Airbnb is squeezing Toronto’s housing market
news.vice.com
news.vice.com
The framing of the article's headline is bad.
Vice's view of politics is always like a naive high school kid who hasn't ever had a real job or read a single book on economics. Which probably accurately describes their (largely freelance) 'journalists' or more accurately bloggers.
Makes for good clickbait for their demographic though. In an ideal world they should really have stuck to fashion and culture (which their 'talent' is good at) and left the serious topics to people who have a strong grasp of the subjects. But that's boring and doesn't generate outrage on social media aka clicks -> ad views.
> Makes for good clickbait for their demographic though. In an ideal world they should really have stuck to fashion and culture (which their 'talent' is good at) and left the serious topics to people who have a strong grasp of the subjects. But that's boring and doesn't generate outrage on social media aka clicks -> ad views.
The author of this piece worked at Bloomberg and CBC prior to her position as the Economics & Money editor at Vice.
"But that's boring and doesn't generate outrage".
Even if she’s somehow an exception to the rule at Vice as the editor, aka top tier in her category, she’d be a rarity. But looking at her previous output (only a few as she’s a recent hire) there are quite a few that fit into the clickbait vs signal ratio pandering to an ideological niche.
That’s fine if that’s your thing but I put higher standards on the HN front page.
In Zurich I can get from any place to any other place easily because the tram/bus/train connections are always waiting for each other, and are almost never too early / late.
People can use cars if they need it, but it shouldn't be the first choice generally.
I'm not knocking their transit. I'm sure it's great. But you can have good transit, zoning, and affordable housing. See Berlin.
And, yes, Berlin has it's problems, and I'm sure somewhere else is doing things even better. I'm just curious why Zurich is a model we should look to.
Many of my colleagues were living outside Zurich in smaller towns / villages (me too), and we could get to work in 20 minutes, which was for me great actually, I loved sitting on the train and enjoying the beautiful view.
If you drove that during rush hour, you wouldn't be travelling at max speed the whole time, and likely would also take two hours to travel, potentially more (Google predicts up to 2 hours and 40 minutes).
Step 2: compare to alternatives, factoring in geography, culture, scale of operations, political environment
It's a hugely complex issue. I wouldn't define Toronto's public transit as bad, but it's not world class.
The train takes 2 hours to travel 100km. Cars can do that distance in one hour, despite having to cope with traffic. That's pretty appalling. Good public transit should be faster than a car along its main corridor.
Apart from geography, those other factors are reasons, not excuses. Lots of people here look down on public transit and associate it with poor people. That's a problem to be rectified.
And if it only were so easy!
Toronto, and Canada, is very much like the US in terms of its reliance on the car to get around. Except in urban centers, and NYC, the first choice of transportation is almost always the car. This is not just a mindset. The lack of a proper transportation infrastructure and the sprawling nature of North American cities make it difficult to get around without a car.
In fact, I would say urban sprawl and traffic are worse in Toronto than in most American cities (I'm originally from Toronto and I've lived in the US for more than two decades). And what about the surrounding regions, like York and Peel regions? I would say the prospects for an adequate public transportation infrastructure in the surrounding regions of Toronto are even worse, and the population in the surrounding suburbs rivals the population of Toronto proper.
Do you think it is at all interesting that housing pricing on the west coast of Canada and the US recently flattened out at the exact same time the economy slowed in China?
Every single city in Canada and the US currently has this problem. Including Houston which has very permission zoning.
Why doesn't anyone suggest that there are too many people and that we need to control population growth to rates below zero?
You can theoretically restrict the movement of people by decreasing immigration, or restricting local people to move into places with too many people. You can theoretically restrict having more children. Both of those restrictions have been hugely unpopular in places that have tried them. You cannot hold onto power in a democracy or democratic republic if you are sufficiently unpopular.
These are hard problems to solve, I readily admit.
In your opinion what is the end game of not zone restrictions?
Freedom of movement only allows you to get to a destination: it doesn't guarantee that you'll have sufficient resources at your disposal to do something once you at your destination (e.g. acquire a house, or find a job).
People migrating to more dense areas is the problem.
Unless you have an idea for reversing the trend of urbanization, telling people where they can and can't live is going to be a tough sell.
The zoning system was completely broken long before AirBnB showed up. Yes, Airbnb does exacerbate the already existing issues with zoning laws...but that's not an argument for eliminating Airbnb, it's an argument for eliminating or changing zoning laws.
I will not deny that the presence of airbnb rentals in a city can drive up the incremental cost of housing, but it is a proximate cause, not the root cause. The root cause is artificially constrained supply.
