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The way cities go about targeting airbnb only exacerbates the problem -- they make it harder for tenants to host guests to offset their rental cost -- and thus

The way cities go about targeting airbnb only exacerbates the problem -- they make it harder for tenants to host guests to offset their rental cost -- and thus incentivize property owners to take rental units off the market in favor of the more lucrative option of making them short-term airbnb units instead. Cities should be allowing people to host in their primary residences, whether owned property or as rental tenants, if anyone is allowed to host short term paying guests at all. If airbnb made it harder for property owners to list units on airbnb that weren't their primary residence, while on the other hand allowing renters to offset high rental costs by hosting guests at their primary residence on occasion, i see it as a win-win. The protections major cities give landlords who wish to prevent their rental tenants from hosting on airbnb seem unreasonable until you realize that hoteliers and landlords have more impact on city policies on these things.

hn_throwaway_99 8y ago
Just want to point out that in high-demand urban areas, this proposal would still be expected to cause rents to increase. The amount you can charge for rent is fundamentally limited by the income of your potential renters, but now it becomes income of potential renters plus the amount they could expect to earn by sharing the property out on Airbnb. It's similar to what happened with low interest rates before the housing boom and bust. You'd expect low interest rates would make housing cheaper for buyers, but it also had the effect of causing house prices to rise because now there were more people who could afford to bid on the same housing stock.
- keerthiko 8y ago
  Completely agree. My pet idea is a tax for every bedroom in a residence over the headcount of primary residents. This becomes hairy when deciding what qualifies as a bedroom etc, but it will disincentivize renting properties with spare bedrooms dedicated to Airbnb hosting. This way Airbnb units will primarily be rooms left empty by primary residents traveling. The idea of the sharing economy was supposed to be sharing what you normally use, when you happen to not be using it, with financial incentives to offset your property "rent". Not setting aside resources exclusively for "sharing" in order to profit. That's just subcontracting.
- AnthonyMouse 8y ago
  > The amount you can charge for rent is fundamentally limited by the income of your potential renters, but now it becomes income of potential renters plus the amount they could expect to earn by sharing the property out on Airbnb. If someone who would have paid $250 for a hotel instead pays $50 for a room in someone's house, there is $200 less holding up rents. It's theoretically possible to make the difference up on volume, since more people are willing to pay $50 than $250, but is it really more than five times as many people? And if it was, haven't we just created an enormous economic surplus by giving all those people a place to stay at a price they can afford when they otherwise couldn't have? Meanwhile the upward pressure on rents even in that case would be small, because six times $50 is more than one times $250, but it's not that much more. > It's similar to what happened with low interest rates before the housing boom and bust. You'd expect low interest rates would make housing cheaper for buyers, but it also had the effect of causing house prices to rise because now there were more people who could afford to bid on the same housing stock. Notice that this is only true when supply expansion is constrained. If it costs $50,000 to create an additional housing unit and prices rise from $40,000 to $60,000 because more people can afford a loan, new units would be created until the price stabilizes at the cost of creating new housing. Unless regulations are repeatedly imposed to keep that cost above the existing housing prices and prevent that from happening.

hn_throwaway_99 8y ago

Just want to point out that in high-demand urban areas, this proposal would still be expected to cause rents to increase. The amount you can charge for rent is fundamentally limited by the income of your potential renters, but now it becomes income of potential renters plus the amount they could expect to earn by sharing the property out on Airbnb. It's similar to what happened with low interest rates before the housing boom and bust. You'd expect low interest rates would make housing cheaper for buyers, but it also had the effect of causing house prices to rise because now there were more people who could afford to bid on the same housing stock.

keerthiko 8y ago
Completely agree. My pet idea is a tax for every bedroom in a residence over the headcount of primary residents. This becomes hairy when deciding what qualifies as a bedroom etc, but it will disincentivize renting properties with spare bedrooms dedicated to Airbnb hosting. This way Airbnb units will primarily be rooms left empty by primary residents traveling. The idea of the sharing economy was supposed to be sharing what you normally use, when you happen to not be using it, with financial incentives to offset your property "rent". Not setting aside resources exclusively for "sharing" in order to profit. That's just subcontracting.
AnthonyMouse 8y ago
> The amount you can charge for rent is fundamentally limited by the income of your potential renters, but now it becomes income of potential renters plus the amount they could expect to earn by sharing the property out on Airbnb. If someone who would have paid $250 for a hotel instead pays $50 for a room in someone's house, there is $200 less holding up rents. It's theoretically possible to make the difference up on volume, since more people are willing to pay $50 than $250, but is it really more than five times as many people? And if it was, haven't we just created an enormous economic surplus by giving all those people a place to stay at a price they can afford when they otherwise couldn't have? Meanwhile the upward pressure on rents even in that case would be small, because six times $50 is more than one times $250, but it's not that much more. > It's similar to what happened with low interest rates before the housing boom and bust. You'd expect low interest rates would make housing cheaper for buyers, but it also had the effect of causing house prices to rise because now there were more people who could afford to bid on the same housing stock. Notice that this is only true when supply expansion is constrained. If it costs $50,000 to create an additional housing unit and prices rise from $40,000 to $60,000 because more people can afford a loan, new units would be created until the price stabilizes at the cost of creating new housing. Unless regulations are repeatedly imposed to keep that cost above the existing housing prices and prevent that from happening.