Hacker News Reader

Comment by Pxtl | Hacker News Reader

Seems silly to discuss the falling rental prices in prestigious cities without even a nod to AirBNB.

AirBNB rentals have collapsed, and so a lot of owners have moved their properties into conventional long-term rental. This has created a glut in the rental market, and is driving prices down.

https://www.straight.com/news/some-vancouver-airbnb-units-ar...

View on HN

Airbnb says otherwise [1] in fact their CEO said not many are converting to long-term rental [2]. No one has the aggregate data exactly, and Airbnb exposing their data is probably a competitive risk.

Though if their CEO is right and rent is still dropping, it blows a giant hole in this theory altogether.

[1]: https://sanfrancisco.cbslocal.com/2020/06/08/airbnb-comeback...

[2]: https://podcasts.google.com/?feed=aHR0cHM6Ly9mZWVkcy5tZWdhcG...

P.S: Anecdotally, I've stayed at 3 different airbnbs since shutdown started, just in cities a short drive away to get out of my city. This is what Airbnb claims is driving traffic for them.

A report came out that showed the effect is super weak: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3006832

"1% increase in Airbnb listings is causally associated with a 0.018% increase in rental rates and a 0.026%"

This is about a fifth of the overall increase. We're talking about a $9-10 a month difference in rent in most urban areas. Not great, but clearly Airbnb is a small part of the problem.

You seem to be misinterpreting the study. The $9-10 a month number is for the median zipcode in the US, which is unlikely to be an urban area. And it represents the difference for each 1% increase in Airbnb listings. So a median zipcode with 10% more Airbnb listings would see a ~$100 difference in rent from a similar median zipcode.

Assuming that 'a fifth of the overall increase' is correct, that means that a place like SF can attribute at least a few hundred dollars a month in rent increases to AirBnB, as the median rent has increased by almost ~$2k since AirBNB came into existence.

Anecdotal data point:

This asshole was renting 4 separate units in my small apartment complex (despite me constantly pestering my landlord and city council) and a few weeks ago he came by to get all of his furniture and told me he's closed 60% of his bnb's.

Also, I have to wonder if empty apartments held by investors as ‘safe deposit boxes’ will start to appear on the rental or sale markets if the value drops.

And this will have an effect on new construction: if demand weakens, construction will drop off.

>Also, I have to wonder if empty apartments held by investors as ‘safe deposit boxes’ will start to appear on the rental or sale markets if the value drops.

Cities are also making moves that might increase the chances of this. Los Angeles just took steps yesterday to put a vacancy tax on the November 2020 ballot.

Interesting. I've read, however, that something like that is probably very easily unconstitutional and/or easy to get around. The bigger issue is that the tax code gives landlords incentive to not rent at "market value" and hold out for more money on a long term contract.

Why would it be unconstitutional? If cities can give tax breaks for a primary residence, and have a separate commercial tax rate, then why not taxes for unoccupied units? It's basically a financial investment. Tax the fuck out of it.

It is very easy to get around a vacancy tax: you rent it out so someone can live in it.

They generally identify vacancy tax properties by looking for residential properties that aren't receiving utility bills or which have very low utility bills.

If you rent it out so someone can live in it, then it isn't vacant any more, that's the whole point of the tax.

Yes, that's generally how you get around a vacancy tax without spending more time and money on convoluted solutions to get around the tax, like buying furniture and setting up utilities and paying someone to periodically turn on the lights and run the water and pretend that they live there without actually living there.

(This is actually a thing that people used to do when Vancouver introduced its vacancy tax.)

You're not really 'getting around the tax' when the intention of the tax is to give owners an incentive to rent or sell to an occupant. You're doing what the tax is trying to get you to do.

So vacant rentals might turn into low-scale bitcoin mining facilities.

Unlikely. You either wouldn't make enough to justify the power costs, or the investigators would assume you were running an illegal grow operation and refer your case to the police for investigation...which would result in them discovering the vacant property and imposing the vacancy tax plus any potential penalties for fraud, which might include a criminal case...

I think you're both correct about the increase in supply. There is, of course, also the decrease in demand.

It will be interesting to see if this affects home prices as well. I suppose it depends on how many single / two-family homes are rentals.

Around here it seems like some listings are seeing price cuts, not huge, but some. And this of course should be peak selling time normally.

Whats intriguing is the person doing the "calling out" in the article/on twitter is pointing out that these are supposed to be owner-occupied if listed on AirBnb.

they are supposed to be in Vancouver.

That article is just anecdotal, as such claims always seem to be, whether the claim is that rents are going up because of Airbnb or going down because of Airbnb.

I highly doubt it, I AirBnB all the time and it's rare to run into a place that is an AirBnB farm. Usually they are cheaper places.

It will be short-lived. New York death and new case counts have slowed drastically. By next year things will return to normal.

Then we should see a larger drop in cities where AirBNB is unrestricted vs. those where it’s heavily regulated. Do we?

Reply on news.ycombinator.com