6 ms·

Airbnb is partly responsible for the massive spike in rental prices around San Francisco. I know a lot of people who rented more apartment than they could real

by nugget 14y ago

Airbnb is partly responsible for the massive spike in rental prices around San Francisco. I know a lot of people who rented more apartment than they could really afford because they know they can earn extra income via airbnb. In the short term, this seems like (and may indeed be) a positive trend - people are able to squeeze into better quality apartments than they otherwise could have. But in the medium term, as we now see in SF, market prices simply rise to account for this "new normal" behavior. Unintended consequences follow. First, someone who is not willing to open their apartment to part-time airbnb'rs is now at a disadvantage. Second, at least part, and perhaps most of, the extra airbnb income is now passed on to the landlords in the form of higher rental prices. Remember it doesn't matter how much money you have, it only matters how much money you have relative to other people who want the same things you do.

SilasX 14y ago
I agree, as long as it's understood that San Francisco's insane anti-development policies (and indeed, rent control) share at least as much of the blame for the difficulty in finding a place.
marcojgm 14y ago
There is no correlation between the rise in rental prices in SF and Airbnb. It's absurd to think that they could impact that at this point. A large chunk of the hosts on the site rent out a room in their own homes. If you want someone to blame for the raising prices, I think it's more rational to point the finger at the spate of IPOs and the newly minted folks who are in the buying market at the moment. Or if that's not your cup of tea, then perhaps blame the size of the city (as it can't get any bigger) or even more appropriately, blame the blood hungry landlords who still insist you pay by check and raise their rates by at least 30% every time one of their properties free up. Either way, just wildly saying that without any substantial evidence is pretty weak.
- nugget 14y ago
  Nice try, Airbnb PR dude.
  - marcojgm 14y ago
    well instead of randomly guessing that incorrectly, why not respond with some kind of argument about how it could be possible that the 3k Airbnb SF listings (according to a general search of SF on the site) could influence rent prices? According to this survey, there's 340k rental properties in SF. http://www.nmhc.org/Content.cfm?ItemNumber=55508#large_cities http://www.nmhc.org/Content.cfm?ItemNumber=55508#large_citie...
    - smartician 14y ago
      But only a fraction of the 340k properties are vacant and available at any given time. In an already tight market, reducing the number of currently available rental properties by 3,000 is a huge reduction of supply.
      - marcojgm 14y ago
        http://blog.sfgate.com/ontheblock/2011/03/30/why-so-many-vacant-homes-in-san-francisco/ http://blog.sfgate.com/ontheblock/2011/03/30/why-so-many-vac... Seems like we have a problem with rent control there. Many landlords won't rent in SF because of rent control. They want tenants who leave regularly to take advantage of the rising prices. Not sure whether it's cause or effect, but I just think there's clearly more influential factors than Airbnb here.
        timr 14y ago
        You're making a lot of claims for someone who isn't bringing any relevant data to the party. From a study commissioned by AirBnB itself, it's pretty clear that it's allowing people to live in places that they can't otherwise afford: "One notable finding is that Airbnb hosts renting out their homes are generating income that is crucial to them staying in the place they live. About 60% of the hosts in the survey had an income less than San Francisco’s median income. About 14% had an annual household income below 14% and another 27% were between $40,000 and $70,000. So for these hosts the extra income is very substantial." and if there's any doubt remaining, let's ask the head of public policy at AirBnB for her opinion: "'Hosts really use Airbnb to make ends meet,' says Molly Turner, head of public policy at Airbnb. 'One of the findings that most surprised us is how important Airbnb is to hosts. It’s really helping them through tough times.'" http://www.forbes.com/sites/tomiogeron/2012/11/09/study-airbnb-had-56-million-impact-on-san-francisco/ http://www.forbes.com/sites/tomiogeron/2012/11/09/study-airb...
- meej 14y ago
  It is affecting housing stock, though. The Tenant's Union says they've discovered thousands of apartments and some whole buildings have been taken off the rental market to be used by tourists.
  - eru 14y ago
    But that's good. That's arbitrage between rental and hospitality markets.
- Wilya 14y ago
  > blame the blood hungry landlords who still insist you pay by check and raise their rates by at least 30% every time one of their properties free up. That would be the most misguided blame possible. Landlords don't raise prices because they are bad (and they don't lower prices because they are nice guys), the immense majority of them just follow the market and set the price to what people are willing to pay.
ajacksified 14y ago
Doesn't sound much different than splitting / subletting an apartment with roommates. I, for example, can afford the place I'm staying at by renting out the finished basement in my house to a friend of mine. Requiring extra income is a symptom of the problem of rent and construction control.
- danhak 14y ago
  It is quite different. AirBNB rentals compete with hotels on price, not long-term leases.
jswinghammer 14y ago
Rents are high due to high demand in an area where there isn't much of an increase in supply that would normally help reduce prices if that were possible.
- YokoZar 14y ago
  AirB&B is increasing the supply of housing in SF. Prices should fall in that circumstance, except that city policy has been dramatically restricting the supply otherwise.
stefap2 14y ago
Not sure if that's true. Typically you can't sublet rented apartment. Maybe with landlords agreement.
temphn 14y ago
AirBnB has, at best, a $56 million impact on the SF economy. Ben Bernanke is printing $85 billion per month to buy mortgage backed securities via QE3/4: http://www.forbes.com/sites/afontevecchia/2012/12/12/qe4-is-here-bernanke-delivers-85b-a-month-until-unemployment-falls-below-6-5/ http://www.forbes.com/sites/afontevecchia/2012/12/12/qe4-is-... QE4 is here. Only a few months after announcing what had been dubbed QE3, an open-ended $40 billion a month program to buy up mortgage backed securities (MBS), the FOMC decided to extend its asset purchases in 2013 as Operation Twist expires. Combined with QE3, the Fed will be taking $85 billion in bonds, both Treasuries and MBS It is likely that Bernanke's $85B/month has a far bigger impact on housing price inflation, and hence rent.

