The vacancy rate in NYC is a lie – and we can double it overnight

In a way, it's a tragedy of the commons thing. Part of what makes a neighborhood nice is... well, the people. People that have lived there for a long time, contributing to the local economy and community. In a city, where you can't easily expand supply, this has two effects: it drives the demand up and the supply down, yeah? So, now you have people who see dollar signs, and jump on every bit of open housing to rent it out on AirBnB- but doing so means they're not contributing back to the community in the same way it originally became desirable. So, in a way, they're draining the value others created.

I do have another note regarding how that value contributes to a community's overall welfare, but I've got to get back to work. I'll edit it this evening.

It seems self evident to me that someone on vacation for a weekend would be willing to pay more for a days worth of lodging than someone who lives there full time. Of course you're willing to splurge on a vacation. However, with the prevalence of AirBnB, permanent residents are now competing with vacationers and it appears to be contributing to the increase of rents unilaterally.

Of course, you can respond that that is the free market at work; however I'd reply that the free market doesn't always work out, and seeking a local maximum in daily rental prices is not in the long term best interests of the city. There are plenty of examples of cities which stopped being inhabitable when transformed into primarily tourist destinations, and that's not a plight I'd like to see for New York.

Basically, long term airbnb rentals are artificially inexpensive because of the negative externalities at play. I've lived in the same apartment building as airbnb rentals and it sucks; someone crashing for a weekend does not feel the same responsibility towards their neighbors as a full time tenant. The costs of these temporary dwellings are spread among uncompensated neighbors.

In agreement with the article, I agree that it's reasonable for someone to recoup some extra money when they go on vacation, and that's totally in spirit with the brand of AirBnB; the problem to me is when they become corporate ventures where someone is renting out an apartment full time, and not living there. At that point, it's an illegal hotel.

But there's the other oddity that some developments in the NYC area seem to be purchased by people who don't live in the city and have no plans to even visit within a year. I'm wondering how much of an impact that has on builders to even build affordable housing when they can put up condos?

I agree that that would make a stronger article. I actually spent a bunch of time researching that and even asked a few real economists, who would do a better job than I did.

I know those studies must exist - think tanks do them whenever we're talking about a new major building project - I just wasn't able to find any.