'Airbnb Inc. disputed the study’s findings, calling them “wrong on the facts” and containing “substantive issues with the methodology.”'
Did Airbnb publish what these wrong facts and substantive issues are?
Did Airbnb publish what these wrong facts and substantive issues are?
They are in a position where what they need hosts to believe is directly at odds with what they want policymakers (including people voting directly on policy or for politicians) to believe.
The end goal is not always maximum profit extraction. NYC is served best by balancing the needs of both long term and short term renters, while ensuring investors reasonable compensation/rates of return on capital invested for services provided.
TL;DR: Extracting rents from things you own by providing economic value to a customer is not "rent-seeking."
It means you get to enjoy lower rent, but at the expense of the unit's full economic potential being utilized.
In economic terms, if a unit can fetch a higher rent being rented short term, then it provides more economic value as a short term rental, and laws preventing that reduce economic utility.
In a democracy it makes sense that a city would prioritize the needs of the citizens who live and vote there over short-termers and people looking to make a quick buck.
You can argue the pros and cons or rent-seeking or of Airbnb, but "rent-seeking" clearly covers Airbnb.
"In economics and in public-choice theory, rent-seeking involves seeking to increase one's share of existing wealth without creating new wealth."
An example of rent-seeking would be lobbying against the construction of new housing to inflate the value of one's own home. A non-example of rent-seeking would be renting your house out to someone else. More from Wikipedia/economics 101:
"Rent-seeking is distinguished in theory from profit-seeking, in which entities seek to extract value by engaging in mutually beneficial transactions . . ." such as a transaction between a property owner and someone seeking to rent that property for temporary use.
"In economics and in public-choice theory, rent-seeking involves seeking to increase one's share of existing wealth without creating new wealth." - Wikipedia
I would say that applies to making a profit off of property one owns by charging people to use it.
Just a quote from an article that sort of illustrates the attitude I have towards it:
> One disturbing implication of Thomas Piketty’s new book, Capital, is that the American economy is slipping into a form of “rentier” capitalism, in which passive income from wealth, increasingly in the form of inherited fortunes, is supplanting dynamism, hard work and innovation. - https://qz.com/196575/to-get-rich-forget-entrepreneurship-an...
Apparently I'm not the only person with this attitude, although this poster was down-voted: https://news.ycombinator.com/item?id=13151809
There's also some links there. I do use passive investing, but I do consider it a kind of rent and I think society might be better off with less of it.
The reality of the situation is that hotels make terrible neighbors, particularly terrible hallway neighbors. Most people do not want to live next to temporary accommodations, and if they were going to they would rather have a separate building designated for the purpose. It is completely valid for a city to be in favor of its citizens, and not for a few short-term visitors and someone looking to make a quick buck on their apartment.
I ponder I ponder
I bet it depends on the city
Certainly, for short-term rentals.
Not for residential, long-term habitation. AirBnB drives long-term and short-term rental prices closer together, which is good for travellers and bad for non-travellers.
AirBnB arguably increases supply of people in beds through more efficient utilization.
That's not supply (which is a measure of what is on offer to be sold), it's market clearing quantity. And, yes, AirBnB increases the supply and market clearing quantity (and decreases average price) of short-term occupancy by transferring units already purchased or rented in the long-term market to be rented the short-term market (which drives up demand and market clearing price in the long-term market.)
If you put a fancy restaurant that sells gourmet popcorn, you raise the price of popcorn in general, and you can also increase the amount of people that eat popcorn.
You could sell any realistic amount of gourmet popcorn without affecting the supply of corn nor the price of other popcorn products, while selling housing affects the supply of land and the desirability of that housing stock.
It will increase mobility of occupants, but it probably won't increase occupants (which is equivalent to decreasing homelessness) much, though the decrease in short-term rental pricing could reduce transitional homelessness (but the increase in long-term residential prices could also increase the more durable kind of homelessness)
I will not increase permanent local occupants, it will increase number of occupants in general. Thats because airbnb's are out of towners using under-utilized housing stock.
Airbnb's increase homelessness, but its not about market efficiency, its about use of land. Any office building will also increase homelessness.
Airbnb should have posted estimates of how much this over-counting could distort the data, because it sounds like a lot. $616M is one of those numbers that sounds high but in context probably isn't, so it wouldn't surprise me if those two distortions wiped out the number, or at least cut it to below headline worthy.
Whether it's $100MM or $616M - it's a sign that there are external costs that that city and society must shoulder because of the higher prices people can charge with shorter-term rentals, primarily to non-locals who may or may not be staying or moving to the city.
They do not address the possibility that the atypical minority (which presumably is apartments used exclusively for AirBNB and not otherwise occupied by a tenant) might cause the $626M rent increase illustrated by the study. This paragraph seems to be a diversionary tactic, "No, look only at these facts".
IIRC, NYC passed a law against this and Airbnb has bee cracking down on those types of listings. I think SF has a similar law as well.
I also wonder if NYC now charges any occupancy taxes in Airbnb like SF does. If so, the revenue collected should also be weighed against any increases in rent. I also wish the article had actual calculated how much of a per month rent increase the $600m figure resulted in. In a city as big as NYC, I don't know if 600m is a big deal or not.