1: https://www.blogto.com/city/2018/08/toronto-has-highest-numb...
1.Prevent monopolies and 2. Fight fraud.
1. According to insideairbnb.com there are 8,946 full time high-availability airbnbs in Toronto. However if we look regular apartments available for rent on zillow , padmapper.com etc, there are only 8,429 or less units available. This means airbnb has a monopoly on available living space. We don't need new regulation, monopolies are illegal. It's no surprise during the busy summer events a 1 bedroom airbnb can shoot up to 800$/night.
Annectodal evidence confirms this. I've been living here for 13 years. 2/3 of the new condos are usually empty, I'm not exaggerating. Wether you look at them year round from the outside, ask people if anyone actually lives on their floors, talk to the concierge in different buildings, they're more than half empty. This is a combination of airbnb and also the foreign investor market for condos that are "never livded-in". Also this is not uber, uber is great because it has competition from lyft. AirBnb does not, landlords are basically their contractors, i don't pay them, i pay airbnb, they set the price and promos. They control more than half the market. They further enhance scarcity because airbnb's are profitable even if they're unused for 2/3 of the time, so if we look at housing as units of a 'good-nights-sleep' , we can clearly see how this is anti-competitive behaviour.
2.Fight fraud: There are no employment checks for foreigners getting a mortgage in Toronto, as long as they provide a 34% downpayment and have in the bank about a year of mortgage payments. I can't legally compete with that. I don't have some third world factory, gambling business, foreign politicians in the family laundering money through me. I'm just a hard-working citizen, my student landlord has literally never had a job in their life, this is borderline feudalism at this point.
Unlike Uber and Lyft, AirBnB doesn't set prices, condo owners do. If condo owners are colluding then that's a different issue.
Landlords often find themselves in a costly and exasperating battle dealing with a shitty tenant.
Once a shitty tenant moves in, it can be several months of legal battles to remove them... and the landlord is out-of-pocket thousands of dollars.
Airbnb does away with most of this risk.
Update: www.airbnbhell.com demonstrates, it has it's own risks!
https://www.theguardian.com/cities/2018/nov/29/empty-dublin-...
There's also far more overhead in terms of managing it.
I would argue that local municipalities should _actually_ enforce noise, parking, and other peace keeping ordinences _instead_ of (heavily) regulatting short term rentals directly. If the current laws are insufficient at keeeping tourists/renters in check, they should enact additional laws based on actual input from their constituents to address real complaints instead of regulating AirBnB and short term rentals.
A shitty neighbor is a shitty neighbor independent of if they are a home owner or a renter. If local ordinences were actually levied against the owners of properties with misbehaving guests, they would have an economic incentive to regulate their tenants more carefully.
Which don't exactly have laissez-faire approaches to folks renting out their properties, but the larger issue is that Japanese cities are just generally better about building enough housing to meet demand compared with most American and Canadian cities.
For example the whole of Japan had 28 million visitors in 2017[0].
I couldn't find more recent stats but Austin TX had 20 million visitors in 2011-2012.[1][2]
Tokyo metro has a population of 13million Austin tops out at 2 million.
Austin also has some of the highest airbnb usage, 400k+ guests in a year.[3]
I'm bring up Austin because I live there and definitely experience Airbnb affecting the prices.
Sure we all want more housing but the fact is that investors love to buy homes in cash to rent out for events driving the existing stock prices higher.
[0] https://www.cnbc.com/2018/03/23/japan-welcomed-20-percent-mo... [1]http://www.austinrelocationguide.com/2012/Tourism-in-Austin/ [2]https://www.bizjournals.com/austin/news/2011/09/28/survey-re... [3]https://www.bizjournals.com/austin/news/2018/01/30/airbnbs-m...
These numbers are apples and oranges. For Japan, the number is for foreign tourists, while for Austin it is for all tourists. Tokyo and other Japanese cities also have domestic tourists, which aren't being counted in your 28 million number.
https://www.airdna.co/vacation-rental-data/app/ca/ontario/to...
In fact the average detached house in the jewel of the GTA is changing hands for 12% less than in the Spring of last year and a crispy 25.6% under what it commanded the previous year.
The main gap is between the risk adjusted value of a lease vs. the potential income on short term rentals. Theoretically, over the long term, the net value of a lease should be greater than what you can net from the short term market, but something has broken that.
Also, given that rental income is taxed as regular income at the top marginal rate that the owner pays, does that not mean an owner must charge at least %40 more than their mortgage payment to break even? Given most of those condos have mortgages from people with middle class jobs, pricing that in creates a dead loss that would cause rent increases by itself.