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Of course, this is happening everywhere the rental market is tight and tourism high, including large coastal cities.

_delirium 9y ago
Large cities do have prices impacted, but because of the larger existing population it takes a lot more to completely push out residents. They still operate as cities, with people living and working there year-round, businesses that don't exclusively cater to tourists, etc. Regardless of how many New Yorkers complain about tourists, New York as a functioning city with residents is not on the verge of disappearing. Smaller tourist-heavy towns really are being almost completely replaced with seasonal rentals in some cases though, to such an extent that the town more or less ceases to exist as a functioning town, and turns more into a seasonal amusement park. In addition to mountain towns in the U.S., you see this in a lot of smaller European towns and cities, where especially in quaint historic areas nobody actually lives there anymore. Again usually below a certain size. Despite the AirBnBs, Paris is still a real city, but Venice is pretty much on life support (the old town has lost 70% of its population over the past few decades). Although AirBnB is only one factor in all of this. With Venice it started with mass conversion to regular B&Bs, and in some areas it's more just traditional purchase/rental of vacation homes (Londoners buying up 2nd homes in Cornwall is what's pushed locals out of towns like St. Ives).
- m_mueller 9y ago
  Yes exactly. As an example in Switzerland the phenomenon predates the BnB boom by at least two decades. It has lead to a new law that tries to limit the 2nd home ratio for each town - not sure how successful this is though.
  - MrMorden 9y ago
    If the amount of second homes and STRs is causing a problem, it's perfectly reasonable for the government to tax them. As an example, UK councils are allowed to charge 50% more tax on homes that have been empty for more than two years (100% and one year in Scotland); if 19% of the town's rental stock has been converted to STR, that's a sizable revenue stream for rent subsidies and other programs. That said, the only way to guarantee affordable housing is to build more housing.
    - _delirium 9y ago
      Unfortunately the 50% "empty homes premium" excludes furnished properties, which means in practice almost all STR and 2nd-home properties escape it, so it doesn't really benefit councils like Cornwall that have a large proportion of such properties. The requirements are "unoccupied and unfurnished for 2 years or more" [1]. It seems more effective as an anti-blight law than anything else, encouraging people who have completely empty and unused property to sell it to someone who will do something with it. It's also supposed to target pure investment properties that people haven't even bothered to furnish, like those said to be owned by Russian oligarchs in London. Although I wonder if it will be effective there, since an investor can simply hire a company to throw some IKEA furniture in the apartment. I'm not entirely sure if those were the goals, or if it started out life as a stronger proposal that ended up watered down. As is it's a bit confusing, since it seems to have a pretty narrow range of application that's easy to dodge. [1] https://www.gov.uk/government/publications/council-tax-empty-homes-premium https://www.gov.uk/government/publications/council-tax-empty...
      - MrMorden 9y ago
        Council tax increases also wouldn't have much of an effect on empty properties in central London because of the band system; tax on a property in Kensington would max out at £2124.04 before surcharges, or 0.02% on a £10M house. The property tax on a comparable house in Manhattan (based on checking MLS records for listings in Chelsea and picking a $13M townhouse) would be $44 000/year.
Sir_Substance 9y ago
AirBnB has increased the price of Reykjavik rent from an average of ~150k p/m (approx $1500USD) to ~250k p/m in two years. 44% of the Reykjavik rental market is on AirBnB[1]. The government passed laws limiting how much a private individual can AirBnB their property, but they forgot to specify which department should enforce the law, so at the moment no one is enforcing it. Things are starting to come to a head. Keep an eye on us, we're gonna be a tracer bullet for how the rest of the world might react. [1] https://grapevine.is/news/2017/05/31/90-airbnb-increase-44-of-rental-market-listed/ https://grapevine.is/news/2017/05/31/90-airbnb-increase-44-o...

Large cities do have prices impacted, but because of the larger existing population it takes a lot more to completely push out residents. They still operate as cities, with people living and working there year-round, businesses that don't exclusively cater to tourists, etc. Regardless of how many New Yorkers complain about tourists, New York as a functioning city with residents is not on the verge of disappearing. Smaller tourist-heavy towns really are being almost completely replaced with seasonal rentals in some cases though, to such an extent that the town more or less ceases to exist as a functioning town, and turns more into a seasonal amusement park. In addition to mountain towns in the U.S., you see this in a lot of smaller European towns and cities, where especially in quaint historic areas nobody actually lives there anymore. Again usually below a certain size. Despite the AirBnBs, Paris is still a real city, but Venice is pretty much on life support (the old town has lost 70% of its population over the past few decades). Although AirBnB is only one factor in all of this. With Venice it started with mass conversion to regular B&Bs, and in some areas it's more just traditional purchase/rental of vacation homes (Londoners buying up 2nd homes in Cornwall is what's pushed locals out of towns like St. Ives).

m_mueller 9y ago
Yes exactly. As an example in Switzerland the phenomenon predates the BnB boom by at least two decades. It has lead to a new law that tries to limit the 2nd home ratio for each town - not sure how successful this is though.
- MrMorden 9y ago
  If the amount of second homes and STRs is causing a problem, it's perfectly reasonable for the government to tax them. As an example, UK councils are allowed to charge 50% more tax on homes that have been empty for more than two years (100% and one year in Scotland); if 19% of the town's rental stock has been converted to STR, that's a sizable revenue stream for rent subsidies and other programs. That said, the only way to guarantee affordable housing is to build more housing.
  - _delirium 9y ago
    Unfortunately the 50% "empty homes premium" excludes furnished properties, which means in practice almost all STR and 2nd-home properties escape it, so it doesn't really benefit councils like Cornwall that have a large proportion of such properties. The requirements are "unoccupied and unfurnished for 2 years or more" [1]. It seems more effective as an anti-blight law than anything else, encouraging people who have completely empty and unused property to sell it to someone who will do something with it. It's also supposed to target pure investment properties that people haven't even bothered to furnish, like those said to be owned by Russian oligarchs in London. Although I wonder if it will be effective there, since an investor can simply hire a company to throw some IKEA furniture in the apartment. I'm not entirely sure if those were the goals, or if it started out life as a stronger proposal that ended up watered down. As is it's a bit confusing, since it seems to have a pretty narrow range of application that's easy to dodge. [1] https://www.gov.uk/government/publications/council-tax-empty-homes-premium https://www.gov.uk/government/publications/council-tax-empty...
    - MrMorden 9y ago
      Council tax increases also wouldn't have much of an effect on empty properties in central London because of the band system; tax on a property in Kensington would max out at £2124.04 before surcharges, or 0.02% on a £10M house. The property tax on a comparable house in Manhattan (based on checking MLS records for listings in Chelsea and picking a $13M townhouse) would be $44 000/year.

Sir_Substance 9y ago

AirBnB has increased the price of Reykjavik rent from an average of ~150k p/m (approx $1500USD) to ~250k p/m in two years. 44% of the Reykjavik rental market is on AirBnB[1]. The government passed laws limiting how much a private individual can AirBnB their property, but they forgot to specify which department should enforce the law, so at the moment no one is enforcing it. Things are starting to come to a head. Keep an eye on us, we're gonna be a tracer bullet for how the rest of the world might react. [1] https://grapevine.is/news/2017/05/31/90-airbnb-increase-44-of-rental-market-listed/ https://grapevine.is/news/2017/05/31/90-airbnb-increase-44-o...