6 ms·

Almost agree with you - but I would put that at 90%. The short-term rentals, and rentals in general are definitely part of the problem. I strongly believe, tha

Almost agree with you - but I would put that at 90%. The short-term rentals, and rentals in general are definitely part of the problem. I strongly believe, that we should help people buy their first home and increasingly tax the second, third etc. In several developed countries, it's very lucrative for rich / upper middle class people to use their credit capability to just buy another house and rent it out - with tax incentives and deduction, it basically pays for itself over time. While the young renter who is living in it, do not have this possibility.

alephnerd 3y ago
> use their credit capability to just buy another house Hence why most Western countries have jacked up interest rates, and will have to keep them quite high for the next several years.
- scruple 3y ago
  But in a very real sense that's just pulling the ladder up and further securing the position of those who got there first. Something else / additionally has to happen here.
  - alephnerd 3y ago
    How do you force house prices to drop when 1. THERE IS A LABOR SHORTAGE IN CONSTRUCTION 2. ZONING WILL NEVER BE REFORMED AT THE LOCAL LEVEL 3. EVERYONE ASSUMES THE PRICE OF HOUSING WILL CONTINUE TO GROW MORE THAN INFLATION All 3 highlight a broken market due to inflated costs. The only solution is to slow the market down and play chicken with owners. > pulling the ladder up and further securing the position of those who got there first Such is life. You can't drastically change a market overnight. You'll get voted out of office. Welcome to the late 70s. This is how it was then too. Be happy we don't have a Volcker
    - medvezhenok 3y ago
      Nationwide rent control. We've done it once before (World War 2 - in that case it was even retroactive, so you couldn't hike rents in anticipation), and it increased homeownership rate by the highest rate in the 20th century (something like 5% jump in a few years) by making leasing less profitable than selling. Would also have to be combined with more building, but it does work. If you make investing in real estate less appealing (via rent control), people will sell - unless they're just hiding money (i.e. overseas investors). You would probably have to go on a crusade in order to promote it, and it would require a massive anti-landowner propaganda push (of the sort that existed during WWII), but it's theoretically doable.
      - alephnerd 3y ago
        WW2 was done via the War Powers Acts, and being at war with half the world is a bit of an edge case. Also the mechanism used to do that was ruled unconstitutional after WW2 [0] > it's theoretically doable So is a constitutional amendment banning sloppy blowjobs but that is completely unrealistic. Jesus HN has gotten dumb. [0] - https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=2122&context=law_lawreview https://openscholarship.wustl.edu/cgi/viewcontent.cgi?articl...
      - bombcar 3y ago
        Rent control has worked spectacularly well everywhere it has been tried, and never has any downsides. I mean that’s the theory, right? It’s never been truly tried?
        runsWphotons 3y ago
        There are great new ideas here though like seizing all the beachfront vacation homes
        lotsofpulp 3y ago
        The great idea is to greatly increase property prices on unused/underutilized land/non primary homes. I would even tie some portion of primary home property tax to the density of people living on a lot.
huevosabio 3y ago
If short-term rentals were a problem, you cold just build more until you have abundance of shelter. Anyway, short-term rentals are basically a symptom of making it hard to build hotels. Most of the time staying at a hotel is much more comfortable than staying at an airbnb.
- kelnos 3y ago
  > Most of the time staying at a hotel is much more comfortable than staying at an airbnb. Sometimes! If I'm staying in a place for more than just a few days, I want a full kitchen. That's pretty rare to find in a hotel. Even small efficiency kitchens are pretty rare. And in most markets I can rent an Airbnb with a full kitchen for much cheaper than a hotel room with any kind of kitchen. Beyond that, I generally prefer the Airbnb experience over that of a hotel. I know I don't speak for everyone there, but I think there are quite a few people with my preferences.
  - pfannkuchen 3y ago
    > That's pretty rare to find in a hotel Is that possibly because it is so hard to build hotels, though?
- plorkyeran 3y ago
  I find the entire experience of staying in a hotel to be weird and unpleasant. When I travel I try to rent AirBnBs because I specifically like them better than staying in hotels.
- dionidium 3y ago
  > Most of the time staying at a hotel is much more comfortable than staying at an airbnb. It's trivially easy to see that this isn't true: you probably don't live in a hotel (or a structure resembling one), for example. Why not? The answers to that question generalize to travel.
kelnos 3y ago
No, that's not a problem. If there is demand -- any kind of demand -- whether it's for people's primary residence, a vacation home, or a short-term rental property, you build more. If someone can't find a house because there are short-term rental properties, the solution isn't to force someone to give up their STR, it's to build another house. I absolutely recognize that short-term rentals have other undesirable effects on a neighborhood or building: noise, constant random strangers in the building/area, etc. I think those are reasonable reasons for banning or restricting STRs, but "housing shortage" is not among them. If you have a housing shortage, the solution is to build more housing, full stop.
- TheAlchemist 3y ago
  The thing is, we are talking about building homes and apartments - it's easy to say 'just build more', but harder to do. We would need 'China style' decisions - which ended up with building so many apartments, that they end up with a significant percentage of them being empty, and the ripples of those decision will crush their economy for the years to come.
  - runsWphotons 3y ago
    People have been saying this forever but their economy keeps going along and does not look like it will stop until a dmeographic crisis.
    - TheAlchemist 3y ago
      Well, it's only recently that their home builders and lenders started collapsing. The music has stopped. It will take some time, but the outcome is almost inevitable.
      - runsWphotons 3y ago
        Even if that happens, they will have plenty of housing. Worse things to make too much of abound.
      - 3y ago
bombcar 3y ago
It has only been beneficial to own and rent during times of incredible appreciation. If you do the math over long periods of time, being a landlord is a mugs game.
- TheAlchemist 3y ago
  So why many sophisticated and rich people are doing it ? It's a very good business. In many developed countries, there are very strong incentives for owning several properties. Once you've reached a certain level of wealth, it's basically free for your - since you're buying it with a mortgage. And quite often you can deduce the interest paid, from your taxes. We are effectively subsidizing this behavior, instead of taxing it. Simplifying a bit - you want to put 100k$ to work, and you are wealthy enough so that the bank will lend you whatever you want. A great business is to buy another home, for say 500k$ - the rent and tax deductions will cover your mortgage, so you effectively turn 100k$ to 500k$ over the span of the loan. It's basically using your leverage, which first time buyers simply cannot most of the time. It's an unfair game. In short - the system should be set up in a way that owning a second home should not be a good financial decisions - it should be an expensive decision. If you're rich enough and want to own a second holiday home - no problem. But in the current state of affairs, it's not expensive - it's actually profitable to do that.

