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Comment by sokoloff | Hacker News Reader

Consumers are willing to pay way more to rent a room (or a car) for a day than 1/365th of what they are willing/able to pay for a full year.

Airbnb makes that matchmaking easier (on both parties), and in exchange takes a 9-15% cut.

Property owners who used to be forced to choose between offering 1-year lease or trying to piece together some mid-term rentals (and suffer vacancies in-between) now have an additional choice: take ~85% of the much higher daily rate people are willing to pay.

I agree it's perhaps made that specific pattern of consumption more expensive, but IMO, it's done that by making the overall market more efficient.

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It's nice to have efficient markets that effectively price things... however I think that perhaps it's not the worst thing in the world to accept market inefficiencies in trade for the opportunity to not live in a shitty society.

My general sense is that merging the vacation/short term rental market with the long term home rental market puts serious upward pressure on the latter, thereby increasing scarcity of opportunity for middle income people in urban locales.

IMO, anything that puts downward pressure on the derivative of social mobility over time is ultimately putting upward pressure on the shittiness of society as a whole and really makes life pretty unpleasant regardless of socioeconomic class.

I'll take an inefficient housing market any day over that.

Very well put. I think any long term rental resident in a large desirable urban area such L.A., New York, SF, etc. would agree. Its too easy to take the libertarian view when you aren't on the receiving end of that upward pressure that AirBnB puts on real long term residents of a city and their available selection of housing stock.

The root of the problem is a lack of city housing stock caused by suburban sprawl in the last century, and NIMBYism in this one. Blaming a rental service for that is silly.

Sure, cities are fashionable again. There's a generational shift and demand is high. Construction is slow. Growth in some places is opposed, by both people and governments. All of this results in limited supply.

So I guess we agree that supply is limited.

But I ask you this: If supply is critically limited, then how on earth is it silly to complain about a "rental service" that mainstreams alternative uses of housing stock where the net effect is even more reduction of supply.

Alternate means of doing business are interesting, and new structures in society are also interesting. People can and should experiment. But if they're experimenting in areas that are already problematic and are doing so in ways that obviously make the problems worse... I'm going to heap blame on them whether you think it's silly or not.

I would think that a system that more efficiently allocates a scarce resource is good.

That some people were previously benefiting from the existing inefficiency is a bug, not a feature, IMO.

It's only more efficient if you tautologically define efficent allocation to be whatever the market decides. Remember, we're talking about an effect that pushes occupancy down, meaning the same amount of scarce resources are being used to satisfy fewer people's needs.

Its unclear how many of those units would turn into long term rentals. In in SF at least, I'm guessing well under half. Many, some, most? of the units are part timed occupied by the landlord. The commercial properties (run by businesses) account for about 1/3 of the listings. How many of those units would turn into long term rentals?

It can take over a year and cost tens of thousands of dollars to evict a tenant. Throw in rent control and you have a market where it is often more attractive to not rent your vacant unit - particularly if you want to move into the unit or sell it within the decade.

All in all, I would estimate that airbnb siphons up around 1% of the units away from long term rentals.

You should maybe look up meaning of NIMBYism before throwing the term around as your usage is completely incorrect. Also suburban sprawl didn't "cause" a stoppage of inner city development. That's absurd. You sound like a shill for Airbnb and perhaps you are. Lastly nobody is blaming Airbnb but simply stating that it exacerbates an existing problem, which is a fact.

> I'll take an inefficient housing market any day over that.

You seem to advocate for exactly the same approach that got us into this mess. Instead of attempting to regulate supply and demand out of existence and blaming the "free market" after the fact, why can't we just build more houses?

Because demand is much more elastic than building? Also they are building, it's not just going to help much. Because there is still money to be made in making inefficient households into efficient airbnb rentals and shared flats for young tech workers having to move to Seattle if they want kids. When the money stops flowing you'll see change like redevelopment.

I don't know, it think the scenario in the article is pretty common where people offset the time the property is empty with a high price. Especially when there's things like seasonality. If an apartment becomes empty in the spring the owner might have it empty to the summer, rent it out at a higher price to tourist and then instead rent it out in long-term in the autumn when there is more demand.

I don't pretend to know everything about the housing market. Just that in a time where the Internet have created opportunities to more easily work on the things you think matter with like-minded people, the housing market is going the other way in terms of flexibility. Paradoxically time and space are more important than ever. Being able to do conferences and have people hang around afterwards, as a smaller company bring some in to consult in person, even just hanging out and exchanging ideas all takes time. It's all possible now, but not only is it not equally distributed, it's somewhat getting less so.

Yeah but the problem the parent mentions really comes to the fore when you're trying to make a Dec 15th - Jan 15th reservation (1 month) and AirBNB hosts are unwilling to do a reasonable monthly rate because the middle dates are peak times. Eventually most of these hosts will only get a reservation for the peak dates and lose out on the month reservation. (peak dates may cost a total of $800 and the reasonable monthly might be $1600 but host wants $800 + $1600 or something like that - ridiculous) Peak dates are about 10 days from Dec 22nd - Jan 1st or something. They'll use a 3x multiplier on those dates to come up with $2400 as their new monthly rate. Yeah.. right.

If the entire month was peak (like July in a popular city in Europe or something..) that would still be understandable - but you could again apply that logic to a 3 month reservation and a host arguing about how the month in the middle are peak dates.

Of course, not all hosts are like that - yet. But if this is the shape of things to come, long term rentals are going to get harder just like the parent mentions.

You're saying that the balance of supply and demand leads to optimal pricing -- maximizing both producer and consumer surplus?

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