11 ms·

Short term rentals being more profitable than actual homes for people, this means that (i) rents, already a grueling expense for many people, are pushed up, the

Short term rentals being more profitable than actual homes for people, this means that (i) rents, already a grueling expense for many people, are pushed up, the consequences being (ii) people either cough up and become even poorer, or more likely move away from the city centres and spend time and money commuting, meaning (iii) popular destinations become hollow theme parks for tourists, while actual residents are shafted in every possible way. In short, in a city like Lisbon, good luck being a student for example. Pay upwards of 500$/mo (or for perspective, 75% monthly minimum wage) for a room in a shared house, or live a 1h30 commute away from campus.

deleted 6y ago
[deleted]
santoshalper 6y ago
So I've heard this argument before, but I'm not sure I entirely get it. Wouldn't people coming to Lisbon just stay somewhere else if short-term rentals didn't exist - like a hotel that is likely owned by a massive corporation? How would that be better? I guess that way I look at it is that people want to visit cities for a variety of reasons. Those people need to stay somewhere. Wherever they stay will take up space, thus driving up rents through land scarcity. I am not really sure how people staying in someone's apartment is much worse than staying in a hotel. If rents are going up, it's because there is more demand than supply. Unless Airbnb is actually increasing demand (perhaps?), I don't see how it is really affecting this equation.
- fnordian_slip 6y ago
  Of course they are increasing demand by being cheaper (because they can ignore fire safety regulations and a ton of others that hotels have to follow, therefore having an unfair advantage). They are increasing demand in the same way more and bigger roads do not reduce but instead increase traffic. This paradox is well-known among city planners (but often ignored by those who make the decisions because it is counterintuitive). In addition to that they can ignore zoning laws and therefore move rent prices up in areas where hotels are not allowed to be.
  - AnthonyMouse 6y ago
    > Of course they are increasing demand by being cheaper (because they can ignore fire safety regulations and a ton of others that hotels have to follow, therefore having an unfair advantage). This seems like a regulatory arbitrage that shouldn't exist to begin with. Why should the fire safety regulations for a hotel be dramatically different in expense than the ones for the equivalent apartment complex? > They are increasing demand in the same way more and bigger roads do not reduce but instead increase traffic. People consistently get this wrong. Bigger roads don't increase traffic. Congestion suppresses traffic. If there is a congested two lane road because it's carrying traffic that would require a four lane road, so then you build a four lane road, you then discover that the four lane road is still congested. Because once you remove some of the congestion, the demand it had been suppressing comes back and you still don't have enough capacity. The distinction is important because there is a point at which you actually have enough road capacity to satisfy the demand that exists when it isn't being suppressed by traffic congestion. It's just more than you might have expected based on the amount of traffic observed when the road was congested. > In addition to that they can ignore zoning laws and therefore move rent prices up in areas where hotels are not allowed to be. The solution to which is to eliminate restrictive zoning like that, so that supply can respond to demand. The primary reason that short-term rentals are zoned differently is local regulatory capture by hotels to limit competition and keep prices high. Without restrictive zoning, short-term rentals don't have to come at the expense of long-term housing because you can build more housing and have both.
    - bildung 6y ago
      The idea that if 4 lanes are not enough we just have to add more lanes, ad infinitum, until we eventually hit the upper limit were traffic won't increase anymore, has, to my knowledge, no empirical foundation. Current knowledge says that "on average, a 10 percent increase in lane miles induces an immediate 4 percent increase in vehicle miles traveled, which climbs to 10 percent – the entire new capacity – in a few years." https://en.wikipedia.org/wiki/Induced_demand https://en.wikipedia.org/wiki/Induced_demand
      - 6y ago
- squiggy22 6y ago
  I have market knowledge in this sector and can confirm the impact. Once the pandemic hit, Airbnb's from private landlords flooded the market due to travel nosediving. see: https://www.nytimes.com/2020/09/21/world/europe/airbnb-dublin-rent.html https://www.nytimes.com/2020/09/21/world/europe/airbnb-dubli...
