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But if you look at many cities you'll see that population has not grown significantly. What has happened is Airbnb which has made it viable to take a significa

But if you look at many cities you'll see that population has not grown significantly. What has happened is Airbnb which has made it viable to take a significant portion of the housing stock off the regular market. Just look at the inner cities of many places (e.g. Nice) in the off season, they are completely empty. The other thing is that rents going up dramatically is a global phenomenon, e.g. Australia's building industry is relatively unregulated and it experienced a housing boom (as did many places in Europe btw), and still rents shot through he roof. The argument that high rents are mainly due to large regulations and lack of building is largely not supported by the evidence. I mean, in most Europe there was such a building boom (due to low interest rates) that sand for concrete was getting scarce.

bobthepanda 2y ago
Looking at raw population numbers is misleading. Average household size has declined due to changing social dynamics (longer times before marriage, fewer kids, etc.) so even if population is static you need more units. Spain went from 3 in 1990 to 2.5, which is a pretty drastic change.
AnthonyMouse 2y ago
> What has happened is Airbnb which has made it viable to take a significant portion of the housing stock off the regular market. Suppose this is true. Then you replace that portion of the housing stock with new construction, and what problem is there? The problem is only if you're constrained from doing that. > The other thing is that rents going up dramatically is a global phenomenon There have been two major recent drivers of housing demand. One, the interest rates that until COVID were near-zero (which is a global phenomenon because capital markets are global). Two, since COVID, work from home causing people to move around and shift where the demand is. Also a global phenomenon. Both of these can drive short-term increases in rents on the order of a few years, but they should also drive new construction, and then once the construction has caught up to the demand the rents would go back down. Unless the construction isn't allowed to happen. > The argument that high rents are mainly due to large regulations and lack of building is largely not supported by the evidence. It very much is. You can take any two cities and account for things like median income and population density and when you're done you'll consistently find that the one with more restrictive zoning has higher rent.
- fodkodrasz 2y ago
  > Suppose this is true. Then you replace that portion of the housing stock with new construction, and what problem is there? The problem is only if you're constrained from doing that. The problem is, as it can be observed in Budapest for example, that the new constructions focus on flats suitable for single people, or the short term renters, or the luxury segment, and the middle segment of the market is pretty much non-existent. Flats suitable for families are not being built, in the sizes and number of rooms where it would be useful you only have condos with rooftop terraces and such thins that unnecessarily inflate the prices.
  - AnthonyMouse 2y ago
    The construction will focus on whatever is in demand. Moreover, expensive luxury units often make more family units available, because then the new occupants of those luxury units vacate the existing family units they'd have otherwise occupied.
    - thfuran 2y ago
      No, it'll focus on whatever's expected to be most profitable, which is not necessarily the same thing.
      - AnthonyMouse 2y ago
        The price they can sell the unit for is determined by demand. Profit is then the difference between that and their costs. But selling units with lower demand would then only be more profitable if those units also had lower construction costs. Which isn't really consistent with the practice of making luxury units.
        deleted 2y ago
        [deleted]
    - BrenBarn 2y ago
      Unless they keep those vacated units to rent them out on AirBnB.
youreth4tguy 2y ago
[dead]
CydeWeys 2y ago
> But if you look at many cities you'll see that population has not grown significantly. You've got cause and effect backwards here. The population hasn't grown because the housing hasn't been built for them. The city population would have grown if more housing were available, but instead what happened is that the limited supply drive rents up and kept some people out. Separately, there's also too few hotels in the city to accommodate tourists, so some housing was converted to that more profitable use. It all can be traced back to not building enough to satisfy increasing demand.
- SR2Z 2y ago
  I don't know if you can say that Airbnb is the result of market forces - dodging STR regulations and taxes seem to be lucrative enough on their own.
bluecalm 2y ago
Short term rentals fulfil important function. There is real demand for it. The problem is that it's expensive or just impossible to build anything and that it's very cheap to own. The solution is known: significant land value tax and looser regulations to actually use the land. This will not happen though because of lobbying of property and land owners who enjoy their rent seeking. They will always manage to find another scape goat. One day it's flippers, next day it's Airbnb. Anything but land owners being forced to pay taxes to fund the area they own land on.
h2zizzle 2y ago
Correct. A phenomenon that IS global is the financialization or property (of which AirBNB is an aspect). Could it be as simple as, "Housing is now an investment, rent goes up because investors want returns, the solution is to limit or prohibit using housing as an investment"?
- epistasis 2y ago
  When was housing not an investment? This isn't new. Land has always been an investment ever since it was enclosed. Reasoning as if financialization is a new phenomenon seems destined to come to the wrong conclusion.
  - h2zizzle 2y ago
    1) Housing is not land. Conflation of the two is incorrect, as any Georgist will tell you. 2) The commodification and securitization of housing as we know it today is absolutely new. This allows for new and exciting ways to distort valuations beyond intrinsic worth, which is the only way land and housing were assessed until recently. We did not have esoteric derivatives of insurance on mortgage tranches 100 years ago. But thank you for the Orwellian insistence that we have always lived in this hell. Speaks to the scruples of those who would deny people dignified places to live because of how they're able to manipulate numbers on a screen.
    - epistasis 2y ago
      Agreed that housing is not land, but when has housing not been traded, either for money or by favors? This is absolutely not new. > This allows for new and exciting ways to distort valuations beyond intrinsic worth, which is the only way land and housing were assessed until recently. Sure derivatives are new, and they caused a bubble in 2008 due to giving lots of people mortgages and hiding the risk of the mortgage default, raising prices. Are suggesting that's what's going on now? Because it sure doesn't look like that at all, it looks like lack of supply to meet people's needs, which is IMHO the fundamental immorality of the system as it stands right now. The help we live in is because capitalists (ie homeowners and landlords) have control of the planning process which allocated how much housing there can be, and they have constrained the amount of housing. Yes, it is Orwellian and cruel. But it's also very important to realize that getting rid of derivatives will do nothing at all to bring down prices, unless there's a pricing bubble. Getting rid of the 30 year mortgage would bring down prices, but at the same time also reduce affordability of homes, so everybody would be in the same situation of a shortage. The scrupleless housing deniers live in the homes next to us in cities, denying new housing because they are conservative and don't like seeing new things, and backforming reasoning like "it's only housing for people I don't like or can demonize." Sometimes these folks care about their asset price appreciation too (numbers on a screen) but a lot of it is simple fear of change.
frontfor 2y ago
I think the idea that Airbnb is to be blamed is not valid, or at least it doesn’t explain much. Keep in mind that property prices have been rising massively in many parts of the world including the oft-forgotten East/Southeast Asia in these discussions. Airbnb are not at all prevalent or even illegal there.
EVa5I7bHFq9mnYK 2y ago
The housing stock (HS) was taken off the regular market not for free. Travelers paid through the nose for this HS and for other services catering to travelers. That money should have been used to replenish the HS.

