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Only if you assume that the best utilization of scarce resources is the most profitable one. Filling the same number of people's needs about as well at about th

by makomk 10y ago

Only if you assume that the best utilization of scarce resources is the most profitable one. Filling the same number of people's needs about as well at about the same price using several times the real estate, meaning that other people can't find anywhere to live, is less efficient for any definition of efficiency other than "what capitalism decides". People actually having homes is not the equivalent of running SETI@Home on idle computers, nor does it become a worthless waste of little or no benefit to you or society at large just because it's more profitable to keep those units empty and use them as hotels for a few months of the year.

fennecfoxen 10y ago
> Only if you assume that the best utilization of scarce resources is the most profitable one Well, the best utilization is the one with the highest utility. In an efficient market that's the same as the most profitable, by definition. The usual caveats apply: no two individuals can ever agree how to measure utility, a free market won't be efficient unless there are no barriers to entry (city zoning may be a barrier to entry), transaction costs are low (the cost of moving from one apartment to another in the rental market is high), and property rights exist and are enforced (including both the obvious property rights and the ones that would apply to all the externalities like neighborhood character but don't exist and won't be enforced for a variety of good reasons) So yes, caveats. Obviously. There's a moral character to some of these things. One can argue that people living in houses in a big city is morally superior to people vacationing in those houses. (Is that a thing you'd like to argue? Please do explain why, if it is.) But to the point before: is AirBnB a rent extractor? Pointing out that caveat apply to the measuring of capital utilization in the abstract is not a strong argument in and of itself. Do they apply here? If they apply, would you care to quantify the impact in dollar figures for a typical city? (I recognize this can be hard for moral injuries, but it's not always clear when the injury ceases to be financial and becomes moral.) And even if these caveats apply, how do they apply to making the case that AirBnB actually extracts economic rents? The main thing it seems to be doing is lowering transaction costs associated with doing a short-term rental, and they do have competitors (HomeAway, Wimdu, Tansler, FlipKey, just plain Craigslist, etc, not to mention that the homeowners face competition from substitutes in the form of hotels) so it's not quite obvious that they're the ones collecting on this economic rent.

by makomk 10y ago

fennecfoxen 10y ago

> Only if you assume that the best utilization of scarce resources is the most profitable one Well, the best utilization is the one with the highest utility. In an efficient market that's the same as the most profitable, by definition. The usual caveats apply: no two individuals can ever agree how to measure utility, a free market won't be efficient unless there are no barriers to entry (city zoning may be a barrier to entry), transaction costs are low (the cost of moving from one apartment to another in the rental market is high), and property rights exist and are enforced (including both the obvious property rights and the ones that would apply to all the externalities like neighborhood character but don't exist and won't be enforced for a variety of good reasons) So yes, caveats. Obviously. There's a moral character to some of these things. One can argue that people living in houses in a big city is morally superior to people vacationing in those houses. (Is that a thing you'd like to argue? Please do explain why, if it is.) But to the point before: is AirBnB a rent extractor? Pointing out that caveat apply to the measuring of capital utilization in the abstract is not a strong argument in and of itself. Do they apply here? If they apply, would you care to quantify the impact in dollar figures for a typical city? (I recognize this can be hard for moral injuries, but it's not always clear when the injury ceases to be financial and becomes moral.) And even if these caveats apply, how do they apply to making the case that AirBnB actually extracts economic rents? The main thing it seems to be doing is lowering transaction costs associated with doing a short-term rental, and they do have competitors (HomeAway, Wimdu, Tansler, FlipKey, just plain Craigslist, etc, not to mention that the homeowners face competition from substitutes in the form of hotels) so it's not quite obvious that they're the ones collecting on this economic rent.