3 ms·

Here's a real world example of supply being diminished by demand for housing as a non-primary residence. A family member I spoke with a couple of weeks ago is

by tmnvix 3y ago

Here's a real world example of supply being diminished by demand for housing as a non-primary residence. A family member I spoke with a couple of weeks ago is planning to purchase an apartment in the city to make it easier to visit their grandchildren. They won't be selling their primary residence to do this (but will be using equity from that residence). They will also subsidise the purchase via AirBnB. This is an example of a home being removed from the stock of housing available to be used as a primary residence. I don't believe that this situation is all that unique - though thirty years ago this would have been as people in their circumstance would not have been able to do this (due to low capital appreciation and lack of a large short term rental market).

astrange 3y ago
That is not very harmful because an apartment is a small box in the sky, and not filling it doesn't use up the land it's on top of, since there's other units in the building. Similarly, you can make up for it by adding more small boxes in the sky. Also, they may plan to do this, but investments involve risk and they may go out of business (sell the apartment) if it doesn't actually go like they expect it to.
- BHSPitMonkey 3y ago
  Where did they say it was a high-rise?
  - astrange 3y ago
    Infill development means everyone eventually gets to be a high-rise.
    - BHSPitMonkey 3y ago
      This statement has a track record for being false the vast majority of the time, but okay.
hackerlight 3y ago
You're talking about investment demand, not the rental market. The two are mostly unrelated. Because most investment properties are made available to tenants since investors want to make money. Even if 20% aren't available because of AirBnB, all you have to do is build more and that 20% that's missing will be quickly dwarfed by new housing. What you've done is a very common mistake: the conflation of property buying with property renting. The two markets have very different dynamics, and rent is much easier to address by simply increasing supply of housing. High rents are the most urgent problem to address. It's harder to make everyone a property owner but at least don't crush them under the weight of rent. We're lucky that it's easy to address rents by increasing supply.

by tmnvix 3y ago

astrange 3y ago

That is not very harmful because an apartment is a small box in the sky, and not filling it doesn't use up the land it's on top of, since there's other units in the building. Similarly, you can make up for it by adding more small boxes in the sky. Also, they may plan to do this, but investments involve risk and they may go out of business (sell the apartment) if it doesn't actually go like they expect it to.

BHSPitMonkey 3y ago
Where did they say it was a high-rise?
- astrange 3y ago
  Infill development means everyone eventually gets to be a high-rise.
  - BHSPitMonkey 3y ago
    This statement has a track record for being false the vast majority of the time, but okay.

hackerlight 3y ago

You're talking about investment demand, not the rental market. The two are mostly unrelated. Because most investment properties are made available to tenants since investors want to make money. Even if 20% aren't available because of AirBnB, all you have to do is build more and that 20% that's missing will be quickly dwarfed by new housing. What you've done is a very common mistake: the conflation of property buying with property renting. The two markets have very different dynamics, and rent is much easier to address by simply increasing supply of housing. High rents are the most urgent problem to address. It's harder to make everyone a property owner but at least don't crush them under the weight of rent. We're lucky that it's easy to address rents by increasing supply.