5 ms·

How?

brianwawok 10y ago
Supply and demand http://www.investopedia.com/university/economics/economics3.asp http://www.investopedia.com/university/economics/economics3.... Say there would normally be 1 million apartments for rent. Now AirBNB comes. Some get used as hotels. Now you have 900k apartments for rent, and 100k hotels. The price of the apartments go up. In fact a very small change in supply could lead to a fairly massive price hike.
- jacalata 10y ago
  I thought you were saying that this bill would raise rents, but it sounds like you actually meant that Airbnb-ing an apartment raises rents, is that right?
  - brianwawok 10y ago
    Airbnb raises rents, hence why many people do not want it around their backyard.
- arebop 10y ago
  Isn't it more like 995k apartments for rent, and 5k hotels? The difference between 10% and 0.5% matters when you're arguing that AirBnB significantly reduces the supply of housing in NYC.
  - brianwawok 10y ago
    Depends how elastic the supply is. If those 1 million units, what if only 50k turn over each year? So 50k vs 55k units available could have a doubt digit influence on price.
    - arebop 10y ago
      You should't assume that airbnb conversions would turn over 20x as frequently as the existing apartments. So it wouldn't 50k vs. 55k, but 50000 vs. 50250. Sure, there might be a big spike in supply on airbnb-banishment-day, but then those apartments get rented and we're back to approximately the place we started, as far as long-term rents go, only without airbnb the tourists and property owners are worse off.
fennecfoxen 10y ago
By making capital utilisation less efficient, and impairing the development of new capital that would be used for housing in New York (which would take the pressure off older housing, lowering prices). Of course, if you're talking about ways that New York City makes housing capital less efficient, you're going to have a list some five miles long, so it's really just adding insult to injury, but one can still gripe about it.
cloudjacker 10y ago
Assuming they're referring to AirBnB rents, then two ways I could think of: 1. less legal units on AirBnB + same demand for renting units = higher price for units on AirBnB 2. illegal units on AirBnB coupled with 1. means passing through the rental risk to the consumer
artursapek 10y ago
I live in NYC. This is my understanding: 1. There's regulation preventing landlords from raising rents too fast; often capping it at a much slower rate than the market itself is increasing 2. Once a tenant leaves, the landlord is free to increase the rent a lot more to catch up with the market 3. Therefore, if someone is Airbnb-ing an apartment they have lease on and living somewhere else, this decreases supply and causes other apartments to go up more in step (2) to make up for it Maybe this is wrong? If so, can someone correct me?
- JDiculous 10y ago
  Assuming the person you're subletting to isn't living in NYC
- quicknir 10y ago
  Your understanding is incorrect. This only applies to rent controlled, and rent stabilized apartments. Most NYC apartments are neither of these, and rent stabilized itself has ceased to be effective in many cases. The scenario you're describing is possible, kind of, maybe. Usually rent controlled apartments also have pretty strict laws about subletting, to prevent this exact kind of thing (and this is all legislation that predates airbnb).

How?

Supply and demand http://www.investopedia.com/university/economics/economics3.asp http://www.investopedia.com/university/economics/economics3.... Say there would normally be 1 million apartments for rent. Now AirBNB comes. Some get used as hotels. Now you have 900k apartments for rent, and 100k hotels. The price of the apartments go up. In fact a very small change in supply could lead to a fairly massive price hike.

jacalata 10y ago
I thought you were saying that this bill would raise rents, but it sounds like you actually meant that Airbnb-ing an apartment raises rents, is that right?
- brianwawok 10y ago
  Airbnb raises rents, hence why many people do not want it around their backyard.
arebop 10y ago
Isn't it more like 995k apartments for rent, and 5k hotels? The difference between 10% and 0.5% matters when you're arguing that AirBnB significantly reduces the supply of housing in NYC.
- brianwawok 10y ago
  Depends how elastic the supply is. If those 1 million units, what if only 50k turn over each year? So 50k vs 55k units available could have a doubt digit influence on price.
  - arebop 10y ago
    You should't assume that airbnb conversions would turn over 20x as frequently as the existing apartments. So it wouldn't 50k vs. 55k, but 50000 vs. 50250. Sure, there might be a big spike in supply on airbnb-banishment-day, but then those apartments get rented and we're back to approximately the place we started, as far as long-term rents go, only without airbnb the tourists and property owners are worse off.

fennecfoxen 10y ago

By making capital utilisation less efficient, and impairing the development of new capital that would be used for housing in New York (which would take the pressure off older housing, lowering prices). Of course, if you're talking about ways that New York City makes housing capital less efficient, you're going to have a list some five miles long, so it's really just adding insult to injury, but one can still gripe about it.

cloudjacker 10y ago

Assuming they're referring to AirBnB rents, then two ways I could think of: 1. less legal units on AirBnB + same demand for renting units = higher price for units on AirBnB 2. illegal units on AirBnB coupled with 1. means passing through the rental risk to the consumer

artursapek 10y ago

I live in NYC. This is my understanding: 1. There's regulation preventing landlords from raising rents too fast; often capping it at a much slower rate than the market itself is increasing 2. Once a tenant leaves, the landlord is free to increase the rent a lot more to catch up with the market 3. Therefore, if someone is Airbnb-ing an apartment they have lease on and living somewhere else, this decreases supply and causes other apartments to go up more in step (2) to make up for it Maybe this is wrong? If so, can someone correct me?

JDiculous 10y ago
Assuming the person you're subletting to isn't living in NYC
quicknir 10y ago
Your understanding is incorrect. This only applies to rent controlled, and rent stabilized apartments. Most NYC apartments are neither of these, and rent stabilized itself has ceased to be effective in many cases. The scenario you're describing is possible, kind of, maybe. Usually rent controlled apartments also have pretty strict laws about subletting, to prevent this exact kind of thing (and this is all legislation that predates airbnb).