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Some local governments seem to think that residents shouldn't be competing in the same market for bedrooms as business travelers (or travelers generally) that a

Some local governments seem to think that residents shouldn't be competing in the same market for bedrooms as business travelers (or travelers generally) that are willing to spend $200+ per night. Preventing direct competition between the long-term rental and hotel markets is supposed to prevent locals, who provide value to the economy in other ways (income taxes, participation in the employment market, etc.), from having to compete with the price-inelastic demand of short-term travelers. If an apartment can rent for $1000/month in the long-term market, or $200/night in the short-term market, it could provide higher value to its owner on Airbnb while being vacant 83% of the time. But the total value to the community is diminished. Creating so much rental supply that the nightly price of hotel rooms is effectively driven down to the cost of long-term rental (so that long-term renters aren't 'crowded out') would require a massive amount of excess supply. But who would willingly continue building such supply right as returns were falling off a cliff? Like any company, Airbnb should be subject to and comply with local laws.

philwelch 7y ago
> Creating so much rental supply that the nightly price of hotel rooms is effectively driven down to the cost of long-term rental (so that long-term renters aren't 'crowded out') would require a massive amount of excess supply. But who would willingly continue building such supply right as returns were falling off a cliff? Nightly rooms are always going to have a premium over long-term rentals. In a healthy market, this merely accounts for the increased risk and hassle of having a new guest every couple nights instead of having a single tenant for a year or more. It's not actually cost-effective to repurpose inventory unless you have an even-worse shortage in one market than you have in the other. Deliberately separating markets by fiat, incidentally, doesn't really work out, and other instances of this behavior (eg zoning) is another root cause of this problem.
- eigenvector 7y ago
  > It's not actually cost-effective to repurpose inventory unless you have an even-worse shortage in one market than you have in the other. 100% of the inventory on Airbnb is repurposed from elsewhere. People aren't constructing new buildings to list them on Airbnb. Re-purposing inventory is far more cost effective than actually building a new hotel because: - You can't hide a new hotel and would actually need regulatory approval for it, while you can list an existing apartment on Airbnb illegally - You would need to meet the ongoing requirements for a hotel like paying commercial property taxes, having 24/7 staffing and meeting health and safety standards - It doesn't require millions of dollars of capital As a tourist, it's amazing to have the additional options afforded you by Airbnb. It's often cheaper, and even when it isn't it lets you rent types of accommodation that you just won't find from normal hotel businesses. You can stay in parts of town that don't have hotels. I get that. But cities aren't run for tourists, they're run for the people that live in them. A shortage of hotel rooms, at worst, constrains your tourism economy. A shortage of apartments makes your city unlivable. Allowing inventory to move from one market to the other freely may maximize revenue for landlords, but it doesn't serve public policy goals of affordability. Many tourist cities (Paris, Barcelona, etc.) have a shortage of hotel rooms during peak season (try searching the price of a hotel room in central Paris in June). With unrestricted Airbnb, that market can gobble up long-term rental capacity, effectively transforming a tourism industry problem into a widespread affordability crisis. Now try searching Airbnb in Paris for June, and look for the listings in Chinese characters, which will be illegal hostels with 8 or 12 bunk beds crammed into a 1 or 2 bedroom flat, things that no sane person would ever certify as safe for occupation - but that do generate additional profit for their owners. You will also find plenty of 'whole apartment' listings that are available 365 days a year. Of course, introducing more supply for tourists will bring down the cost of tourist accommodation, which will bring more tourists. But does Paris want more tourists? Does Barcelona? Aren't those cities and their voters entitled to decide for themselves? Why won't Airbnb respect the decisions made by the people who live there through their democratically elected governments?
  - philwelch 7y ago
    > 100% of the inventory on Airbnb is repurposed from elsewhere. People aren't constructing new buildings to list them on Airbnb. Sure. That also includes people with 2-3 bedroom homes who only use 1 bedroom and other "part-time bed-and-breakfast" use cases. The original concept was to allow "burst capacity" for peak times. And if all of your existing housing gets consumed by people who list it on Airbnb, then obviously there's a market demand for even more housing, so it will be profitable to construct that housing. Even if people don't construct housing just to list it on Airbnb (are you sure about that?), they might construct housing because there's higher demand for housing. In a healthy market, and in the long run, Airbnb won't actually displace anyone; it'll just lead to the construction of more housing. The problem is that most cities don't allow a sufficient amount of new housing construction. > Now try searching Airbnb in Paris for June, and look for the listings in Chinese characters, which will be illegal hostels with 8 or 12 bunk beds crammed into a 1 or 2 bedroom flat, things that no sane person would ever certify as safe for occupation.... Well then, we should be grateful to Airbnb that they are providing everyone, including Parisian law enforcement, such an easy-to-use search engine for illegal hostels. This isn't exactly a hard problem to solve. > Why won't Airbnb respect the decisions made by the people who live there through their democratically elected governments? I'm not aware of Airbnb, as a company, violating the laws of any of the countries they operate in. If you are, I hope you've told someone.
    - zimpenfish 7y ago
      From https://www.telegraph.co.uk/travel/news/where-is-airbnb-banned-illegal/ https://www.telegraph.co.uk/travel/news/where-is-airbnb-bann... > The local government in Barcelona is embroiled in an ongoing legal dispute with the company. In 2016 the city council fined Airbnb €600,000 for continuing to advertise unlicensed flats. From https://www.investopedia.com/articles/investing/083115/top-cities-where-airbnb-legal-or-illegal.asp https://www.investopedia.com/articles/investing/083115/top-c... > New York City is Airbnb's largest market but, according to the city, as many as two-thirds of Airbnb's listings are illegal. etc.etc. [edited to correct a mispaste]

