Airbnb can’t go on unregulated – it does too much damage to cities

That statement is, to me, awful and terrifying.

I live in Berlin, where AirBNB is not popular at all. There's no problem with people renting out spare rooms, or their own flat whilst on holiday, but that's not what happens a lot of the time. Instead, apartments are taken permanently off the rental market, despite the fact it would be perfectly possible to find tenants for them at normal market levels of rent, in order that they can be rented out on AirBNB at a much higher price. They are not "spare capacity doing no work", they are flats deliberately being made unavailable to the local population that actually live in the city for the benefit of tourists and the landlords profit margin. Is that what you want? A city centre made up of tourists staying in "optimally priced" AirBNB flats, whilst the actual residents are forced to live elsewhere?

Unsurprisingly, despite AirBNB launching a massive advertising campaign in Berlin, aimed not at potential users, but at local residents, promoting the fairness of so-called "home-sharing"(nonsense, it's a holiday apartment rental business), public opinion is against them and in favour of the permit system now introduced in Berlin, which is free to rent a room, but requires a fee to rent a whole flat.

So while the supply is mostly the same, the demand has measurably increased, the price will clearly be impacted. To argue otherwise is akin to denying the fundamentals of economics.

I understand the view where you say, let people use their property the way they want. However, at the same time, if we acknowledge that rents are increasing due to a new market for short term rentals, then we must also acknowledge that this increase in pricing pushes a certain percentage of locals out of real estate that they would otherwise be able to afford.

In a city like Des Moines, Iowa, the effect of the short term rental market is going to be minimal. Plenty of space, very little tourism, rents already quite low. But when you go somewhere like NYC, SF, Paris, Barcelona, etc. then the impact of short term tourism rentals has a major impact. Millions of people visit these cities every year, and suddenly they are in direct competition with locals for real estate.

Now why is it a problem if locals are priced out? That's much more a matter of opinion. But the clear reasons are that locals create deeper bonds with the area and people around them. Locals have more reason to respect the area. Locals are interested in building a community around them. Tourists are basically just ticking off a bucket list of typical activities and are on their way.

Barcelona apparently feels that the price of the permits reflects the value of having one short term rental out of the few they want to allow.

Otherwise they’d print more of them to relieve the demand (and signal they want more of them).

You’re claiming this is an attempt to support an oligarchy, but it seems like a very conscious effort to make converting a space into a short term rental a very deliberate choice, and to optimize for the spaces that will pull in the most tax dollars (high end ones) over the ones that can become a burden (low end, rent-my-closet type places)

And they’re constrained for a reason:

https://www.citylab.com/life/2018/06/barcelona-finds-a-way-t...

> Vacation apartments have spread across central neighborhoods, many of them from hosts who list more than one apartment. Meanwhile, the number of affordable long-term rentals available to locals has shrunk.

And especially this:

> Parts of the old city have become tourist ghettos, where residents that remain are kept awake by badly behaved visitors, and increasingly find their local shops and bars taken over by souvenir emporia and coffee chains.

I whole heartedly respect a community’s right to not become a tourist dumping ground.

Staying in a short term rental or hotel is a luxury if you’re talking about some of the most attractive places on earth.

There's nothing wrong with the price of a rental reflecting that.

Anyhow, when we moved in 5 years ago, 3 were occupied by families. One was occupied by a childless couple. Others were occupied by non-families, aka roommates who were splitting the rent.

Many of the roommate based households come and go more frequently, as a roommate moves out due to new job/school.

Families on the other hand don't move as often due to schooling for kids.

Now when the other 2 families and the couple with no children moved out, all were taken over by roommates based household. This was expected as the rent in the area for 3 bed apartment went from around low $2000 (what we paid when we moved) 5+ years ago to mid $3000 now. You can't expect a family with 2 wage earners plus 2 or 3 kids to pay rent of $3000 or above. But with roommates, $1000 per roommate a month seems reasonable, especially if you will be moving out in 2 - 3 years. With Airbnb, it actually makes financial sense for 2 roommate (or even a single guy) to rent a 3 bed apartment and rent extra rooms via Airbnb.