bobthepanda 2y ago

Looking at raw population numbers is misleading. Average household size has declined due to changing social dynamics (longer times before marriage, fewer kids, etc.) so even if population is static you need more units. Spain went from 3 in 1990 to 2.5, which is a pretty drastic change.

AnthonyMouse 2y ago

> What has happened is Airbnb which has made it viable to take a significant portion of the housing stock off the regular market. Suppose this is true. Then you replace that portion of the housing stock with new construction, and what problem is there? The problem is only if you're constrained from doing that. > The other thing is that rents going up dramatically is a global phenomenon There have been two major recent drivers of housing demand. One, the interest rates that until COVID were near-zero (which is a global phenomenon because capital markets are global). Two, since COVID, work from home causing people to move around and shift where the demand is. Also a global phenomenon. Both of these can drive short-term increases in rents on the order of a few years, but they should also drive new construction, and then once the construction has caught up to the demand the rents would go back down. Unless the construction isn't allowed to happen. > The argument that high rents are mainly due to large regulations and lack of building is largely not supported by the evidence. It very much is. You can take any two cities and account for things like median income and population density and when you're done you'll consistently find that the one with more restrictive zoning has higher rent.

fodkodrasz 2y ago
> Suppose this is true. Then you replace that portion of the housing stock with new construction, and what problem is there? The problem is only if you're constrained from doing that. The problem is, as it can be observed in Budapest for example, that the new constructions focus on flats suitable for single people, or the short term renters, or the luxury segment, and the middle segment of the market is pretty much non-existent. Flats suitable for families are not being built, in the sizes and number of rooms where it would be useful you only have condos with rooftop terraces and such thins that unnecessarily inflate the prices.
- AnthonyMouse 2y ago
  The construction will focus on whatever is in demand. Moreover, expensive luxury units often make more family units available, because then the new occupants of those luxury units vacate the existing family units they'd have otherwise occupied.
  - thfuran 2y ago
    No, it'll focus on whatever's expected to be most profitable, which is not necessarily the same thing.
    - AnthonyMouse 2y ago
      The price they can sell the unit for is determined by demand. Profit is then the difference between that and their costs. But selling units with lower demand would then only be more profitable if those units also had lower construction costs. Which isn't really consistent with the practice of making luxury units.
      - deleted 2y ago
        [deleted]
  - BrenBarn 2y ago
    Unless they keep those vacated units to rent them out on AirBnB.