philwelch 7y ago

> Creating so much rental supply that the nightly price of hotel rooms is effectively driven down to the cost of long-term rental (so that long-term renters aren't 'crowded out') would require a massive amount of excess supply. But who would willingly continue building such supply right as returns were falling off a cliff? Nightly rooms are always going to have a premium over long-term rentals. In a healthy market, this merely accounts for the increased risk and hassle of having a new guest every couple nights instead of having a single tenant for a year or more. It's not actually cost-effective to repurpose inventory unless you have an even-worse shortage in one market than you have in the other. Deliberately separating markets by fiat, incidentally, doesn't really work out, and other instances of this behavior (eg zoning) is another root cause of this problem.

eigenvector 7y ago
> It's not actually cost-effective to repurpose inventory unless you have an even-worse shortage in one market than you have in the other. 100% of the inventory on Airbnb is repurposed from elsewhere. People aren't constructing new buildings to list them on Airbnb. Re-purposing inventory is far more cost effective than actually building a new hotel because: - You can't hide a new hotel and would actually need regulatory approval for it, while you can list an existing apartment on Airbnb illegally - You would need to meet the ongoing requirements for a hotel like paying commercial property taxes, having 24/7 staffing and meeting health and safety standards - It doesn't require millions of dollars of capital As a tourist, it's amazing to have the additional options afforded you by Airbnb. It's often cheaper, and even when it isn't it lets you rent types of accommodation that you just won't find from normal hotel businesses. You can stay in parts of town that don't have hotels. I get that. But cities aren't run for tourists, they're run for the people that live in them. A shortage of hotel rooms, at worst, constrains your tourism economy. A shortage of apartments makes your city unlivable. Allowing inventory to move from one market to the other freely may maximize revenue for landlords, but it doesn't serve public policy goals of affordability. Many tourist cities (Paris, Barcelona, etc.) have a shortage of hotel rooms during peak season (try searching the price of a hotel room in central Paris in June). With unrestricted Airbnb, that market can gobble up long-term rental capacity, effectively transforming a tourism industry problem into a widespread affordability crisis. Now try searching Airbnb in Paris for June, and look for the listings in Chinese characters, which will be illegal hostels with 8 or 12 bunk beds crammed into a 1 or 2 bedroom flat, things that no sane person would ever certify as safe for occupation - but that do generate additional profit for their owners. You will also find plenty of 'whole apartment' listings that are available 365 days a year. Of course, introducing more supply for tourists will bring down the cost of tourist accommodation, which will bring more tourists. But does Paris want more tourists? Does Barcelona? Aren't those cities and their voters entitled to decide for themselves? Why won't Airbnb respect the decisions made by the people who live there through their democratically elected governments?
- philwelch 7y ago
  > 100% of the inventory on Airbnb is repurposed from elsewhere. People aren't constructing new buildings to list them on Airbnb. Sure. That also includes people with 2-3 bedroom homes who only use 1 bedroom and other "part-time bed-and-breakfast" use cases. The original concept was to allow "burst capacity" for peak times. And if all of your existing housing gets consumed by people who list it on Airbnb, then obviously there's a market demand for even more housing, so it will be profitable to construct that housing. Even if people don't construct housing just to list it on Airbnb (are you sure about that?), they might construct housing because there's higher demand for housing. In a healthy market, and in the long run, Airbnb won't actually displace anyone; it'll just lead to the construction of more housing. The problem is that most cities don't allow a sufficient amount of new housing construction. > Now try searching Airbnb in Paris for June, and look for the listings in Chinese characters, which will be illegal hostels with 8 or 12 bunk beds crammed into a 1 or 2 bedroom flat, things that no sane person would ever certify as safe for occupation.... Well then, we should be grateful to Airbnb that they are providing everyone, including Parisian law enforcement, such an easy-to-use search engine for illegal hostels. This isn't exactly a hard problem to solve. > Why won't Airbnb respect the decisions made by the people who live there through their democratically elected governments? I'm not aware of Airbnb, as a company, violating the laws of any of the countries they operate in. If you are, I hope you've told someone.
  - zimpenfish 7y ago
    From https://www.telegraph.co.uk/travel/news/where-is-airbnb-banned-illegal/ https://www.telegraph.co.uk/travel/news/where-is-airbnb-bann... > The local government in Barcelona is embroiled in an ongoing legal dispute with the company. In 2016 the city council fined Airbnb €600,000 for continuing to advertise unlicensed flats. From https://www.investopedia.com/articles/investing/083115/top-cities-where-airbnb-legal-or-illegal.asp https://www.investopedia.com/articles/investing/083115/top-c... > New York City is Airbnb's largest market but, according to the city, as many as two-thirds of Airbnb's listings are illegal. etc.etc. [edited to correct a mispaste]