns that those properties taken out of the long-term rental market may not be operating with any licensing or planning permissions. A report by the All-Party Parliamentary Group for Tourism, Leisure and the Hospitality Industry – a group of MPs from Labour, Conservative and Liberal Democrat parties, who meet to discuss issues in the industry – raised concerns that sharing economy platforms do not check if hosts comply with gas and fire safety regulations before they let out their properties.

Neighbourhoods on the frontline

Serviced apartments, concentrated in the Northern Quarter. Image: Jonathan Silver/author provided.

Short-term rentals are clustering at certain locations across Manchester, especially the popular Northern Quarter, which has more than 150 Airbnb units alongside over 500 serviced apartments. This rapid growth is putting strain on local services, small businesses and potentially residents, and there’s a real risk that the people who made the neighbourhood a popular destination for visitors will be pushed out, as the area becomes a magnet for “party lets”, with antisocial behaviour and littering.

With more than 650 potential homes in a relatively small neighbourhood used for the short-term rental market, it’s hardly surprising that the character of the neighbourhood is rapidly changing, while fears grow that it is losing its soul.

Some cities have already weathered the first wave of negative impacts from short-term rentals – and are beginning to fight back. New laws have been put in place, to limit long-term damage to communities. In Paris and London, authorities introduced a cap for short-term rentals to 90 days per year. This helped to ensure that housing built for residents is not taken out of long-term rental markets and used solely as a business asset by owners.

Balconies in Barcelona. Image: mrci_/Flickr/creative commons.

Barcelona has introduced a range of measures, including fines for companies that advertise unlicensed units. Across the world, relatively small “tourist taxes” of £1 per night now include serviced apartments. Proceeds are invested back into cities, to support local services and address the disruptive impacts on neighbourhood life.

So far, English regional cities have been pretty slow to act. Manchester City Council does not yet have a policy to address the sector. Liverpool City Council has been more proactive, pushing for national regulations to force landlords to register short-term rental properties. It has also lobbied central government for the ability to limit rentals to 90 days – a planning tool currently only available in London.

Unless coordinated action is taken at local and national levels, the short-term rental market will make the housing crisis, which is gaining pace in England’s regional cities, even worse. Local communities and politicians need to come together quickly, and learn from cities that have already developed effective policies – before some neighbourhoods change irrevocably.

The Conversation

Jonathan Silver, Leverhulme ECR Fellow, University of Sheffield.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

What Citymapper’s business plan tells us about the future of Smart Cities

Some buses. Image: David Howard/Wikimedia Commons.

In late September, transport planning app Citymapper announced that it had accumulated £22m in losses, nearly doubling its total loss since the start of 2019. 

Like Uber and Lyft, Citymapper survives on investment funding rounds, hoping to stay around long enough to secure a monopoly. Since the start of 2019, the firm’s main tool for establishing that monopoly has been the “Citymapper Pass”, an attempt to undercut Transport for London’s Oyster Card. 

The Pass was teased early in the year and then rolled out in the spring, promising unlimited travel in zones 1-2 for £31 a week – cheaper than the TfL rate of £35.10. In effect, that means Citymapper itself is paying the difference for users to ride in zones 1-2. The firm is basically subsidising its customers’ travel on TfL in the hopes of getting people hooked on its app. 

So what's the company’s gameplan? After a painful, two-year long attempt at a joint minibus and taxi service – known variously as Smartbus, SmartRide, and Ride – Citymapper killed off its plans at a bus fleet in July. Instead of brick and mortar, it’s taken a gamble on their mobile mapping service with Pass. It operates as a subscription-based prepaid mobile wallet, which is used in the app (or as a contactless card) and operates as a financial service through MasterCard. Crucially, the service offers fully integrated, unlimited travel, which gives the company vital information about how people are actually moving and travelling in the city.

“What Citymapper is doing is offering a door-to-door view of commuter journeys,” says King’s College London lecturer Jonathan Reades, who researches smart cities and the Oyster card. 

TfL can only glean so much data from your taps in and out, a fact which has been frustrating for smart city researchers studying transit data, as well as companies trying to make use of that data. “Neither Uber nor TfL know what you do once you leave their system. But Citymapper does, because it’s not tied to any one system and – because of geolocation and your search – it knows your real origin and destination.” 

In other words, linking ticketing directly with a mapping service means the company can get data not only about where riders hop on and off the tube, but also how they're planning their route, whether they follow that plan, and what their final destination is. The app is paying to discount users’ fares in order to gain more data.

Door-to-door destinations gives a lot more detailed information about a rider’s profile as well: “Citymapper can see that you’re also looking at high-profile restaurant as destinations, live in an address on a swanky street in Hammersmith, and regularly travel to the City.” Citymapper can gain insights into what kind of people are travelling, where they hang out, and how they cluster in transit systems. 

And on top of finding out data about how users move in a city, Citymapper is also gaining financial data about users through ticketing, which reflects a wider trend of tech companies entering into the financial services market – like Apple’s recent foray into the credit card business with Apple Card. Citymapper is willing to take a massive hit because the data related to how people actually travel, and how they spend their money, can do a lot more for them than help the company run a minibus service: by financialising its mapping service, it’s getting actual ticketing data that Google Maps doesn’t have, while simultaneously helping to build a routing platform that users never really have to leave


The integrated transit app, complete with ticket data, lets Citymapper get a sense of flows and transit corridors. As the Guardian points out, this gives Citymapper a lot of leverage to negotiate with smaller transit providers – scooter services, for example – who want to partner with it down the line. 

“You can start to look at ‘up-sell’ and ‘cross-sell’ opportunities,” explain Reades. “If they see that a particular journey or modal mix is attractive then they are in a position to act on that with their various mobility offerings or to sell that knowledge to others. 

“They might sell locational insights to retailers or network operators,” he goes on. “If you put a scooter bay here then we think that will be well-used since our data indicates X; or if you put a store here then you’ll be capturing more of that desirable scooter demographic.” With the rise of electric rideables, Citymapper can position itself as a platform operator that holds the key to user data – acting a lot like TfL, but for startup scooter companies and car-sharing companies.

The app’s origins tell us a lot about the direction of its monetisation strategy. Originally conceived as “Busmapper”, the app used publicly available transit data as the base for its own datasets, privileging transit data over Google Maps’ focus on walking and driving.  From there it was able to hone in on user data and extract that information to build a more efficient picture of the transit system. By collecting more data, it has better grounds for selling that for urban planning purposes, whether to government or elsewhere.

This kind of data-centred planning is what makes smart cities possible. It’s only become appealing to civic governments, Reades explains, since civic government has become more constrained by funding. “The reason its gaining traction with policy-makers is because the constraints of austerity mean that they’re trying to do more with less. They use data to measure more efficient services.”  

The question now is whether Citymapper’s plan to lure riders away from the Oyster card will be successful in the long term. Consolidated routing and ticketing data is likely only the first step. It may be too early to tell how it will affect public agencies like TfL – but right now Citymapper is establishing itself as a ticketing service - gaining valuable urban data, financialising its app, and running up those losses in the process.

When approached for comment, Citymapper claimed that Pass is not losing money but that it is a “growth startup which is developing its revenue streams”. The company stated that they have never sold data, but “regularly engage with transport authorities around the world to help improve open data and their systems”

Josh Gabert-Doyon tweets as @JoshGD.