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What Airbnb Did To New York City (citylab.com)
An anonymous reader shares a report: There are two kinds of horror stories about Airbnb. When the home-sharing platform first appeared, the initial cautionary tales tended to emphasize extreme guest (and occasionally host) misbehavior. But as the now decade-old service matured and the number of rental properties proliferated dramatically, a second genre emerged, one that focused on what the service was doing to the larger community: Airbnb was raising rents and taking housing off the rental market. It was supercharging gentrification while discriminating against guests and hosts of color. And as commercial operators took over, it was transforming from a way to help homeowners occasionally rent out an extra room into a purveyor of creepy, makeshift hotels.
Several studies have looked into these claims; some focused on just one issue at a time, or measured Airbnb-linked trends across wide swaths of the country. But a recent report by David Wachsmuth, a professor of Urban Planning at McGill University, zeroes in on New York City in an effort to answer the question of exactly what home sharing is doing to the city. [...] Their conclusion: Most of those rumors are true. Wachsmuth found reason to believe that Airbnb has indeed raised rents, removed housing from the rental market, and fueled gentrification -- at least in New York City. "
Several studies have looked into these claims; some focused on just one issue at a time, or measured Airbnb-linked trends across wide swaths of the country. But a recent report by David Wachsmuth, a professor of Urban Planning at McGill University, zeroes in on New York City in an effort to answer the question of exactly what home sharing is doing to the city. [...] Their conclusion: Most of those rumors are true. Wachsmuth found reason to believe that Airbnb has indeed raised rents, removed housing from the rental market, and fueled gentrification -- at least in New York City. "
transforming from a way to help homeowners occasionally rent out an extra room into a purveyor of creepy, makeshift hotels.
How about this: create a law that Limits the number of housing units AND number of days rented out per year which any 1 person or business is allowed to make available for short-term rent without a Hotel permit for each property --- including through any number of business partners or related entities.
So if you're a homeowner and have 1 or 2 properties which you rent out less than 80% of the year total across your properties, then FINE, allow that ---- You're allowed to have up to a total of ONE rental unit for short/temp housing accommodation (Count that includes Any and all sub-rentals across all properties that occur for a time less than 20 days) rented out 80% of the days each year, OR two housing accommodations rented out average 40% of the days per 1 year per unit, OR three housing accommodations rented out no more than average 26.67% of the days per 1 year per unit.
(In other words: the more units that are rented out to different tenants, the fewer days you may be renting them out per year.)
Thus if you have 3 properties in the same city Or have it rented out your properties for a combined total among your properties of more than 290 rental-days, then you're in a "Short-term accommodation business" and must have planning approval and permit your properties as Hotel space --- which if approved by Zoning includes regular inspections, and an additional Tax on each rental.
Reasonable regulation should allow reasonable rental revenue by an ordinary homeowner BUT prevent wealthy real-estate investors or corporations from exploiting Uber to make large-scale transformations of apartments to hotel rooms, etc.
. . . that restricts the supply of new housing, and has strong rent-control in place, and people are SURPRISED that property owners will find a way to to generate revenue, and then optimize that revenue ??
and I do wish we could get folks to understand that. Cities didn't limit hotels to "Preserve the Character of the neighborhood" or some other hippy crap. They did it to stop this kind of rent seeking garbage. People have to live where the jobs and rich folk know that. So they can pay damn near anything because they know they can rent it back to somebody and make a profit. Sure there are limits, but they're frighteningly high.
This crap should just be shut down. Just like this crap was shut down when I was a kid and we called it sub-letting.
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The problem with these types of studies is you will never know if they are correct or not, because there is no way to see what would have happened if Airbnb never came to NYC. Maybe it would have gentrified faster without Airbnb. NYC was gentrifying way before Airbnb came to the city. Of course, speculation is now presented as fact. That will make the funders of this study (the hotel industry) happy though, and that is what this is all about anyway. They can now push to get Airbnb out of NYC.
It's one of those inane things that's just used to complain. If well off white people are moving in to a neighborhood it's gentrification. If they're moving out it's white flight. I'm sure if they stayed in place long enough, some term would be created to castigate them for that as well.
... it was "white flight" when middle-class people abandoned crime-infested, poor, dirty urban areas, and it was deemed bad. Now that people are moving back into these areas and the crime and dirt and poverty are leaving, it's "gentrification" and it's deemed bad.
Let me see if I understand this:
ABnB works because ad-hoc rooms are cheaper than standard hotel rooms.
So people rush into the ABnB market, removing conventional apartments from the pool of long-term housing, driving up rents as the pool of apartments shrinks.
So if hotels are losing customers, why aren't they cutting hotel rates to be more competitive with ABnB? Hell, why aren't they slashing staff completely and converting some properties to ABnB only -- or becoming apartments?
Do we need to reduce regulation on hotels so they can better compete with ABnB?
