3 ms·

There is an externality, but it's still smaller than the total benefit. I think the ideal way to handle it would be to find some way to insure for it, or hold

There is an externality, but it's still smaller than the total benefit. I think the ideal way to handle it would be to find some way to insure for it, or hold the tenant responsible. It certainly shouldn't be illegal, just at best violate a private contract/agreement with the landlord.

JonFish85 13y ago
Isn't violating a contract by definition illegal?
- Houshalter 13y ago
  I mean in the sense they can agree to any contract they want in theory. As opposed to having a law that no one anywhere can do it legally even if the owner agrees to it.
- sneak 13y ago
  Nope - illegal generally refers to violations of criminal laws. Breaches of contractual obligations are civil matters. You don't go to jail, generally.
pilom 13y ago
>I think the ideal way to handle it would be to find some way to insure for it That is absolutely the best way to handle it and Airbnb should require appropriate documentation that hosts are insured appropriately and aren't violating the terms of their leases. But Airbnb wont do that because then they would have fewer hosts and thus less revenue. The answer that the original article tried (and failed) to say is that Airbnb and others should be responsible for ensuring that their operators are within the law but they don't and claim ignorance.
endersshadow 13y ago
> There is an externality, but it's still smaller than the total benefit Benefit to whom? And how can you say that? Nobody knows yet what the total cost of externalities and benefits are for Airbnb. You're also thinking about one use case. What about a condo owner that decides to use Airbnb for profit, and just rents the room from afar, hires a cleaning service, and treats it like a hotel? The other residents of that condo end up assuming all of the risk, security breaches, and headaches of an endless supply of tenants. There are many other uses cases with different externalities associated with each. As a society, we have to decide what's acceptable and what's not--and that's where laws come into play.
- Houshalter 13y ago
  Good points although I still think it's very debatable. Housing is one of the biggest costs, and this is a great way to improve efficiency and save everyone money and resources. It would be said if it was banned entirely due to hypotheticals. >As a society, we have to decide what's acceptable and what's not--and that's where laws come into play. That sounds great in theory. In reality the government is far from perfectly competent. Additionally you get corruption where the government tries to protect an existing industry from competition at the expense of everyone else. Or jerks that shout "Not In My Backyard!" whenever anyone tries to change anything. People are irrationally resistant to new things and that is, on average, far more of a problem than the new things themselves.
rayiner 13y ago
> There is an externality, but it's still smaller than the total benefit. The problem is that the benefit and the cost of the externality accrue to different people. When that happens, you get a higher level of the activity than is economically efficient.

JonFish85 13y ago

Isn't violating a contract by definition illegal?

Houshalter 13y ago
I mean in the sense they can agree to any contract they want in theory. As opposed to having a law that no one anywhere can do it legally even if the owner agrees to it.
sneak 13y ago
Nope - illegal generally refers to violations of criminal laws. Breaches of contractual obligations are civil matters. You don't go to jail, generally.

pilom 13y ago

>I think the ideal way to handle it would be to find some way to insure for it That is absolutely the best way to handle it and Airbnb should require appropriate documentation that hosts are insured appropriately and aren't violating the terms of their leases. But Airbnb wont do that because then they would have fewer hosts and thus less revenue. The answer that the original article tried (and failed) to say is that Airbnb and others should be responsible for ensuring that their operators are within the law but they don't and claim ignorance.

endersshadow 13y ago

> There is an externality, but it's still smaller than the total benefit Benefit to whom? And how can you say that? Nobody knows yet what the total cost of externalities and benefits are for Airbnb. You're also thinking about one use case. What about a condo owner that decides to use Airbnb for profit, and just rents the room from afar, hires a cleaning service, and treats it like a hotel? The other residents of that condo end up assuming all of the risk, security breaches, and headaches of an endless supply of tenants. There are many other uses cases with different externalities associated with each. As a society, we have to decide what's acceptable and what's not--and that's where laws come into play.

Houshalter 13y ago
Good points although I still think it's very debatable. Housing is one of the biggest costs, and this is a great way to improve efficiency and save everyone money and resources. It would be said if it was banned entirely due to hypotheticals. >As a society, we have to decide what's acceptable and what's not--and that's where laws come into play. That sounds great in theory. In reality the government is far from perfectly competent. Additionally you get corruption where the government tries to protect an existing industry from competition at the expense of everyone else. Or jerks that shout "Not In My Backyard!" whenever anyone tries to change anything. People are irrationally resistant to new things and that is, on average, far more of a problem than the new things themselves.

rayiner 13y ago

> There is an externality, but it's still smaller than the total benefit. The problem is that the benefit and the cost of the externality accrue to different people. When that happens, you get a higher level of the activity than is economically efficient.