4 ms·

>They aren't externalities and shouldn't be priced in. If people in my city can't afford housing because of AirBnB, it has negative impacts on my city as a who

>They aren't externalities and shouldn't be priced in. If people in my city can't afford housing because of AirBnB, it has negative impacts on my city as a whole. This is an externality, which--by definition--is a thing that isn't priced in. An externality is defined as "a side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved, such as the pollination of surrounding crops by bees kept for honey." >Should the luddites have been compensated by those who operated mechanical looms? UBI advocates might say yes; it's the whole idea that once some threshold of automation is passed, you won't have enough consumers to keep the economy running.

lmm 4y ago
> If people in my city can't afford housing because of AirBnB, it has negative impacts on my city as a whole. This is an externality, which--by definition--is a thing that isn't priced in. That's not an externality - the cost of housing is priced into AirBnB costs. Most "pricing out" happens because cities make it de facto illegal to build new houses, mostly because existing owners are quite happy with the resulting increase in their house prices (and renters don't vote).
- z9znz 4y ago
  I don't remember where it was in the US; maybe it was Cheyanne Wyoming or elsewhere, but it was a nature/mountain area popular with tourists. But their city leaders recognized the problem of tourist vs local housing prices, and they created regulation to ensure that there were enough local houses (affordable to locals). The problem in popular tourist areas is that more wealthy people can afford to come and stay for short periods and are willing to pay a lot, so owners of houses and apartments can make more money off tourists than locals. Naturally they choose the higher income option and go with Airbnb (for example). This leads to situations like Aspen, Colorado, where the "local" who work in Aspen have to live 30-60+ minutes away. They cannot afford to live where they work. And it means that in off seasons, these towns are just dead. Many shops close, there's no community, and there's little life. It might as well be a Disneyland which is only open for 8 months of the year. Amsterdam is a hugely popular tourist area. Granted the atmosphere, architecture, and museums are high value; but sadly I think also the weed focus is high (sorry). Whatever the reason, it means a LOT of tourists. In my small 10 years, I have seen an immense growth. Airbnb and cheap airlines like Ryanair have made it far worse. But to your point of housing prices, there has also been a lot of Chinese and other foreign property investment in Amsterdam (where the owners never intend to live there). Of course they seek to rent their properties, and short term rentals like Airbnb are generally more profitable in tourist areas. Still, this is not good for the cities or locals, and whether it's beneficial for visitors or not is effectively irrelevant. The city is nothing without happy locals.
  - lmm 4y ago
    I've never really understood this locals-as-utility-monsters perspective. Disneyland is great! We should have more Disneylands, and if a town contributes more to human happiness as a Disneyland than it would as a town, that's something to celebrate. Long commutes suck (and I'm 100% in favour of land value taxes and legalised homebuilding so that we can build more homes near where the jobs are), but presumably if people are choosing to work in Aspen despite a long commute then the wages or other benefits are worthwhile even without that.
    - z9znz 4y ago
      I'm not sure I understand the "monsters" bit... But "if a town contributes more to human happiness as a Disneyland" I can speak to. The people who live in small towns in the mountains in Colorado do want and need work, but they also want and need to be able to live. When there are some tourists, it helps provide work. And the locals typically do different jobs depending on the season. But when the area becomes "hot", and remote wealthy people start buying up local property, the locals get priced out. It's essentially gentrification on a small scale. One could argue that the remote wealthy people deserve to have a good life anywhere they go because they can afford it, but it absolutely comes at a cost to local poor people in the areas they travel to. With proper regulation, you have hotels and formal tourist stay locations which extract taxes that can be used to help ensure the local workers get a decent life while catering to the visitors. But without proper regulation or planning, the locals get priced out of their own towns. Realize that low wage workers usually cannot just say, "oh well, it's too expensive here now, so we'll move cross country to find affordable housing and jobs". Airbnb made it worse, because not only is there the traditional gentrification but now also people who own apartments can seek higher rents from tourists than with locals.
      - lmm 4y ago
        > With proper regulation, you have hotels and formal tourist stay locations which extract taxes that can be used to help ensure the local workers get a decent life while catering to the visitors. But without proper regulation or planning, the locals get priced out of their own towns. It's actually mostly the opposite. More money coming into a town tends to lift all boats - unless, like many contemporary American towns, building more homes in town is made de facto illegal through regulations and planning. > Airbnb made it worse, because not only is there the traditional gentrification but now also people who own apartments can seek higher rents from tourists than with locals. Equally those higher rents are possible because you're making tourism possible for people who probably couldn't afford to travel otherwise. The people staying in (regular apartment) Airbnbs tend to be lower-middle-class at best, and I don't think we should automatically care more about locals than tourists just because they happened to be born somewhere nice.
- p0pcult 4y ago
  Is the cost of housing the people who can no longer afford rent or houses because of AirBnB factored into the cost of AirBnB? No. Therefore, externality.
  - lmm 4y ago
    > Is the cost of housing the people who can no longer afford rent or houses because of AirBnB factored into the cost of AirBnB? Yes - the market-clearing price of housing reflects all the demand for housing, whether that's being paid by renters, AirBnB, local authorities or whoever.
  - s1artibartfast 4y ago
    People often mistake causality for externality, so much so the outside of Economics circles the two are being conflated. Airbnb can cause rent to go up, but that doesn't make it an externality. An externality is an input that you're using up or an output that you're not paying for. Businesses and individuals can have all kinds of negative effects on others that are not externalities.