alephnerd 3y ago

> use their credit capability to just buy another house Hence why most Western countries have jacked up interest rates, and will have to keep them quite high for the next several years.

scruple 3y ago
But in a very real sense that's just pulling the ladder up and further securing the position of those who got there first. Something else / additionally has to happen here.
- alephnerd 3y ago
  How do you force house prices to drop when 1. THERE IS A LABOR SHORTAGE IN CONSTRUCTION 2. ZONING WILL NEVER BE REFORMED AT THE LOCAL LEVEL 3. EVERYONE ASSUMES THE PRICE OF HOUSING WILL CONTINUE TO GROW MORE THAN INFLATION All 3 highlight a broken market due to inflated costs. The only solution is to slow the market down and play chicken with owners. > pulling the ladder up and further securing the position of those who got there first Such is life. You can't drastically change a market overnight. You'll get voted out of office. Welcome to the late 70s. This is how it was then too. Be happy we don't have a Volcker
  - medvezhenok 3y ago
    Nationwide rent control. We've done it once before (World War 2 - in that case it was even retroactive, so you couldn't hike rents in anticipation), and it increased homeownership rate by the highest rate in the 20th century (something like 5% jump in a few years) by making leasing less profitable than selling. Would also have to be combined with more building, but it does work. If you make investing in real estate less appealing (via rent control), people will sell - unless they're just hiding money (i.e. overseas investors). You would probably have to go on a crusade in order to promote it, and it would require a massive anti-landowner propaganda push (of the sort that existed during WWII), but it's theoretically doable.
    - alephnerd 3y ago
      WW2 was done via the War Powers Acts, and being at war with half the world is a bit of an edge case. Also the mechanism used to do that was ruled unconstitutional after WW2 [0] > it's theoretically doable So is a constitutional amendment banning sloppy blowjobs but that is completely unrealistic. Jesus HN has gotten dumb. [0] - https://openscholarship.wustl.edu/cgi/viewcontent.cgi?article=2122&context=law_lawreview https://openscholarship.wustl.edu/cgi/viewcontent.cgi?articl...
    - bombcar 3y ago
      Rent control has worked spectacularly well everywhere it has been tried, and never has any downsides. I mean that’s the theory, right? It’s never been truly tried?
      - runsWphotons 3y ago
        There are great new ideas here though like seizing all the beachfront vacation homes
        lotsofpulp 3y ago
        The great idea is to greatly increase property prices on unused/underutilized land/non primary homes. I would even tie some portion of primary home property tax to the density of people living on a lot.