When the new 'roommate' based house holds moved in, I started noticing people with wheeled luggage show up. Guess what? Two roommate household rents a 3 bed apartment, and then they rent out the 3rd bed on Airbnb or something like it. Single guys would have no issue renting out a room via Airbnb. A family with kids renting out a room in a 3bed apartment via Airbnb? Forget about it.

And by renting out the 3rd bed for just $100/night for 10 days, they already break even. If they rent out the 3rd bedroom at $100 a night for 30 days, it's $3000/month. You are actually making money, not losing money. And since this is in California with less than 30 min drive to the beach, the demand is there. It's a great 'business move'.

And the property owner doesn't care as he can rent out a place for $3000+ a month, instead of $2500 a month.

And the end result is, less rental available for families who can afford it.

Interestingly enough, this past year, an elementary school in the neighborhood closed down a kindergarten class because there are less young families with little kids moving it. Not sure it's a chance event, but I'm sure there isn't an endless supply of young couple who can pay $3000/month rent or take on a mortgage of a million or two.

Airbnb definitely does damage to the diversity of big cities, as in makeup of family versus roommate based households.

But that's exactly what's happening in Barcelona. 48% of all AirBnB places are managed by 374 people (4500 places, 374 people have more than 5 places to manage). These aren't the little people getting pocket money to lend homes the week-end they are out of town.

> I wouldn't be surprised at all if these articles are sponsored by the hotel lobby.

Rumour says that hotels are behind the concentration of airbnb places into fewer hands.

In Barcelona, they basically created licences to operate an airbnb place. Now they are too many so they stopped issueing licences. Now these are worth more because it's rare.

How much of this is regulation thats around to protect the society that the hotel is operating in? Changing those sheets everyday isn't just for having clean smelling sheets, but to prevent pests such as bed bugs in some localities. For instance there's probably tons of people whod jump on doctors/dentists who lower the price by not cleaning all their tools properly, but we have regulations requiring it because it can create an epidemic that causes negative externalities to the wider community.

I think I'd have less of a problem with Airbnb if there was any sort of enforcement of health laws or putting effort into not supporting people who sign leases saying they won't do Airbnb but do it anyway.

Having a lower price just shows that is the most efficient use of scarce resources in that specific situation, it does not show that it's good for society.

This is regulatory arbitrage for sure by AirBNB and hosts. The answer (theoretically) would be to more granularly undersrand the costs and benefits to all parties and redistribute appropriately. Unfortunately, neither the public or private sector is incentivized to solve this fairly - “competition” won’t solve it. Seems like a case where regulation would be the answer - it’s just unlikely any single city will solve it well, much less all of them.

It's similar to what happened with low interest rates before the housing boom and bust. You'd expect low interest rates would make housing cheaper for buyers, but it also had the effect of causing house prices to rise because now there were more people who could afford to bid on the same housing stock.

I don't think this is NIMBYism at all. People have a reasonable expectation that the residential area they live in will be treated as a residential area and not a business.

Consider a non-profit charter school which licenses teaching material from a for-profit company and pays a for-profit company for the building lease - and where the owner of the non-profit is also the owner of the other two companies. Examples at https://www.forbes.com/sites/petergreene/2018/08/13/how-to-p... .

Non-profits can also take a part of the cut, as we find out with charity organizations where, say, 85% of the donations goes to running the organization. Examples at https://www.thestreet.com/story/12878005/1/you-wont-believe-... .

Meanwhile, the actual residents have to put up with constantly changing "neighbors", noise and more often than not common fixtures getting trashed and mistreated.

On a larger scale, it drives up prices, because landlords would rather extract the much higher rates from short-term renters than the more reasonable rates a long-term renters would pay. This drives up rent, and forces people out of the housing market. You end up with Airbnb ghettos, in effect turning previously nice neighborhoods into de facto hotel businesses. Thus robbing residential areas of their cohesion and community.

Here, a few law changes were put in place to mitigate the problem, while still slowing people to short-term rent out their dwellings while on vacation. The provider (Airbnb) has to report taxable income, and there is a limit of 70 days/year.