lmm 4y ago

> If people in my city can't afford housing because of AirBnB, it has negative impacts on my city as a whole. This is an externality, which--by definition--is a thing that isn't priced in. That's not an externality - the cost of housing is priced into AirBnB costs. Most "pricing out" happens because cities make it de facto illegal to build new houses, mostly because existing owners are quite happy with the resulting increase in their house prices (and renters don't vote).

z9znz 4y ago
I don't remember where it was in the US; maybe it was Cheyanne Wyoming or elsewhere, but it was a nature/mountain area popular with tourists. But their city leaders recognized the problem of tourist vs local housing prices, and they created regulation to ensure that there were enough local houses (affordable to locals). The problem in popular tourist areas is that more wealthy people can afford to come and stay for short periods and are willing to pay a lot, so owners of houses and apartments can make more money off tourists than locals. Naturally they choose the higher income option and go with Airbnb (for example). This leads to situations like Aspen, Colorado, where the "local" who work in Aspen have to live 30-60+ minutes away. They cannot afford to live where they work. And it means that in off seasons, these towns are just dead. Many shops close, there's no community, and there's little life. It might as well be a Disneyland which is only open for 8 months of the year. Amsterdam is a hugely popular tourist area. Granted the atmosphere, architecture, and museums are high value; but sadly I think also the weed focus is high (sorry). Whatever the reason, it means a LOT of tourists. In my small 10 years, I have seen an immense growth. Airbnb and cheap airlines like Ryanair have made it far worse. But to your point of housing prices, there has also been a lot of Chinese and other foreign property investment in Amsterdam (where the owners never intend to live there). Of course they seek to rent their properties, and short term rentals like Airbnb are generally more profitable in tourist areas. Still, this is not good for the cities or locals, and whether it's beneficial for visitors or not is effectively irrelevant. The city is nothing without happy locals.
- lmm 4y ago
  I've never really understood this locals-as-utility-monsters perspective. Disneyland is great! We should have more Disneylands, and if a town contributes more to human happiness as a Disneyland than it would as a town, that's something to celebrate. Long commutes suck (and I'm 100% in favour of land value taxes and legalised homebuilding so that we can build more homes near where the jobs are), but presumably if people are choosing to work in Aspen despite a long commute then the wages or other benefits are worthwhile even without that.
  - z9znz 4y ago
    I'm not sure I understand the "monsters" bit... But "if a town contributes more to human happiness as a Disneyland" I can speak to. The people who live in small towns in the mountains in Colorado do want and need work, but they also want and need to be able to live. When there are some tourists, it helps provide work. And the locals typically do different jobs depending on the season. But when the area becomes "hot", and remote wealthy people start buying up local property, the locals get priced out. It's essentially gentrification on a small scale. One could argue that the remote wealthy people deserve to have a good life anywhere they go because they can afford it, but it absolutely comes at a cost to local poor people in the areas they travel to. With proper regulation, you have hotels and formal tourist stay locations which extract taxes that can be used to help ensure the local workers get a decent life while catering to the visitors. But without proper regulation or planning, the locals get priced out of their own towns. Realize that low wage workers usually cannot just say, "oh well, it's too expensive here now, so we'll move cross country to find affordable housing and jobs". Airbnb made it worse, because not only is there the traditional gentrification but now also people who own apartments can seek higher rents from tourists than with locals.
    - lmm 4y ago
      > With proper regulation, you have hotels and formal tourist stay locations which extract taxes that can be used to help ensure the local workers get a decent life while catering to the visitors. But without proper regulation or planning, the locals get priced out of their own towns. It's actually mostly the opposite. More money coming into a town tends to lift all boats - unless, like many contemporary American towns, building more homes in town is made de facto illegal through regulations and planning. > Airbnb made it worse, because not only is there the traditional gentrification but now also people who own apartments can seek higher rents from tourists than with locals. Equally those higher rents are possible because you're making tourism possible for people who probably couldn't afford to travel otherwise. The people staying in (regular apartment) Airbnbs tend to be lower-middle-class at best, and I don't think we should automatically care more about locals than tourists just because they happened to be born somewhere nice.
p0pcult 4y ago
Is the cost of housing the people who can no longer afford rent or houses because of AirBnB factored into the cost of AirBnB? No. Therefore, externality.
- lmm 4y ago
  > Is the cost of housing the people who can no longer afford rent or houses because of AirBnB factored into the cost of AirBnB? Yes - the market-clearing price of housing reflects all the demand for housing, whether that's being paid by renters, AirBnB, local authorities or whoever.
- s1artibartfast 4y ago
  People often mistake causality for externality, so much so the outside of Economics circles the two are being conflated. Airbnb can cause rent to go up, but that doesn't make it an externality. An externality is an input that you're using up or an output that you're not paying for. Businesses and individuals can have all kinds of negative effects on others that are not externalities.