Or is it some other thing, like hotels had successfully restricted competition and there was a practical shortage of hotels which drove prices too high?
Look, don't blame Airbnb, Uber or whatever company happened to come along in this moment, for all your woes. What you're actually mad at is the absolute failure of our governments, public institutions, and elected officials to adapt their services and approaches (or be allowed to do this by a public that seemingly wants to vote by popularity contest rather than efficacy of government).
Get mad at your fellow city residents who only vote in and approve of city ordinances that let housing stagnate, reward people who've just been here a long time and nothing else, foster complacency and lack of quality in taxi regulation, or believe that voters should have a say in everything and vote out people who happen to implement one rule they don't like.
Get mad at policymakers who are too distracted with getting re-elected and resisting PAC money to actually focus on governing and making reasonable policies, leaving our basic infrastructure to crumble while they go after higher profile symbolic issues.
Be mad at yourself, and this system we thought was the best in the world, but actually needs maintenance and dedication to make it work properly.
Companies are just the messengers.
Airbnb takes commission on both sides and when there is a major problem to deal with they disappear.
If you are lucky enough to book with a decent host you may get what you pay for. Unfortunately when you book with a scammer you are on your own. There is absolutely no help provided from Airbnb. This is based on my personal experience traveling for 30 years so your mileage may vary.
No business is perfect. This is not about perfection. This is bout what happens when things go wrong. You are thousands of miles away and may have limited funds available or in a completely different culture where communication is not easy.
Normally with a regular permitted establishment you can verify various independent reviews. On Airbnb only positive reviews are posted. You only find this out when things go wrong. Airbnb does not post negative reviews even though you paid for the full stay.
Permitted establishments normally are inspected by local authorities which try to ensure a minimum standards. This does not mean that something won't go wrong but there is a bare minimum such as fire regulations. Information posting. Emergency exits. With Airbnb you are no even guaranteed that there will be a place to stay. Again Airbnb takes very little responsibility as to the accessibility or even to the legality of the rental. They haven't even visited the location to ensure that it is fit for the purpose advertised.
So Airbnb takes commission on both sides of the deal and provides none of the advantages afforded from the regulated and established lodging hosts and when things go wrong you are left abandoned and screwed. The horror stories haven't disappeared they are just pushed under the rug. If it's so bad that the local authorities are left to deal with it, you may hear about it. You can't post negative reviews on Airbnb.
Airbnb is not a sharing service since you are not required to live with current occupants and takes advantage of the increased costs of regulations which it does not abide with and wipes it's hands from all and any responsibility when things go terribly wrong. Airbnb pretends to be a listing service but implicates itself in every aspect of the business which milks every possible penny and extracts itself from any form of responsibility. I don't know why anyone needed a report to point this out if an individual acted this way people would say that they were running a scam.
DRM? No thanks, I'll just get it somewhere else...
We've seen this struggle a century or so back.
People will, eventually, unionize to establish livable wages
The thing I've always 'disliked' about 'room-sharing' and 'ride-sharing' (and I guess to some extent E-bay and Youtube) is that people make it a full-time job instead of a 'community' thing.
I don't remember the taxi company complaining about the 'ride-sharing' board at the University. If you were going home for the weekend, why not take along a passenger that was going the same way. In general that's the basic idea of Uber and Lyft. I have a car, you're going my way, hop in.
There was also the 'couch-surfing' phenomenon of a while back. The differences between that and what AirBnB is now are what I see as the problem. It's one thing to allow someone to spend the night in your empty guest room because nobody else is using it. It's a completely different thing to buy a room/ apartment/ house dedicated to having people pay to stay there.
The 'problem' with Uber and AirBnB is that people have transformed the 'occasionality' of it into a permanent full-time job. It's not a sporadic and almost random thing they offer, it's 'the only thing.'
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ABnB works because ad-hoc rooms are cheaper than standard hotel rooms.
The reason it works is for lots of reasons, that is the last of them. I have often paid more for an AirBnB unit than I would have for the nearest hotel.
Often you can find AirBnB units closer to where you want to be than most hotels, or in a more desirable location.
AirBNB units will generally have kitchens and washing machines, both of which may be very hard to find at any price just looking at hotels.
AirBNB units being housing, are often more secure than hotels and I don't have to worry about an entire staff with keycards being able to access my room, or being targeted by thieves because they know tourists stay at hotels.
Do we need to reduce regulation on hotels so they can better compete with ABnB?
That would help but I would still prefer an AirBnB unit if I could get one, over a hotel. Unfortunately because of restrictive regulation, most AirBnB units I've tried getting in large cities (mainly SF and NYC) have always been canceled so I can't take that risk anymore. In smaller markets they have been great though and really been much nicer than hotels.
and there was a practical shortage of hotels which drove prices too high?
