You are describing something functionally on the same scale as to the "extreme blowback" rich people get when people make fun of them on Twitter for, say, burning untold amounts of dead dinosaur goop to make an NFT or to not quite go to space as a personal stunt. It is somehow, however, though not the "economically just circumstances" of the hand-to-mouth mom. Which is a situation to which I will confess some confusion, but whatever.
I'm sorry - I don't think we should build a million skyscrapers in Kethum, Idaho and Jackson Hole, Wyoming so that tourists can enjoy it more cheaply.
I do think we should build more housing in major cities.
Why ban just AirBnB and not Waze for bringing unwanted traffic in previously quiet neighborhoods?
[0] And I would expect those units to not be evenly distributed around a city; there will probably be higher concentrations in the more touristy spots where this community stuff matters less, and lower concentrations in the more "sleepy" residential areas.
It's better than sleeping in your car.
Without the Airbnb, where would we have gone? A hotel? But a hotel with a useable kitchen and good wifi would have been too expensive for any of us renting one of those rooms.
1. Poor people are living in crappy conditions in boarding houses.
2. We solve this problem by banning boarding houses.
3. Now poor people are living in the streets.
4. ...and we're OK with this! Best I can tell, it's because now there is now no landlord profiting on the poor!!
There are plenty of similar examples.
A tourist is fundamentally there for temporary and consumptive reasons. They don't have any long term interests about the place they visit. They are accommodated as guests. As such, it is only rational that they don't receive the exact same consideration as the residents who have their skin-in-the-game of that same place.
And let's not assume that anyone who wants to list a property on Airbnb is mainly motivated by greed. Attempting to paint the people on the other side of your argument as evil is a pretty transparently bad argumentation strategy.
Its priced to hit your maximum threshold on monthly wages expendable to rent with minimal savings.
There actually is enough land if you look outward from major cities, but billionaire investors already own that, too.
(Which is to say that there is absolutely an argument for increased supply, but rather that the interests of the REIT-helming class are not congruent with the interests of the people who live there, and thus can either come congruent or be ignored.)
Oh yea, require all real estate purchases to be American, or have legitimate relitaves residing here. We are selling our land with an to anyone in the world with money. I don't know of any country that makes it so easy for the wealthy to buy land.
I would love to know which countries allow real estate purchases like we do?
(I am against regulations, and more laws, but only for the little guys. Regulate big corporations like Blackrock, Facebook, Google. Regulate the big boys, so the little guys can begin to get ahead. Yes-I conflated two different industries.)
Both the UK and Canada for sure. I think Canada is considering a foreign buyers tax but I don’t think it has been implemented yet. In the UK, property taxes don’t even exist - only council taxes paid for by the occupant which makes leasing much easier.
Because housing is not being built, existing houses are sure to increase in price, and so become a good investment for rich people.
You can't just do this with goods that are still being made.
https://prospect.org/infrastructure/housing/blackrock-buying...
I've seen this black rock conspiracy posted elsewhere, and while it makes for a compelling dystopian narrative that large corporations are secretly buying all our homes to lease back to us, the reality is just not true.
People are leaving expensive urban housing in droves and competing for what seem like relatively cheap houses to them, so they are comfortable bidding wildly (I know many, many real people in this situation). I'm sure Black Rock wants in on the action, but until that rate falls dramatically lower, I'm not particularly convinced that that's what's happening.
Less friction in increasing supply is also not an unalloyed good. You can look at the commercial office market, which is much less restricted and has huge boom/bust cycles. And that's before we get to the externalities of rapid housing growth.
I'm actually for increased supply, but I'd rather we stuck with better arguments for it than helping Airbnb get off the hook for the reasonably forseeable consequences of their actions.
Sure, but supply keeps increasing less than demand is increasing, accumulating the housing shortage each year. This is a decades old trend, from long before AirBnb.
I think that supply increase is vastly dominated by regular old population increase in cities that refuse to build housing. I'd need a lot of convincing to believe AirBnb is more than a minor factor.
This is a problem only for investors. Dealing with that is their job. Protecting them from it is not a good reason to restrict housing supply.
This only works because you can count on the Fed constantly lowering interest rates and pumping up your investment on 5:1 leverage.
If you start with 50 000$ then loan against 30 000$ of that, but your equity increases by 70 000$ as you make payments, and then sell the house at the same price, you're still up 40 000$, even though your cash flow was -30 000$.
In the simplest terms, take a $100k house. 20% down = $20k downpayment + $3k closing costs. Generally, this is a house that would rent for at least $800/m.
Your payment is $337/m. Of that, only $143 is principal. If the house is even 5% cash-flow negative - that means you're only getting ~$100/m in principal.
You'd get ~$145 on your $23k downpayment in the S&P 500. And instead of being cash-flow negative and taking money OUT of your investments, you could instead ADD to it.
Add to that the fact that you'll pay an additional ~6%+ transaction costs at closing -> And even a 5% cash-flow negative house with 0% appreciation is likely to come out negative.
This only works because the Fed pretty much guarantees that house prices will appreciate >3% per year for the last 20 years.
3%*5:1 leverage => Crushes the S&P 500 average. Even if you're 10% cash-flow negative, it usually beats the S&P.
Add to that the fact that $250k of the capital gains are tax free -> And that pretty much eliminates the 10% transaction fee and makes it better tax-wise than the S&P 500.
Generally a cashflow negative house will have a much higher payment over a shorter term with much more principal, and much more in rent.