youreth4tguy 2y ago

[dead]

CydeWeys 2y ago

> But if you look at many cities you'll see that population has not grown significantly. You've got cause and effect backwards here. The population hasn't grown because the housing hasn't been built for them. The city population would have grown if more housing were available, but instead what happened is that the limited supply drive rents up and kept some people out. Separately, there's also too few hotels in the city to accommodate tourists, so some housing was converted to that more profitable use. It all can be traced back to not building enough to satisfy increasing demand.

SR2Z 2y ago
I don't know if you can say that Airbnb is the result of market forces - dodging STR regulations and taxes seem to be lucrative enough on their own.

bluecalm 2y ago

Short term rentals fulfil important function. There is real demand for it. The problem is that it's expensive or just impossible to build anything and that it's very cheap to own. The solution is known: significant land value tax and looser regulations to actually use the land. This will not happen though because of lobbying of property and land owners who enjoy their rent seeking. They will always manage to find another scape goat. One day it's flippers, next day it's Airbnb. Anything but land owners being forced to pay taxes to fund the area they own land on.

h2zizzle 2y ago

Correct. A phenomenon that IS global is the financialization or property (of which AirBNB is an aspect). Could it be as simple as, "Housing is now an investment, rent goes up because investors want returns, the solution is to limit or prohibit using housing as an investment"?

epistasis 2y ago
When was housing not an investment? This isn't new. Land has always been an investment ever since it was enclosed. Reasoning as if financialization is a new phenomenon seems destined to come to the wrong conclusion.
- h2zizzle 2y ago
  1) Housing is not land. Conflation of the two is incorrect, as any Georgist will tell you. 2) The commodification and securitization of housing as we know it today is absolutely new. This allows for new and exciting ways to distort valuations beyond intrinsic worth, which is the only way land and housing were assessed until recently. We did not have esoteric derivatives of insurance on mortgage tranches 100 years ago. But thank you for the Orwellian insistence that we have always lived in this hell. Speaks to the scruples of those who would deny people dignified places to live because of how they're able to manipulate numbers on a screen.
  - epistasis 2y ago
    Agreed that housing is not land, but when has housing not been traded, either for money or by favors? This is absolutely not new. > This allows for new and exciting ways to distort valuations beyond intrinsic worth, which is the only way land and housing were assessed until recently. Sure derivatives are new, and they caused a bubble in 2008 due to giving lots of people mortgages and hiding the risk of the mortgage default, raising prices. Are suggesting that's what's going on now? Because it sure doesn't look like that at all, it looks like lack of supply to meet people's needs, which is IMHO the fundamental immorality of the system as it stands right now. The help we live in is because capitalists (ie homeowners and landlords) have control of the planning process which allocated how much housing there can be, and they have constrained the amount of housing. Yes, it is Orwellian and cruel. But it's also very important to realize that getting rid of derivatives will do nothing at all to bring down prices, unless there's a pricing bubble. Getting rid of the 30 year mortgage would bring down prices, but at the same time also reduce affordability of homes, so everybody would be in the same situation of a shortage. The scrupleless housing deniers live in the homes next to us in cities, denying new housing because they are conservative and don't like seeing new things, and backforming reasoning like "it's only housing for people I don't like or can demonize." Sometimes these folks care about their asset price appreciation too (numbers on a screen) but a lot of it is simple fear of change.

frontfor 2y ago

I think the idea that Airbnb is to be blamed is not valid, or at least it doesn’t explain much. Keep in mind that property prices have been rising massively in many parts of the world including the oft-forgotten East/Southeast Asia in these discussions. Airbnb are not at all prevalent or even illegal there.

EVa5I7bHFq9mnYK 2y ago

The housing stock (HS) was taken off the regular market not for free. Travelers paid through the nose for this HS and for other services catering to travelers. That money should have been used to replenish the HS.