4 ms·

The problem I often see in these discussions is a lack of conversation around key areas: 1. Why are short-term rental units so popular with the renters? Why

The problem I often see in these discussions is a lack of conversation around key areas: 1. Why are short-term rental units so popular with the renters? Why has the traditional market in this space fallen off and what can they do to adjust to new expectations by consumers. 2. Why are short-term rental units so popular with the owners? In the Toronto area for example I've heard from several unit owners that they would rather lose money than rent in the trad manner due to how far the rental laws have swung that makes evictions nearly impossible. 3. Specifically here in Canada these sorts of conversations always feel like a smoke screen or a way to find a useful idiot to get the masses angry with rather than addressing the core problem. In Canada our core issue is immigration policies that over the last 2 decades haven't been linked in anyway with capacity of housing, schools, healthcare etc.

apwell23 2y ago
I use it because they have kitchen. It lets me eat healthy food on my travel for resonable cost.
- wincy 2y ago
  Same. I’m traveling with our family of four tonight to visit an elderly relative, we’re meeting halfway. If we stayed in a hotel, we’d need two rooms, we’d have to pay for restaurant food. My wife has a Walmart grocery pickup order we’ll grab when we get there. We’ll eat good food and not break the bank. Also, although we looked, there’s no obvious “third space” we could meet at and hang out for 8 hours or so. The Airbnb is the best value hands down. We get to live in another city for two days.
  - mschuster91 2y ago
    > The Airbnb is the best value hands down. We get to live in another city for two days. Don't y'all have stuff like legit short term rental apartments in the US?! Here in Europe, almost every tourist destination will have such places, you can find and book them on the aptly named website. Hell in a pinch there's also what we call "Monteurzimmer", basically a hostel with a few shared kitchens, they're aimed for tradespeople from out of town during the week, and on weekends they're a cheap stay for travelers on a budget. All of these are legitimate licensed operations that pay taxes, have to follow fire and general safety codes, and don't annoy their neighbors.
    - apwell23 2y ago
      I've stayed at hostels too. Harder with kids though.
  - toxik 2y ago
    It’s crazy though, why can’t hotels do this? I have stayed in apartment hotels, kitchen, living room, bed room. Nothing fancy, but so much better than a hotel precisely for the reasons you listed.
alistairSH 2y ago
1. They’re popular because they’re often better than hotels. You get a kitchen, more space, often dog-friendly. I much prefer a STR for weeklong trips for those reasons. 2. More revenue. A STR might go for $200/night. So 10-15 nights to clear the same as a monthly lease. Plus the legal difficulty dealing with a bad tenant, as you note.
neom 2y ago
I know people who live in airbnbs because bad/no credit or can't afford first + last + security.
- nverno 2y ago
  Isn't that a lot more expensive?
  - monkeywork 2y ago
    wait until you hear about payday loans...
  - marcus0x62 2y ago
    Sure, but a lot of poor people get stuck in situations where they pay far more over time because they either can't get good loan terms or can't save up enough money (like rental deposits) to avoid higher-cost rental items. See also: "rent to own", the trailer park industry, payday loans, buy-here/pay-here car lots, etc. Being poor can be very expensive.
  - largbae 2y ago
    Yes and so are payday loans. Once you're financially wounded the vultures begin to circle.
  - eschaton 2y ago
    It’s extremely expensive to be poor. Often you wind up paying a lot more over time because you never accumulate the necessary up-front capital to pick the option that will cost less over the long term. Terry Pratchett had a perfect example of this involving boots, look it up. In the United States, it used to be that only the poorest people lived paycheck-to-paycheck, but now most people do. This means ever more people are subject to this “poverty trap” at every level of society: They can’t make rational long-term choices because they only have the capital and credit to make rational short-term choices. Of course, since the least expensive options in most spending categories provide the least value for the money, someone is getting that surplus value—which Wall Street just loves, since it makes numbers go up.
armchairhacker 2y ago
Anecdotally I used a short-term rental because I was staying in a foreign country on a 6-month visa. Short-term rentals jacking up prices are a problem for that country and many others, and I was contributing to the problem, but it was important for me to go and AFAIK there aren’t other options. I wouldn’t have minded staying in the country longer but the visa and my contract don’t work that way. EDIT: I also looked at hotels. I would’ve been fine with a half-decent hotel room that had a kitchen, but all hotels I saw were more expensive than the rental.
- darioush 2y ago
  Doesn't the income for the jacked up prices also accrue to that community though? IMO it is not respectable to take someones money and give them a visa then act like they are a problem or unwelcome.
scoofy 2y ago
Short term rentals are so popular because the operators aren’t in the business of operating a short term rental. They are in the business of asset appreciation, and a short term rental is a twofer: you increase the housing shortage by removing a unit from the market, while maintaining an revenue stream to offset the cost of depreciation. The business model is completely built on rent seeking and would collapse rapidly if it was just legal to let housing supply meet demand. Instead, there are no voters in the jurisdiction to change the laws, because the vast majority of the electorate all gains from the rent seeking behavior. The people who suffer are the minority who literally were not alive when the housing shortage began.
- darioush 2y ago
  The fix is to require residential properties be owned by individuals and place a limit on how many homes one household can own (3?) without incurring luxury taxation. Then we can let the short/long term rental market sort itself out and also allow people to invest in real estate at a reasonable rate.
  - scoofy 2y ago
    It doesn't matter if one person owns 20 properties in a neighborhood to engage in rent seeking behavior or if 10 people own two properties. The result is the same. The problem is that the market is broken, there is a shortage, and the shortage is perpetuated by cartel-like behavior by the local homeowning electorate. Given that we probably won't fix that, I think that if you want to operate a B&B, you should be allowed to operate a B&B, but if you are going to get out of the business of operating a B&B, you should have a cool down period of 3-5 years (enough for the operator to take on real market risk). That means that the business must only be in the business of operating as a B&B and until that cool down period ends, and then can be converted back into a residence. This is a non-trivial amount of time, and it means that people in the business of short-term rentals can't necessarily just causally operate them, because if there is a housing slump, they won't be able to exit their position quickly. This is a massive disincentive to folks trying to operate a B&B to facilitate asset appreciation, but is not a significant impediment for people who want to operate a B&B as a going concern. This solution invites all kinds of problems, like black and grey markets for housing, but that's because this isn't a real solution. The real solution is to just legalize density and let people build as many residences as they want on property they own. It also helps to have a property tax that incentivizes maximal utility of real estate and disincentivizes hoarding.
jackcosgrove 2y ago
I wonder why STRs are so popular with lessors. All I have heard is that the unit economics are tough and the market is saturated in many places. I also expect a history as an STR to reduce resale value as it's sort of like buying a used rental car with more wear and tear. I would caution anyone with a sweet, sweet mortgage rate looking to trade up their personal residence and hold onto the original as an STR to do the math before going down that route.

