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AirBnB is not "reducing the supply", they're increasing the demand. The supply is limited, both artificially and naturally, and the demand is growing mostly nor
by microcolonel 7y ago
AirBnB is not "reducing the supply", they're increasing the demand. The supply is limited, both artificially and naturally, and the demand is growing mostly normally (AirBnB or no).
The local governments get more revenue from high demand (since it increases assessments), and limited supply, so they generally do not have the right incentives to make housing affordable. The public is pretty ignorant in these places, as they should perhaps be allowed to be, so they do not put any pressure on politicians to stop this gambit.
- mc32 7y agoI think that’s two sides of the same coin. If someone’s rent budget meant they had in theory access to say 10% of the units for rent, but AB&B’s additional demand means now their budget only puts 5% of the units available within their range, that effectively reduces their supply (or in other words access).
- microcolonel 7y ago> that effectively reduces their supply No, importantly, it does not reduce the supply. If you want to apply terms like this, pay attention to how they are defined. Access is not supply, and supply is not access. There is an immense supply of housing in Vancouver, and as much as is possible, AirBnB-facilitated demand (although it's really a tiny fraction of the total demand) puts pressure on the market to increase supply (even if the circumstances make that unlikely to succeed greatly). Whether people living in Vancouver are buying their housing through rental agreements, purchases, or short term rentals like AirBnB, the supply will only tend to increase (just not enough that some of it is "cheap"). For an example of high supply with poor access, just look at the tremendous number of low-quality developments across China with few or no legitimate residents.