huevosabio 3y ago

If short-term rentals were a problem, you cold just build more until you have abundance of shelter. Anyway, short-term rentals are basically a symptom of making it hard to build hotels. Most of the time staying at a hotel is much more comfortable than staying at an airbnb.

kelnos 3y ago
> Most of the time staying at a hotel is much more comfortable than staying at an airbnb. Sometimes! If I'm staying in a place for more than just a few days, I want a full kitchen. That's pretty rare to find in a hotel. Even small efficiency kitchens are pretty rare. And in most markets I can rent an Airbnb with a full kitchen for much cheaper than a hotel room with any kind of kitchen. Beyond that, I generally prefer the Airbnb experience over that of a hotel. I know I don't speak for everyone there, but I think there are quite a few people with my preferences.
- pfannkuchen 3y ago
  > That's pretty rare to find in a hotel Is that possibly because it is so hard to build hotels, though?
plorkyeran 3y ago
I find the entire experience of staying in a hotel to be weird and unpleasant. When I travel I try to rent AirBnBs because I specifically like them better than staying in hotels.
dionidium 3y ago
> Most of the time staying at a hotel is much more comfortable than staying at an airbnb. It's trivially easy to see that this isn't true: you probably don't live in a hotel (or a structure resembling one), for example. Why not? The answers to that question generalize to travel.

kelnos 3y ago

No, that's not a problem. If there is demand -- any kind of demand -- whether it's for people's primary residence, a vacation home, or a short-term rental property, you build more. If someone can't find a house because there are short-term rental properties, the solution isn't to force someone to give up their STR, it's to build another house. I absolutely recognize that short-term rentals have other undesirable effects on a neighborhood or building: noise, constant random strangers in the building/area, etc. I think those are reasonable reasons for banning or restricting STRs, but "housing shortage" is not among them. If you have a housing shortage, the solution is to build more housing, full stop.

TheAlchemist 3y ago
The thing is, we are talking about building homes and apartments - it's easy to say 'just build more', but harder to do. We would need 'China style' decisions - which ended up with building so many apartments, that they end up with a significant percentage of them being empty, and the ripples of those decision will crush their economy for the years to come.
- runsWphotons 3y ago
  People have been saying this forever but their economy keeps going along and does not look like it will stop until a dmeographic crisis.
  - TheAlchemist 3y ago
    Well, it's only recently that their home builders and lenders started collapsing. The music has stopped. It will take some time, but the outcome is almost inevitable.
    - runsWphotons 3y ago
      Even if that happens, they will have plenty of housing. Worse things to make too much of abound.
    - 3y ago

bombcar 3y ago

It has only been beneficial to own and rent during times of incredible appreciation. If you do the math over long periods of time, being a landlord is a mugs game.

TheAlchemist 3y ago
So why many sophisticated and rich people are doing it ? It's a very good business. In many developed countries, there are very strong incentives for owning several properties. Once you've reached a certain level of wealth, it's basically free for your - since you're buying it with a mortgage. And quite often you can deduce the interest paid, from your taxes. We are effectively subsidizing this behavior, instead of taxing it. Simplifying a bit - you want to put 100k$ to work, and you are wealthy enough so that the bank will lend you whatever you want. A great business is to buy another home, for say 500k$ - the rent and tax deductions will cover your mortgage, so you effectively turn 100k$ to 500k$ over the span of the loan. It's basically using your leverage, which first time buyers simply cannot most of the time. It's an unfair game. In short - the system should be set up in a way that owning a second home should not be a good financial decisions - it should be an expensive decision. If you're rich enough and want to own a second holiday home - no problem. But in the current state of affairs, it's not expensive - it's actually profitable to do that.