- skewart 6y ago
  Without AirBnB you would need to convert a house into a hotel in order to use residential real estate to tap into hotel demand. And regulations typically make that hard and expensive. Plus you would need to do some construction work, which also adds to the expense. So strong hotel demand certainly does push up land value overall over time, but it happens much more slowly and to a lesser extent than with AirBnB. AirBnB gives investors a way around hotel regulations and construction costs. You can buy an existing house and with very little friction or cost start generating revenue from tourism demand.
- jitbit 6y ago
  > Wouldn't people coming to Lisbon just stay somewhere else No. They just wouldn't come. AirBnb and discounter-airlines has turned the tourism industry upside down. Now, I do believe, that it's NOT AirBnb "fault" - AirBnb just accelerates the inevitable (like most technologies do) but the impact is still huge. I have friends who live in Lisbon and Barcelona and from their eyes: tourism, that used to be a profitable "fancy" industry - with middle class people bringing their money to spend it - has turned into something different. These days "tourists" can be a group of 12 football fans, who've spent £18 on a RyanAir ticket and all stay in the same Airbnb room (as a group), getting drunk and vomiting on the streets. I'm not saying that's definitely a bad thing (everyone deserves the right to experience travel) I'm just saying I can relate to (many) EU cities opposing this, claiming they're not getting any value from these crowds.
JSavageOne 6y ago
Lack of affordable housing in Lisbon is not some private company in America's fault, it's Lisbon's government's fault. That's like blaming the tech industry for housing shortages in San Francisco. Some people like myself (eg. digital nomads) prefer short term rentals, and AirBnB has changed our lives.
- piva00 6y ago
  > Some people like myself (eg. digital nomads) prefer short term rentals, and AirBnB has changed our lives. Good for you but AirBnB has a proven impact in increasing rent prices for long-term rentals in any touristic city, be it Barcelona, Lisbon, Amsterdam, lots of cities in Europe have suffered from AirBnBs pushing units out of the long-term rental market and being available for people like you. And people like you aren't the majority of the inhabitants of a city, when people that are born and raised in a city are pushed out by pricing due to 10+% of the stock of possible rental units being used as short-term just so landlords can make a bigger buck it's sad and inhumane. Great that from your perspective it's helped you, it's definitely impacted the lives of a lot of young people that were born in the cities you like to live, AirBnBs are eroding exactly what made them attractive: a good city neighbourhood.
  - cpursley 6y ago
    So build more housing
    - piva00 6y ago
      Sure, if it was that simple I believe it would have been solved already. Ignoring the whole political and social aspects of a complex problem is hand-waving a lot, there are different pressures to be considered, different avenues of solutions and even more with housing that is: expensive and has a long turnaround from permit -> completion. But sure, tell every single young person that the solution for them on the next 5 years is to sit down and demand more housing built. What do people do while that's happening? Allow AirBnB to extract money and rent-seekers to gouge prices for the population? That's not how the real world works, I'm sorry.
logifail 6y ago
> in a city like Lisbon, good luck being a student for example. Pay upwards of 500$/mo (or for perspective, 75% monthly minimum wage) for a room in a shared house Data point: around 25 years ago, I was paying GBP225/month - so that's ~USD300 - for a (tiny!) bedroom in a shared house in Cambridge, UK. I'm not sure what approach one would best use to adjust for 25 years of house price and/or general inflation, but isn't that in the same ballpark as your '$500' in Libson now? FWIW, we thought housing was expensive back then, too.
- switch007 6y ago
  What about wages in Cambridge at the time?
  - logifail 6y ago
    > What about wages in Cambridge at the time? We were postgrad students. No idea about average wages for those who were working, but we were always broke.
- zilian 6y ago
  Compared to average revenue in the area, absolutely not
  - logifail 6y ago
    > Compared to average revenue Q: Are we talking about average students or average workers?
    - zilian 6y ago
      Both
- GlennS 6y ago
  Second datapoint to fill in the inflation a bit: 16 years ago I paid £270/month to live in a sharehouse in Bristol (not generally as expensive a place to live in as Cambridge) in a boiler cupboard that had been converted to a bedroom.