apwell23 2y ago

I use it because they have kitchen. It lets me eat healthy food on my travel for resonable cost.

wincy 2y ago
Same. I’m traveling with our family of four tonight to visit an elderly relative, we’re meeting halfway. If we stayed in a hotel, we’d need two rooms, we’d have to pay for restaurant food. My wife has a Walmart grocery pickup order we’ll grab when we get there. We’ll eat good food and not break the bank. Also, although we looked, there’s no obvious “third space” we could meet at and hang out for 8 hours or so. The Airbnb is the best value hands down. We get to live in another city for two days.
- mschuster91 2y ago
  > The Airbnb is the best value hands down. We get to live in another city for two days. Don't y'all have stuff like legit short term rental apartments in the US?! Here in Europe, almost every tourist destination will have such places, you can find and book them on the aptly named website. Hell in a pinch there's also what we call "Monteurzimmer", basically a hostel with a few shared kitchens, they're aimed for tradespeople from out of town during the week, and on weekends they're a cheap stay for travelers on a budget. All of these are legitimate licensed operations that pay taxes, have to follow fire and general safety codes, and don't annoy their neighbors.
  - apwell23 2y ago
    I've stayed at hostels too. Harder with kids though.
- toxik 2y ago
  It’s crazy though, why can’t hotels do this? I have stayed in apartment hotels, kitchen, living room, bed room. Nothing fancy, but so much better than a hotel precisely for the reasons you listed.

alistairSH 2y ago

1. They’re popular because they’re often better than hotels. You get a kitchen, more space, often dog-friendly. I much prefer a STR for weeklong trips for those reasons. 2. More revenue. A STR might go for $200/night. So 10-15 nights to clear the same as a monthly lease. Plus the legal difficulty dealing with a bad tenant, as you note.

