Four Stars for Peeling Paint and Broken Doors? What’s Behind High Airbnb Ratings
wsj.com
wsj.com
These are folks who are wealthy enough to own excess housing stock, and they are using it not to house people but for vacationers.
Prices low for short term rentals? Good. Hopefully they'll enter the long term housing market (or be sold to home owners).
The humans are just doing what is incentivized and what they see other humans doing.
FWIW interest rates on mortgages for investment properties/vacation properties are typically a good deal higher than primary residences, and this is one to reduce demand for such things.
here's another scapegoat: companies like vacasa that buy up entire apartments and own 20000+ units in a city to put up on Airbnb. They're not beholden to the zoning laws or employment restrictions, compliance, etc that hotels are bound to. Yet operate basically the same way. not to mention cleaning fees scoot by, while resort fees are getting banned
We see this all the time. People don't act like economic automatons; people do plenty of things for other people without any economic benefit to themselves.
I don't know why so many people hold this poisonous viewpoint.
The problem that people consistently seem to ignore is that 100% free-markets don't incorporate the costs of negative externalities. So frequently what arises out of the free-market is a situation of misallocated resources.
In this case, the cost to society of people not being able to live close to where they work, or having to pay more to live notably outweights the benefit of people getting to pay a bit less for a vacation. However, because that cost is paid by others and not the people putting the home up or staying there this misallocation still occurs.
I don't think the standard economics characterization of "externalities" includes the opportunity costs of people not being able to use a resource. Even then, I don't see how your argument that vacationers are creating an externality for long term renters is more convincing than the opposite (ie. long term renters are creating an externality for vactioners). Instead, what you seem to be doing is ignoring price signals (ie. the fact that vacationers are willing to pay more for the same unit than "actual" renters), substituting in your own value judgement, and then concluding that there's an externality because the market behavior isn't aligned with your value judgement.
Healthcare used to affordable for most. Now it’s insanely expensive per month for a family, and still costs a huge amount to actually use. That’s not free market, that’s government trying to help out.
Free market has raised hundreds of millions out of poverty. It’s far from perfect, but it’s better then everything else.
Markets free of regulation are not a silver bullet.
I figure you’re making reference to the US healthcare system, which is an anomaly in a world of public health systems that function cost effectively
True, but you can't build a functioning economy out of that. Many have tried - it just doesn't work.
Because it lets their own selfish behavior get a pass which they feel guilty for. I most commonly see this view point in bosses, go figure.
Do you buy things? Pay for services?
Maybe small nominal things, but I don't know many that spend considerable amount of money on anything other than themselves.
For any human activity we can make an ethical judgment—life, liberty and the pursuit of happiness sort of thing.
Single family housing should not be seen as an investment vehicle apart from the equity one builds in their own home.
There are zoning laws in place for a reason and when you bypass those laws to turn residential areas into businesses, it does not end in a positive experience for either side.
People should do what they want in their own home
Equally there's some place for buy-to-rent investing to exist. There is, and will always be, a segment of the population who cannot, or doesn't want to, buy and this segment rely on rental for housing. If there was no invest-to-rent then that segment would be homeless.
The problem happens when there's an imbalance. When there's too much Airbnb (like Barcelona), locals get squeezed out of their own city. Some supply is good, too much is bad.
The solution to this is regulation. By regulating supply (prioritize in-home, limited permits for others etc) one can balance the three markets such that ultimately everyone wins.
I work remotely in tech, but I want to continue living here year-round, contributing to the community.
Short term rentals are simply too lucrative compared to owning and long term renting. Much of this is the government's fault -- the tax system has a lot of loopholes, like mortgage interest deductions, depreciation, business cost deductions, and untaxed fees that make short term renting even mire lucrative. I hope the government steps in soon to remedy this, but considering their response to the housing crises in the past I am not hopeful.
Housing and rentals are different because unlike most goods, there really isn't a good alternative to not purchasing the good, and because the supply side of the market is necessarily slow, and constrained by geography.
In other words housing in your local area is an entirely different good than housing 100 miles away, and we should recognize that ensuring the opportunity for shelter to all people is a moral necessity higher than ensuring that pleasure travelers can stay in any given place.
We place a mountain of restrictions on real estate in most of the western world. Requiring that housing be used as housing is a pretty reasonable take.
If you think that people should be able to use their property for anything they want, fine, but don't get upset when someone wants to open a 24 hour go kart track nextdoor.
