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What portion of the housing supply would need to be Airbnbs to raise rents say 10%? I just can’t seem to get the math to pencil so that the amount of investor
by balderdash 3y ago
What portion of the housing supply would need to be Airbnbs to raise rents say 10%?
I just can’t seem to get the math to pencil so that the amount of investor owned Airbnbs would make a meaningful impact on the rents/prices…
- nprateem 3y ago10%, or is this a trick question?
- xboxnolifes 3y agoIt's not a trick question, and it's not as simple as matching the percentages. Rents can raise by more than 100%, but total supply caps at 100%. If AirBnB controlled every rental unit, rental prices wouldn't go up exactly 100%.
- nprateem 3y agoOf course, but unless you're going to work out the price elasticity of supply/ demand, you might as well just assume it's one as a starting point.
- balderdash 3y agoMy point was more about quantities - assume 1:1 elasticity, there are like 11,000 Airbnbs in nyc (assume all investor owned / 100% dedicated to Airbnb), that’s like 0.3% of the housing stock in NYC. If you sold them all tomorrow it would be like one months sales. My main point being that people expecting any sort of regulation on Airbnb to have an effect on pricing seems naive.
- tmnvix 3y agoAssuming 0.3% and also assuming a rental vacancy rate of 3% (typically reported in many cities), that is a 10% boost to available rentals - so yes, it's significant.
- balderdash 3y agoI think that’s the wrong metric, the velocity is much higher (20-30k new rentals/month which means all the airbnbs would consumed in like 1-2 weeks)