neom 2y ago

I know people who live in airbnbs because bad/no credit or can't afford first + last + security.

nverno 2y ago
Isn't that a lot more expensive?
- monkeywork 2y ago
  wait until you hear about payday loans...
- marcus0x62 2y ago
  Sure, but a lot of poor people get stuck in situations where they pay far more over time because they either can't get good loan terms or can't save up enough money (like rental deposits) to avoid higher-cost rental items. See also: "rent to own", the trailer park industry, payday loans, buy-here/pay-here car lots, etc. Being poor can be very expensive.
- largbae 2y ago
  Yes and so are payday loans. Once you're financially wounded the vultures begin to circle.
- eschaton 2y ago
  It’s extremely expensive to be poor. Often you wind up paying a lot more over time because you never accumulate the necessary up-front capital to pick the option that will cost less over the long term. Terry Pratchett had a perfect example of this involving boots, look it up. In the United States, it used to be that only the poorest people lived paycheck-to-paycheck, but now most people do. This means ever more people are subject to this “poverty trap” at every level of society: They can’t make rational long-term choices because they only have the capital and credit to make rational short-term choices. Of course, since the least expensive options in most spending categories provide the least value for the money, someone is getting that surplus value—which Wall Street just loves, since it makes numbers go up.

armchairhacker 2y ago

Anecdotally I used a short-term rental because I was staying in a foreign country on a 6-month visa. Short-term rentals jacking up prices are a problem for that country and many others, and I was contributing to the problem, but it was important for me to go and AFAIK there aren’t other options. I wouldn’t have minded staying in the country longer but the visa and my contract don’t work that way. EDIT: I also looked at hotels. I would’ve been fine with a half-decent hotel room that had a kitchen, but all hotels I saw were more expensive than the rental.

darioush 2y ago
Doesn't the income for the jacked up prices also accrue to that community though? IMO it is not respectable to take someones money and give them a visa then act like they are a problem or unwelcome.

scoofy 2y ago

Short term rentals are so popular because the operators aren’t in the business of operating a short term rental. They are in the business of asset appreciation, and a short term rental is a twofer: you increase the housing shortage by removing a unit from the market, while maintaining an revenue stream to offset the cost of depreciation. The business model is completely built on rent seeking and would collapse rapidly if it was just legal to let housing supply meet demand. Instead, there are no voters in the jurisdiction to change the laws, because the vast majority of the electorate all gains from the rent seeking behavior. The people who suffer are the minority who literally were not alive when the housing shortage began.

darioush 2y ago
The fix is to require residential properties be owned by individuals and place a limit on how many homes one household can own (3?) without incurring luxury taxation. Then we can let the short/long term rental market sort itself out and also allow people to invest in real estate at a reasonable rate.
- scoofy 2y ago
  It doesn't matter if one person owns 20 properties in a neighborhood to engage in rent seeking behavior or if 10 people own two properties. The result is the same. The problem is that the market is broken, there is a shortage, and the shortage is perpetuated by cartel-like behavior by the local homeowning electorate. Given that we probably won't fix that, I think that if you want to operate a B&B, you should be allowed to operate a B&B, but if you are going to get out of the business of operating a B&B, you should have a cool down period of 3-5 years (enough for the operator to take on real market risk). That means that the business must only be in the business of operating as a B&B and until that cool down period ends, and then can be converted back into a residence. This is a non-trivial amount of time, and it means that people in the business of short-term rentals can't necessarily just causally operate them, because if there is a housing slump, they won't be able to exit their position quickly. This is a massive disincentive to folks trying to operate a B&B to facilitate asset appreciation, but is not a significant impediment for people who want to operate a B&B as a going concern. This solution invites all kinds of problems, like black and grey markets for housing, but that's because this isn't a real solution. The real solution is to just legalize density and let people build as many residences as they want on property they own. It also helps to have a property tax that incentivizes maximal utility of real estate and disincentivizes hoarding.

jackcosgrove 2y ago

I wonder why STRs are so popular with lessors. All I have heard is that the unit economics are tough and the market is saturated in many places. I also expect a history as an STR to reduce resale value as it's sort of like buying a used rental car with more wear and tear. I would caution anyone with a sweet, sweet mortgage rate looking to trade up their personal residence and hold onto the original as an STR to do the math before going down that route.