deleted 6y ago

[deleted]

santoshalper 6y ago

So I've heard this argument before, but I'm not sure I entirely get it. Wouldn't people coming to Lisbon just stay somewhere else if short-term rentals didn't exist - like a hotel that is likely owned by a massive corporation? How would that be better? I guess that way I look at it is that people want to visit cities for a variety of reasons. Those people need to stay somewhere. Wherever they stay will take up space, thus driving up rents through land scarcity. I am not really sure how people staying in someone's apartment is much worse than staying in a hotel. If rents are going up, it's because there is more demand than supply. Unless Airbnb is actually increasing demand (perhaps?), I don't see how it is really affecting this equation.

fnordian_slip 6y ago
Of course they are increasing demand by being cheaper (because they can ignore fire safety regulations and a ton of others that hotels have to follow, therefore having an unfair advantage). They are increasing demand in the same way more and bigger roads do not reduce but instead increase traffic. This paradox is well-known among city planners (but often ignored by those who make the decisions because it is counterintuitive). In addition to that they can ignore zoning laws and therefore move rent prices up in areas where hotels are not allowed to be.
- AnthonyMouse 6y ago
  > Of course they are increasing demand by being cheaper (because they can ignore fire safety regulations and a ton of others that hotels have to follow, therefore having an unfair advantage). This seems like a regulatory arbitrage that shouldn't exist to begin with. Why should the fire safety regulations for a hotel be dramatically different in expense than the ones for the equivalent apartment complex? > They are increasing demand in the same way more and bigger roads do not reduce but instead increase traffic. People consistently get this wrong. Bigger roads don't increase traffic. Congestion suppresses traffic. If there is a congested two lane road because it's carrying traffic that would require a four lane road, so then you build a four lane road, you then discover that the four lane road is still congested. Because once you remove some of the congestion, the demand it had been suppressing comes back and you still don't have enough capacity. The distinction is important because there is a point at which you actually have enough road capacity to satisfy the demand that exists when it isn't being suppressed by traffic congestion. It's just more than you might have expected based on the amount of traffic observed when the road was congested. > In addition to that they can ignore zoning laws and therefore move rent prices up in areas where hotels are not allowed to be. The solution to which is to eliminate restrictive zoning like that, so that supply can respond to demand. The primary reason that short-term rentals are zoned differently is local regulatory capture by hotels to limit competition and keep prices high. Without restrictive zoning, short-term rentals don't have to come at the expense of long-term housing because you can build more housing and have both.
  - bildung 6y ago
    The idea that if 4 lanes are not enough we just have to add more lanes, ad infinitum, until we eventually hit the upper limit were traffic won't increase anymore, has, to my knowledge, no empirical foundation. Current knowledge says that "on average, a 10 percent increase in lane miles induces an immediate 4 percent increase in vehicle miles traveled, which climbs to 10 percent – the entire new capacity – in a few years." https://en.wikipedia.org/wiki/Induced_demand https://en.wikipedia.org/wiki/Induced_demand
    - 6y ago
squiggy22 6y ago
I have market knowledge in this sector and can confirm the impact. Once the pandemic hit, Airbnb's from private landlords flooded the market due to travel nosediving. see: https://www.nytimes.com/2020/09/21/world/europe/airbnb-dublin-rent.html https://www.nytimes.com/2020/09/21/world/europe/airbnb-dubli...
skewart 6y ago
Without AirBnB you would need to convert a house into a hotel in order to use residential real estate to tap into hotel demand. And regulations typically make that hard and expensive. Plus you would need to do some construction work, which also adds to the expense. So strong hotel demand certainly does push up land value overall over time, but it happens much more slowly and to a lesser extent than with AirBnB. AirBnB gives investors a way around hotel regulations and construction costs. You can buy an existing house and with very little friction or cost start generating revenue from tourism demand.
jitbit 6y ago
> Wouldn't people coming to Lisbon just stay somewhere else No. They just wouldn't come. AirBnb and discounter-airlines has turned the tourism industry upside down. Now, I do believe, that it's NOT AirBnb "fault" - AirBnb just accelerates the inevitable (like most technologies do) but the impact is still huge. I have friends who live in Lisbon and Barcelona and from their eyes: tourism, that used to be a profitable "fancy" industry - with middle class people bringing their money to spend it - has turned into something different. These days "tourists" can be a group of 12 football fans, who've spent £18 on a RyanAir ticket and all stay in the same Airbnb room (as a group), getting drunk and vomiting on the streets. I'm not saying that's definitely a bad thing (everyone deserves the right to experience travel) I'm just saying I can relate to (many) EU cities opposing this, claiming they're not getting any value from these crowds.