One last note on this, it does not have to be a shortage of rooms or hotels - the last year or two the Apple Developer conference (WWDC) was in San Fransisco, the hotels decided to collude on higher prices - by that I mean 2-4x above normal rates for that time of year, because they knew they had a captive market for people who wanted to be around Moscone. I'm not 100% sure but it could be a reason Apple finally moved the conference to San Jose.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The 'problem' with Uber and AirBnB is that people have transformed the 'occasionality' of it into a permanent full-time job.>
But only if you want to - I have stayed at a number of AirBnB places where it was not a full time job, they just rented out a room for a bit more money...
Meanwhile, what is so bad about people who bought places just to rent out? It takes a huge amount of capital to build a hotel, or even run a "real" BnB. But now someone who wants to just dip their toe into running a place to stay can do so through AirBnB, and see if that works for them.
I have a friend who bought a mountain house specifically for use with AirBnB. It's great because they can stay in it when they like, or loan it out to friends - meanwhile the AirBnB rentals are paying for the whole thing, and in the end they have a second house in the mountains. Just what exactly is terrible about that?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I say this every time, but it's worth repeating: all this bad stuff AirBnB does to the rental market, the existence of a rental market at all does to the housing market overall. Owners prefer AirBnB over long term rental which makes long term rental unaffordable. Owners also prefer rental of any kind over sale which makes homeownership unaffordable. Imagine a world where all you can find is ridiculously overpriced temporary housing at AirBnB rates? We live in a world like that already, where all you can find is ridiculously overpriced housing at rental rates.
Ban rent, and watch housing become more affordable.
(NB that interest is merely rent on money, so that's got to go too or else it's just the banks instead of the landlords who end up owning the world. Rent and interest, collectively "usury", the fee for a use, are the central failing of capitalism, the mechanism by which wealth concentrates exponentially, undermining the promise of a free market with parasitism by the capital-owners).
-Forrest Cameranesi, Geek of all Trades
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Yes you can. In fact that's the whole point of a market economy - to make money (increase productivity per capita) by improving the efficiency by which resources (including housing and labor) are assigned and used. We used to live in stone caves with dirt floors. Now most of us live in constructed homes where we feel compelled to buy vacuum cleaners to keep the floors clean. That's gentrification.
Economics is not a zero sum game. You can find localized instances where it's zero sum or negative sum due to manipulation by market winners (e.g. monopolies) or overzealous regulation (e.g. rent control). But on balance, increased trade means increased productivity per capita, and a higher average standard of living. Where do you think the middle class came from? Before, it used to be just peasants and nobles.
Sellers can't increase prices. They can ask for a higher price, but they won't make any sales unless there are customers willing to pay the higher price.
Likewise, buyers can't decrease prices. They can wait for a lower price, but they won't be able to buy the item they want unless sellers begin to panic at lack of sales and lower their asking price.
This is the greatest check and balance in economics. The person wanting higher prices can't raise them. The person wanting lower prices can't lower them. They each have to wait for someone opposed to them to meet their price. So the only way landlords can do what you accuse them of, is if there are tenants willing to go along with them and pay them for it. And if there are customers willing to pay that much for crappy housing, then it indicates you have other structural problems (excess demand, inadequate supply to meet that demand) which need to be dealt with.
i.e. Higher rents are a symptom, not the problem.
and it has zero rent control and almost zero regulations on building new houses. When Builders build they're building luxury houses because they're surprisingly cheap to build and much higher profit.
It's got nothing to do with Rent Control or supply. The cities where this is a problem (San Francisco, Phoenix, Dallas, Seattle etc) are already out of land. They're being forced to build out further and further from where jobs are, resulting in 90+ minute commutes one way if you want affordable housing. The only way supply could be increased is if the city tears down single homes and replaces them with high rise apartments. But you can't really raise a family in those. Not the kind of families that can meet replacement birth rates
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...I was able to stay two weeks in NYC with my family (2 adults, 2 kids) in a clean 1200 sq. foot. two-bedroom apartment in Washington Heights for $120/night. Comparable hotel would have cost me $300/night at least. And my (14 nights * $120/night) went mostly into the hands of an actual family living in NYC (two public school teachers with 2 kids of their own) instead of, say, "Hilton" or "Marriot".
Get a popular service, find a way to go around regulations, taxation and obstables put in place to stop overgrowth and abuses, find a way to skip welfare and minimum wage/conditions for workers to make a living with it, and sell it as a new paradigm.
There is no easy route or shortcut for this people. If you are paying less to stay somewhere, paying less for transportation, paying less for services in general, someone is paying more. And there will be consequences for that.
It's no coincidence that some workers on those sectors are living in conditions reminiscent to the Industrial Revolution era. Crazy hours not enough to even make a living.
And yes, I fully agree that regulations are far from perfect, that they often don't do what they are supposed to, and that they frequently compose of abuse themselves for business owners... but skipping them away or going around them will eventually have predicted consequences.