This is the Wall Street Journal we're talking about, it's the paper for plutocrats and wannabe plutocrats.
The gig economy depends on customers doing this extra work, and maybe in the beginning it made some sense. Airbnb wasn’t pitched as a hotel replacement, it was supposed to be a no-frills way to match up homeowners who were gone for a weekend with backpackers who were there for a weekend. Uber wasn’t pitched as a taxi replacement, it was supposed to be a hip new way to car pool.
Well, things have changed. Some apartments are now permanently for rent. Uber drivers typically drive regularly and depend on Uber for income. Airbnb and Uber are billion dollar companies listed on NYSE.
I don’t feel the same way about doing favors like cleaning up an Airbnb now as I would’ve a few years ago, when it felt like the host was doing a favor for me. And I certainly don’t feel like doing a favor for these huge middleman platforms which traditionally would’ve needed to have some internal rating system but now don’t even have to do that.
This actually isn't true. It was advertised as being as such, because directly saying your business model is to cut out taxi regulation is problematic. Uber planned to be a phone-based taxi service, and originally planned to use professional drivers. It likely realized skirting labor laws through contractors was more scalable.
AirBnB was actually pitched as a way for individuals to make extra cash, however. I agree with you now about the "Favors" and view on workers. Now that AirBnb hosting is a full-time status for people/apartments, I feel like people should be professional. If you're a professional investor with houses on AirBnB (aka its not your spare room), then you should be cleaning your own damn units (or charging commensurate rates).
>I certainly don’t feel like doing a favor for these huge middleman platforms which traditionally would’ve needed to have some internal rating system but now don’t even have to do that.
I expect we're a few years away from getting a "credit bureau" type regulation regarding these systems. I've seen people advocate for them as punishing people who treat service workers poorly, but I think it's too easy to enable discrimination or improper behavior.
https://www.vox.com/2017/8/23/16189048/uber-pitch-deck-2008-...
https://www.slideshare.net/PitchDeckCoach/airbnb-first-pitch...
In rural areas: whoopsie the romantic getaway with a claw foot bathtub also has disgusting well water that stinks and stains everything it touches. Btw, you should buy and drink bottled water only here; According to the printed instructions left on the kitchen table that you'll only get to see after arriving. P.s. Complain about this and we'll leave a bad review on you.
I still have a couple hundred dollars of credit on my account from my last shit stay and I'm not even going to use it, I'm so fucking done with AirBnB.
While we stayed there she watched the camera and counted each person who went in the house, and then claimed we threw a party (we didn’t).
She wanted $1000 extra dollars and it had to go to Airbnb arbitration.
And I never even got the photo shoot.
Of course it has. You've just rolled snake-eyes every time.
1. Not everyone leaves ratings so there's a selection bias;
2. Everyone uses a different standard. The number of times I've seen a restaurant 1-star review that basically said "the food was great but we have to wait 15 minutes for a table when turning up unannounced with a party of 12 on a Friday night" is astounding;
3. Psychology makes people disinlined to leave bad reviews. The article mentions this with the woman trapped in a room. To me that's a safety issue and should be an automatic 1-star and a complaint to AirBnB and possibly to authorities. She didn't want to hurt the owner's business? The owner is a parasite;
4. Ratings inflation is a real problem; and
5. The platform is incentivized to having high ratings.
The last one is a big one and not talked about as much. Think about it: if you, as a user of AirBnB (for example) leave low ratings, that's bad for the platform. Other users feel less confident about using the platform.
The side effect of this (intentional or unintentional) is that you want to make it harder for these people to use the platform. If you're Uber, you might not match them to a driver. If you're AirBnB, you might hide certain properties or make it more likely that the owner won't accept their reservation.
I avoid staying in places where the rent market is really tight but realize my being there still causes rents to rise. I also stay in touristy places in the off season, such as Jersey Shore in the winter or Miami in the summer (just have to be aware of the IV indexes).
The hotels and the regulatory industry surrounding them and making it expensive without always being nicer are free to win back more of my business in the US. Their move.
1. Stop renting whole homes. Stop being part of the problem. Airbnb is good for someone letting out their spare room and that’s all I use it for.
