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You are correct that AirBnB increases the value (and thus the price) of housing units. However this does not refute his argument. Since AirBnB allows the rent

You are correct that AirBnB increases the value (and thus the price) of housing units. However this does not refute his argument. Since AirBnB allows the rental of full units, individual rooms, and even shared rooms, it makes housing more affordable. Now, someone can afford a 2BR and plan on renting out one of the rooms a few nights a month to help afford the rent. If there were massive competition, the price of renting a room on AirBnB for one night would approach 1 30th of the monthly rent price. Right now people typically rent a flat for one year. Why is that? Why not rent an AirBnB for 3 months and then try living in a different neighborhood? All these options are enabled by AirBnB and all of this extracts more value from existing infrastructure.

johnnybazooka 12y ago
Right, it makes existing infrastructure more affordable. But for new infrastructure, any income generated is priced into the value, making the "profit" from renting it out less substantial.
- grandalf 12y ago
  That may be true, but why would anyone invest in new infrastructure if it didn't seem like a better option than buying existing infrastructure? Both alternatives include the additional value that AirBnB creates and I'd expect both to result in increased investment in housing across the board, both new construction and improvement.
- seanflyon 12y ago
  You are ignoring the concept of competition. Housing is not the most competitive market due to restrictions both natural (limited space) and artificial (zoning), but there is still competition.
  - johnnybazooka 12y ago
    See that's my point... there is only so much land in the middle of NYC that is zoned right for condos, so the competition really won't increase. Also, real estate in general is a very capital intensive industry, which takes out 99% of competition anyways. How many people are there that can raise $200 million to build a project. Not many.
    - seanflyon 12y ago
      > How many people are there that can raise $200 million to build a project. Not many. First, you don't need many for competition; you just need a few. Second, there are lots of people who can raise a mere $200 million.
      - johnnybazooka 12y ago
        "mere $200 million" lol ok
        seanflyon 12y ago
        Welcome to the world of finance.

johnnybazooka 12y ago

Right, it makes existing infrastructure more affordable. But for new infrastructure, any income generated is priced into the value, making the "profit" from renting it out less substantial.

grandalf 12y ago
That may be true, but why would anyone invest in new infrastructure if it didn't seem like a better option than buying existing infrastructure? Both alternatives include the additional value that AirBnB creates and I'd expect both to result in increased investment in housing across the board, both new construction and improvement.
seanflyon 12y ago
You are ignoring the concept of competition. Housing is not the most competitive market due to restrictions both natural (limited space) and artificial (zoning), but there is still competition.
- johnnybazooka 12y ago
  See that's my point... there is only so much land in the middle of NYC that is zoned right for condos, so the competition really won't increase. Also, real estate in general is a very capital intensive industry, which takes out 99% of competition anyways. How many people are there that can raise $200 million to build a project. Not many.
  - seanflyon 12y ago
    > How many people are there that can raise $200 million to build a project. Not many. First, you don't need many for competition; you just need a few. Second, there are lots of people who can raise a mere $200 million.
    - johnnybazooka 12y ago
      "mere $200 million" lol ok
      - seanflyon 12y ago
        Welcome to the world of finance.