You also forgot inflation of the house price. You have to take into account 2% increase in house prices even without the fed doing anything, and leverage that. When you do that you find out that almost all of your interest payments disappear and much more goes towards you principal, thus increasing your equity gain.
You can't hand wave expenses and pretend you're cash-flow positive. You can do that with profitablity, though.
I did not forget inflation. I literally said a "a cash-flow negative house that does not appreciate and become even more cash-flow negative"!
You are taking appreciation for granted (which is fine, the Fed literally guarantees it now).
If you have a house with a 20 year mortgage at 3% interest where maintenance is 50% of the mortgage payment, with no appreciation in real terms and 2% inflation, 50% of what rent is becomes profit. (1/((1.03-1.02)^20))*0.66 = 54.5%
If you put down as down-payment 100 000$ for a property worth 1800$ in rent, which is realistic, you get 11 000$ in profit per year from a 100 000$ investment, which is great.
That's assuming no appreciation in real terms, ie, the cost of the house exactly matches inflation.
Therefore, renting is profitable even without appreciation of real estate in real terms.*
[0] San Francisco<->Milan Oct. 7-21: $522 on Lufthansa
$22/night, 4.93/5 Rating: https://www.airbnb.com/rooms/19010312 : $432
14 nights in Milan + Air fare for <$1,000.
Eat in the AirBnb for, what, $25/day? and you've spent under $1,500.
It decreases the cost of housing for tourists by decreasing the supply of housing, and thus increasing its cost, for locals.
> This is, in my view, a positive.
There's many ways where increased travel can be considered a negative such the increase in greenhouse gas emissions. I'd also consider if that positive truly outweighs the negatives on the locals of an area. Hotels work just fine, and are accounted for in city planning.
> Often, in the weekend, It will be available the entire apartment in exclusive mode for the guest!
oh boy, a chance at "exclusive mode" is exactly what I want from my off-peak Milan vacation :^)
Owning homes isn't free, you know. It is a physically depreciating asset, that you have to take care of, whether you use it actively or not. Doing so costs money, so depth of your wallet puts a firm limit on the amount of properties you are capable to take care of.
Just make sure you know what are you doing. For rental properties, these things will be paid by the tenant in the rent, and for those wanting to get their own property, it will push it even further out of reach.
There is not a human right to get assigned a dream house. You have to purchase, build or otherwise procure it. People make different choices with their money, some people save/get mortgage and then get a house, other people will spend their money in other ways.
Also, for American citizens, they almost always have US annual income taxes, which are taxed on worldwide income. The taxation situation becomes tremendously more complicated if you own a home (or homes) abroad.
So, interestingly, Americans may hoard homes stateside but rarely so abroad.
Developers were aggressively vocal in lobbying against this. Every excuse in the book. Not sure if it ever got through, but the developers shut up about it so maybe they won.
If you take an AirBNB house off the AirBNB market and put it up for sale, it’s like you just built a house for that community. Even better, the market for houses dips lower because of the increased supply.
I really wish rental housing was banned. There is no real gain in productivity from allowing rental housing other than some scummy landlord who lives three states away getting a bit richer off of the dime of the actual residents in the city.
I moved for a job to Ann Arbor from San Francisco back in 2001 with my spouse and our two kids. The idea that I should have immediately bought a house simply in order to start a job is risible. There are lots of good reasons not to own your house, even if you're going to stay in an area long-term (I ended up staying there for 4 years; we bought the house we lived in for our last year there, and took a bath on it, because buying a house you only keep for a year or two is usually a terrible idea).
I live in Chicagoland now. I own my house, but several of my neighbors rent theirs. Why wouldn't they? Residential real estate exposure is not a universally appropriate investment strategy. People live for decades in houses they rent; their landlords have property managers who handle upkeep, and the renters invest their money elsewhere. Maybe at some point they have to move houses; there are plenty of other rentals nearby.
Crime is lower in places where more people own their homes, communities are tighter, streets are cleaner. All these externalities of crime, community, and hygiene are apparently not a problem when you're a factor.
EDIT: Whoops, alex_smart below has pointed out that I am suffering from the context-loss-disorder that is common on HN. It is true, renting is a positive-sum thing and good for many.
I'd reply, alex_smart, but the downvotes have limited my ability to do so.
This is the argument this thread had started with. Do you really believe there is no real gain in productivity from allowing people the freedom to freely move between cities in search for better jobs?
The issue here is short-term rentals, not the deeply weird idea that the only properties that should be available for rentals are multi-family dwellings.
Aren't you completely ignoring the customers of AirBNB in this picture? Namely, the people who only visit the city for short periods of time?
Also, it is not very clear from your phrasing, do you mean that nobody should be allowed to rent at all? Like even with leases of 1 year or longer?
I mean houses shouldn’t be available to rent. Apartments are another matter entirely because they use space much more efficiently in a city.
Congrats, you win the award for the wierdest opinion I have read this month on the internet. Here is your chance to blow my mind with your arguments.
Or if I'm taking a job placement overseas for a year, why shouldn't I be able to rent it out while I'm away and provide an opportunity to a renter in my place?
Transactional costs where I live (stamp duty, agent selling fee, mortgage costs) historically meant that you rent less than five years or buy if staying longer than that. Might've changed since I read that info, but there's a point where the best action changes.
There are people who don't want to buy and don't want an apartment. There are places where there are virtually no apartments.
Housing affordability is absolutely an issue, but I don't think your suggestion is at all reasonable.
Why should they be considered over the people who actually live in the city and want to build neighborhoods and communities there? Besides, they are taken into account for city planning -- hotels are zoned the way they are and considered in development talks.