2. Avoid any place with less than 30 ratings. Hard to tell with anything fewer.
3. Try your best to stick to superhosts.
4. Avoid places where you share bathrooms. Seems like a good filter.
5. Read through at least ten (if not all) of the non five star reviews. Read fully. Most people tend to leave somewhat positive reviews even if they had a less than positive experience but they WILL mention the problems they had in the last sentence or in a mellow way. Exaggerate and read between the lines to understand the reality.
If you’re not willing to do all of this just book a hotel (though I have a similarly complex process for them as well).
Worse, some of those spare rooms are just not much cheaper than a hotel room anyway. Sometimes the only real advantage they have over a hotel is location.
Why is this a problem?
If “too many vacationers” and short term rentals have priced you out, you can’t afford it. Tough shit, welcome to life.
It’s insane to me that people feel entitled to own a home in whatever part of whatever city they desire, for whatever price they’ve decided is reasonable.
If you want cheaper housing build more houses.
The same logic applies to renting, though. Is it really entitlement to expect to be able to not have to spend 50% of your income on housing?
It’s definitely not a law of nature that housing has to be this expensive, it’s only a political failure that cities are becoming unlivable. You might call that entitlement but also keep in mind that those least able to pay rent are also least likely to be able to move once they’re priced out.
I agree though, it’s a tremendous political failure that we have so under-built housing. Most cities could be affordable to most people with adequate supply.
15000 years ago, some of my ancestors walked from Asia to North America without a dollar to their name.
So yeah, some tourist accommodation is fine, and the Airbnb model in concept is fine. I prefer staying in self-contained, self-catering places when I go away, and most places I go on holiday are small towns without hotels. Tourists bring money into the community, especially rural communities. We seldom see the owners at all (key is under the mat) and there've never been hidden charges. With good suppliers and good customers everyone is a winner.
But there's a balance. Investors buying up properties does reduce housing stock. Too much of that drives out locals. Bad travellers (hosting parties etc) make for bad neighbors. As always the unrestricted free market corrupts and destroys, but hey, free market right?
So yeah, it can't be just "tough, get out, you can't afford to live here." and it can't be "ban all short term rentals". But free market works best when paired with good governance, one that takes the whole big picture into account. (Ironically reducing supply also works to improve returns for those who have a permit to supply.)
The key is in the balance. When the free market and good governance are in balance then you get optimal results. When the pendulum swings either way too far then there are second-order negative outcomes.
Even if the money probably isn't that much, at least in bigger cities.
Or even if they just live on a normal income in a city acutely affected by it. That's what really turned my opinion on the matter, when I tried to move to Galway city in 2016 to find out that a lot of the housing was taken up for tourists. Now I'm in Dublin, and it's even worse, in the midst of the largest housing crisis the country has seen (and it's not due entirely to lack of building - during the pandemic the number of long-term lets doubled, mostly as AirBnB owners fled back into the market). It's absolutely awful what it has done to cities as whole, not even talking about actual neighbourhoods.
But I suspect most people here make a really good income, and can afford to live in other places that are generally insulated from this, and don't have to worry about competing with others in the lower-end rent market.
There's also a lot of weirdly libertarian "I should be able to do what I want with my property", ignoring all negative social externalities that we already regulate against. It's quite funny, from people who (I'd assume) would generally be more left-leaning/liberal.
> There seems to be certain lack of empathy. Or they feel superior in sense that we bring money, we should be served as some type of royalty for that.
God, I see this attitude way too much. Hotel owners also exhibit this in Dublin, as they demolish cultural and historical institutions to make way for more hotels to cater towards tourists. Tourists are not a viable way for a city to thrive long-term.
https://www.theatlantic.com/technology/archive/2019/03/what-...
jeez, didn't realize I should expect to have hidden cameras on me everywhere in an airbnb besides toilet/bed without recourse. and that it's fine for these cameras to be located in a living room with view of bedroom interiors. have to treat everything outside your bedroom or toilet door as being out in public...
So I hidden camera that is technically within frame of normal photos is not installed visibly and certainly not disclosed in the description.
It need not be mandatory, but optional and eventually those not opting in are evaluated more suspiciously.
[1] places that rent out at least 100 days per year or some such cutoff.
Hence, it's very much not in airbnb's interest to "crack down" on people renting out rooms. They know it's a problem as they have all the data. They willingly refuse to act.
Maybe the solution is hotel
I’ll roll the dice with airbnbs given how much hotels cost.
When 6% of complaints are for "unsafe conditions", something is afoot. source: https://www.asherfergusson.com/airbnb/