by nugget 14y ago

SilasX 14y ago

I agree, as long as it's understood that San Francisco's insane anti-development policies (and indeed, rent control) share at least as much of the blame for the difficulty in finding a place.

marcojgm 14y ago

There is no correlation between the rise in rental prices in SF and Airbnb. It's absurd to think that they could impact that at this point. A large chunk of the hosts on the site rent out a room in their own homes. If you want someone to blame for the raising prices, I think it's more rational to point the finger at the spate of IPOs and the newly minted folks who are in the buying market at the moment. Or if that's not your cup of tea, then perhaps blame the size of the city (as it can't get any bigger) or even more appropriately, blame the blood hungry landlords who still insist you pay by check and raise their rates by at least 30% every time one of their properties free up. Either way, just wildly saying that without any substantial evidence is pretty weak.

nugget 14y ago
Nice try, Airbnb PR dude.
- marcojgm 14y ago
  well instead of randomly guessing that incorrectly, why not respond with some kind of argument about how it could be possible that the 3k Airbnb SF listings (according to a general search of SF on the site) could influence rent prices? According to this survey, there's 340k rental properties in SF. http://www.nmhc.org/Content.cfm?ItemNumber=55508#large_cities http://www.nmhc.org/Content.cfm?ItemNumber=55508#large_citie...
  - smartician 14y ago
    But only a fraction of the 340k properties are vacant and available at any given time. In an already tight market, reducing the number of currently available rental properties by 3,000 is a huge reduction of supply.
    - marcojgm 14y ago
      http://blog.sfgate.com/ontheblock/2011/03/30/why-so-many-vacant-homes-in-san-francisco/ http://blog.sfgate.com/ontheblock/2011/03/30/why-so-many-vac... Seems like we have a problem with rent control there. Many landlords won't rent in SF because of rent control. They want tenants who leave regularly to take advantage of the rising prices. Not sure whether it's cause or effect, but I just think there's clearly more influential factors than Airbnb here.
      - timr 14y ago
        You're making a lot of claims for someone who isn't bringing any relevant data to the party. From a study commissioned by AirBnB itself, it's pretty clear that it's allowing people to live in places that they can't otherwise afford: "One notable finding is that Airbnb hosts renting out their homes are generating income that is crucial to them staying in the place they live. About 60% of the hosts in the survey had an income less than San Francisco’s median income. About 14% had an annual household income below 14% and another 27% were between $40,000 and $70,000. So for these hosts the extra income is very substantial." and if there's any doubt remaining, let's ask the head of public policy at AirBnB for her opinion: "'Hosts really use Airbnb to make ends meet,' says Molly Turner, head of public policy at Airbnb. 'One of the findings that most surprised us is how important Airbnb is to hosts. It’s really helping them through tough times.'" http://www.forbes.com/sites/tomiogeron/2012/11/09/study-airbnb-had-56-million-impact-on-san-francisco/ http://www.forbes.com/sites/tomiogeron/2012/11/09/study-airb...
meej 14y ago
It is affecting housing stock, though. The Tenant's Union says they've discovered thousands of apartments and some whole buildings have been taken off the rental market to be used by tourists.
- eru 14y ago
  But that's good. That's arbitrage between rental and hospitality markets.
Wilya 14y ago
> blame the blood hungry landlords who still insist you pay by check and raise their rates by at least 30% every time one of their properties free up. That would be the most misguided blame possible. Landlords don't raise prices because they are bad (and they don't lower prices because they are nice guys), the immense majority of them just follow the market and set the price to what people are willing to pay.

ajacksified 14y ago

Doesn't sound much different than splitting / subletting an apartment with roommates. I, for example, can afford the place I'm staying at by renting out the finished basement in my house to a friend of mine. Requiring extra income is a symptom of the problem of rent and construction control.

danhak 14y ago
It is quite different. AirBNB rentals compete with hotels on price, not long-term leases.

jswinghammer 14y ago

Rents are high due to high demand in an area where there isn't much of an increase in supply that would normally help reduce prices if that were possible.

YokoZar 14y ago
AirB&B is increasing the supply of housing in SF. Prices should fall in that circumstance, except that city policy has been dramatically restricting the supply otherwise.

stefap2 14y ago

Not sure if that's true. Typically you can't sublet rented apartment. Maybe with landlords agreement.

temphn 14y ago

AirBnB has, at best, a $56 million impact on the SF economy. Ben Bernanke is printing $85 billion per month to buy mortgage backed securities via QE3/4: http://www.forbes.com/sites/afontevecchia/2012/12/12/qe4-is-here-bernanke-delivers-85b-a-month-until-unemployment-falls-below-6-5/ http://www.forbes.com/sites/afontevecchia/2012/12/12/qe4-is-... QE4 is here. Only a few months after announcing what had been dubbed QE3, an open-ended $40 billion a month program to buy up mortgage backed securities (MBS), the FOMC decided to extend its asset purchases in 2013 as Operation Twist expires. Combined with QE3, the Fed will be taking $85 billion in bonds, both Treasuries and MBS It is likely that Bernanke's $85B/month has a far bigger impact on housing price inflation, and hence rent.