Airbnb raises $1B to weather the coronavirus crisis | Hacker News Reader

Airbnb raises $1B to weather the coronavirus crisis

axios.com

Could someone who is working at Airbnb right now comment (anonymously) on the sentiment within Airbnb right now? It is one of the hardest hit companies in tech from a demand standpoint, so your experience will go a long way to help us understand what is going on. Again, not details of the term, just the general feeling .

And there I thought the silver lining of corona was air bnb would finally be seen as a large part of our current housing crisis.

After hearing this opinion repeated with so much frequency, it would seem obvious to me that affordable housing must have been a non-issue before Airbnb existed 10 years ago. But of course, this isn't the case. As a matter of fact, cities that ban Airbnb don't seem to be doing better than those that have few or no regulations concerning the use of the platform. As far as I can detect, the ones that restrict its use seem to be doing worse than their counterparts, which would seem to imply that there exists no causal link between Airbnb and the lack of affordable housing.

The problem, like we all know but some refuse to admit, is that when supply is less than demand, prices increase. There is an extremely simple, remarkably achievable, but politically unpopular way to solve this. That solution of course, is to stop retarding new supply.

Until we come to terms with this, the problem will continue, and parties that are not responsible for it, (but are easy and politically tenable to hate) will continue to get the blame.

No one is arguing that Airbnb is solely responsibly for rent increases. It's one of many contributing factors, including limited supply as you point out.

Contrary to your intuition on this question, Airbnb almost certainly a contributing factor to rent increases. There are studies on this: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3006832

According to the paper, this is what the researchers found -

"In a baseline OLS regression with no controls, we find that a 1% increase in Airbnb listings is associated with a 0.1% increase in rental rates and a 0.18% increase in house prices. Of course, these estimates should not be interpreted as causal and may instead be picking up spurious correlations"

I wouldn't be quick to call that "almost certain".

Limited supply is the disease, AirBnB is a symptom. AirBnB is popular in major cities exactly because real estate is so expensive.

Airbnb didn't invent the vacation rental. People have rented their place to vacationers since forever. There were and are multiple companies and websites that did that long before Airbnb existed.

Airbnb just made it easier and thus more popular to rent your home or room to travellers.

Airbnb didn't innovate anything in the space as far as I am aware of, except for a great user experience.

The only people to blame in regards to vacation rentals raising housing prices are the governments that set and enforce the rules. As long as regulating authorities allow private residences to be occupied by renters on a short term basis, then investors are going to buy property and rent it that way.

Airbnb's intended usage from the beginning was to rent out the unused value of your home. Which would actually lower housing prices since it allows you to use the housing more efficiently. But now bigger players are buying property for the sole purpose of short term rentals which decreases housing supply.

> As long as regulating authorities allow private residences to be occupied by renters on a short term basis, then investors are going to buy property and rent it that way.

Regulators in many cities didn't allow residences to be occupied by renters on a short term basis but Airbnb facilitated those transactions anyway.

Why would unlocking unused value lower prices? Doesn't make much sense to me

If half the houses on a given street have at least one room available to rent at all times, renting a room on that street should be cheaper due to plentiful supply.

Although everyone wants to scapegoat AirBnB, interest rates have been historically low for almost 12 years. Reduced interest rates result in increased asset values, especially real estate when long term debt becomes cheaper.

I'm not supporting everything AirBnB does, but blaming them for housing/rental prices seems pretty ludicrous to me. We've experienced real estate bubbles since we started urbanizing.

In my eyes AirBnb is being blamed for taking houses off the market that would have generally be rented out to long-term tenants. This lowers the supply of rentals increasing prices. Lower interest rates just make the situation worse.

With interest rates what they are right now, I expect a lot more tech companies will look to raise money via debt to build a cushion.

They lost $276 million last quarter and still had >$2 billion in the bank. Will be interesting to see if after this additional raise, they have enough to survive the epidemic.

I know from personal finance that having a buffer in the bank is good... But this seems to be a rather large buffer.

Can someone please explain what's going on with these numbers?

Maybe they're getting ready to acquire some less well-funded competitors who are in financial trouble at bargain rates.

Reply on news.ycombinator.com