New York City report pins millions in rent hikes on Airbnb | Hacker News Reader

New York City report pins millions in rent hikes on Airbnb

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25 pointscfadvan10 comments

In an efficient market, the rental rate (controlling for unit quality) for long-term residents and short-term guests should differ only by as much as the landlord gains from the predictability of a long-term resident's rent payment stream and the lower upkeep costs. This result just tells us that this difference is smaller than the pre-Airbnb gap between hotel and apartment rates.

Airbnb is removing friction and making the market more efficient. It's not some kind of force for evil.

Except long-term tenants also have tenant protections that short-term guests do not for good reason.

Markets often fail to price in externalities, such as the fact that short-term guests make terrible neighbors to long-term residents, particularly if they are in the same hallway of an apartment building. That's why hotels are regulated in the first place, because the citizens of the polity involved often don't want hotel guests anywhere near them.

I haven't seen cities like NY or SF themselves proclaiming Airbnb is evil, or bad intentioned. It's not about friction of markets here, it's about a city having the capacity to house people. If the city was just concerned about getting a cut of the revenue they could just tact on hotel taxes and be done with it.

Of course it's not a black and white problem, but I am far more sympathetic to cities struggling to house everyone who actually want to live there and could care less about airbnb's inventory problem.

I’m surprised that anyone would think otherwise. AirBnB naturally removes stock from the rental market. The rest is supply/demand 101. The only question is how big of an impact AirBnB has.

NYC has rent controls, which themselves actually limit the quantity supplied. Arguably, AirBnB provides for a more efficient resource allocation since it allows the unit's price to float to the market equilibrium.

It's a different equilibrium though, where tourists are paying daily rates instead of locals paying monthly

So? Are tourist utility-hours somehow different from resident utility-hours?

Residents provide stability to a polity's long term tax base, and are also the source of votes that politicians of said polity need to get re-elected. So, unless you want wild, cyclical swings in your polity's finances, long-term is generally a better bet.

Uh, yes? Clearly?

If I'm on vacation, I'm not looking to save every single dime because I know that it's a one-off expense.

If I'm looking for an apartment, I'll actively research to find the best deal because it's a long term commitment that could have huge ramifications on my finances years in the future.

Case in point:

I'd gladly pay $250 a night in a Manhattan hotel, because fuck it, I'm going on vacation, will only be there a few days, and don't want to spend an hour each day on the train getting to/from Newark just to save a couple hundred bucks.

But I would have to be crazy to pay $250 a night for an equivalent (i.e. studio) apartment in Manhattan, regardless of how much time it cuts off of my commute.

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https://news.ycombinator.com/item?id=16986824

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