JSavageOne 6y ago

Lack of affordable housing in Lisbon is not some private company in America's fault, it's Lisbon's government's fault. That's like blaming the tech industry for housing shortages in San Francisco. Some people like myself (eg. digital nomads) prefer short term rentals, and AirBnB has changed our lives.

piva00 6y ago
> Some people like myself (eg. digital nomads) prefer short term rentals, and AirBnB has changed our lives. Good for you but AirBnB has a proven impact in increasing rent prices for long-term rentals in any touristic city, be it Barcelona, Lisbon, Amsterdam, lots of cities in Europe have suffered from AirBnBs pushing units out of the long-term rental market and being available for people like you. And people like you aren't the majority of the inhabitants of a city, when people that are born and raised in a city are pushed out by pricing due to 10+% of the stock of possible rental units being used as short-term just so landlords can make a bigger buck it's sad and inhumane. Great that from your perspective it's helped you, it's definitely impacted the lives of a lot of young people that were born in the cities you like to live, AirBnBs are eroding exactly what made them attractive: a good city neighbourhood.
- cpursley 6y ago
  So build more housing
  - piva00 6y ago
    Sure, if it was that simple I believe it would have been solved already. Ignoring the whole political and social aspects of a complex problem is hand-waving a lot, there are different pressures to be considered, different avenues of solutions and even more with housing that is: expensive and has a long turnaround from permit -> completion. But sure, tell every single young person that the solution for them on the next 5 years is to sit down and demand more housing built. What do people do while that's happening? Allow AirBnB to extract money and rent-seekers to gouge prices for the population? That's not how the real world works, I'm sorry.

logifail 6y ago

> in a city like Lisbon, good luck being a student for example. Pay upwards of 500$/mo (or for perspective, 75% monthly minimum wage) for a room in a shared house Data point: around 25 years ago, I was paying GBP225/month - so that's ~USD300 - for a (tiny!) bedroom in a shared house in Cambridge, UK. I'm not sure what approach one would best use to adjust for 25 years of house price and/or general inflation, but isn't that in the same ballpark as your '$500' in Libson now? FWIW, we thought housing was expensive back then, too.

switch007 6y ago
What about wages in Cambridge at the time?
- logifail 6y ago
  > What about wages in Cambridge at the time? We were postgrad students. No idea about average wages for those who were working, but we were always broke.
zilian 6y ago
Compared to average revenue in the area, absolutely not
- logifail 6y ago
  > Compared to average revenue Q: Are we talking about average students or average workers?
  - zilian 6y ago
    Both
GlennS 6y ago
Second datapoint to fill in the inflation a bit: 16 years ago I paid £270/month to live in a sharehouse in Bristol (not generally as expensive a place to live in as Cambridge) in a boiler cupboard that had been converted to a bedroom.