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Comment by psaintla | Hacker News Reader

This was inevitable and it is going to drive real estate sale and rental prices up dramatically in tourist destinations. I have relatives who own rental property in Key West, they used to sign year long leases and manage the property year round. With Airbnb they rent the same property 1 week each month and make more money than they did with the year long lease. Ultimately landlords have little incentive to rent to locals. Airbnb means they never worry about have to go to landlord/tenant court to evict and never have to worry about getting paid monthly.

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Which is in turn extremely damaging to communities where real estate is at a premium and even people who make a lot of money struggle to find housing they can afford. There's a reason full-time AirBnBing is illegal in a lot of these municipalities, and it's the same reason it should stay that way.

So, you have the right to tell someone what they're allowed to charge for access to their own property?

Yes. The US is set up to permit regulation on federal, state, and local levels. It's one of the main roles of government.

And since it is only the U.S.'s regulations that make a particular piece of property "yours" rather than "no one's", arguing about the legitimacy of said regulations is incredibly daft. In the absence of regulations, you don't have any property at all.

The only reason anyone owns anything is because of government regulations?

That's an interesting take on the philosophy behind private property rights.

Unless said property literally floats in a vacuum, there are many public externalities arising from your use of your property.

There should be some limitations in place but how would you enforce them? If your local government checks Airbnb regularly to find people breaking the law then people will just use some other method to do the same thing as Airbnb.

If I was the person in charge of enforcing it, I would probably do something like:

  1 - Make it illegal for Airbnb style services to operate in that area, including making a website available, advertising the service, taking listings in that region, etc
  2 - Threaten to jail or heavily fine senior employees if law broken
  3 - Offer a legal route which involves an audit trail of bookings being supplied to the local gov
  4 - Use audit trail to deal with rule-breaking landlords

Steps 1 and 2 are essentially how the US government deals with foreign gambling websites.

That's a lot to ask from a local government.

For New York state government (or equivalent) though?

If the customer is able to find the listing, enforcement agencies certainly should be able to.

This looks like the exact inverse of the VC market:

VC's place tons of bets, knowing that most will crash and burn but hoping that a few percent will win out and cover all the other loses.

In the professional AirBnB host world, they place tons of bets, the vast majority pay out small amounts (individually) with the hope that they don't get any of the BAD guests that wipe out gains across their network.

Yes, that is how the rental market has always worked. It isn't just AirBnb.

You make your money on how well you screen tenants and on the "purchase" of property. [i.e. Long term lease or purchase ]

That might be true now. Will it be true in the future? As word gets out you can make $$$$$ renting on AirBnB then more and more people will do it until there is competition for renters which will lowering prices.

I don't know that will happen but it's certainly a possibility with the prices now only being possible because supply hasn't yet caught up with demand.

It will remain true in places where there is limited supply due to geography or legal restrictions. Those also happen to be where a lot of major tourist destinations are.

In areas with legal restrictions, it sounds like the solution is to fix the legal restrictions. The law can be changed, after all; geography is a little less malleable.

So the solution to the problem of property owners operating in violation of the law is to change unrelated laws to deter them?

That's like trying to stop your town's speeding problem by writing more parking tickets.

I have no idea what you think I said.

You say that like it's a simple thing, it's not. Here is a concrete example of what I mean. In NYC rent control/stabilization artificially limits the supply and increases the cost of non-stabilized units. If rent control was eliminated rental values across the city would plummet in non-stabilized units. As a result property values in non-stabilized buildings would plummet as well. You could easily trigger a panic as landlords try to sell off property that is declining in value. There are unintended side effects to changing laws, it's never as simple as just fixing a legal restriction.

> If rent control was eliminated

Do you mean rent control and rent stabilization? As far as I can tell, rent-controlled units make up something like 2% of all units.

> rent-controlled units make up something like 2% of all units

True, but that is actually a great deal of lost income for the landlords in those cases. Anecdotally, of the number of people I've heard of living in rent controlled apartments, I've never heard of rent over $500, including 2 and 3 bedroom apartments in primo neighborhoods. Numbers like that are just _absurd_ given what I'm paying for my 1 bedroom in an "up and coming" neighborhood in queens

My question is, then, how would a paltry 2% increase in available units - assuming landlords instantly kick those folks out - cause the rental market to suddenly get that much cheaper?

Eliminating rent control wouldn't do much to lower rents given the relatively small numbers of units. They should definitely end it going forward, though.

Getting rid of rent stabilization, which is roughly half of all rental units in NYC IIRC, would have a huge effect, both positive and negative.

My prediction is that after a few years of adjustment following its end, the average paid rent would be about the same but the average advertised rent would be much lower.

All renters would equally feel the misery of rising rents, so I'd expect the political landscape would be very different with regards to feelings towards building more housing.

Yes, I should have been more clear. I meant both.

I fail to see how ending rent control would hurt property values. If anything, it should increase them; now there is not a multigenerational pseudo property right that can be passed on. You can see this in listings; rent controlled units sell for way below normal prices because of the threat that the tenant can invite a relative to stay and then pass on their sweet deal for another generation, all on the property owners' dime.

Rent stabilization is similar. It would raise the property values in rent stabilized buildings. It would also raise rents in the rent stabilized buildings.

Where it would hurt is market rate apartments. They would likely see rents fall over time given the market is no longer bifurcated.

To ease the transition, a phase out would probably be in order, but given that a phase out can be terminated it would probably have to be one big shove out the door.

There is still good value in places like Miami. You can purchase 1 bedroom "condos" 2-3 blocks from Ocean Drive for <$120k and likely cover your yearly mortgage just with summer month reservations.

I looked into this a bit when I had trouble finding places to stay during Art Basel last year and decided to look up sales data for properties I tried reserving on AirBnb

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