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Comment by mym1990 | Hacker News Reader

mym1990

Short term rental opportunities are just a reflection of investors seeing high enough yields from a particular activity. Since when is the default economic behavior for humans a benevolent and unselfish one? You don’t see people just hanging out the extra cash in their bank account, so why should they do the same thing with an extra property? If you’re looking for someone to aim at, it should be various levels of government and the corporate entities which make this behavior possible, and with relatively little friction.

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.

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> If you're looking for someone to aim at

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

> Since when is the default economic behavior for humans a benevolent and unselfish one? You don’t see people just hanging out the extra cash in their bank account

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.

> I don't know why so many people hold this poisonous viewpoint.

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.

> people do plenty of things for other people without any economic benefit to themselves

True, but you can't build a functioning economy out of that. Many have tried - it just doesn't work.

Is the economy still functioning when externalities are socialized until one literally cannot breath the air or drink the water?

There's no reason why a free market can't be set up to internalize the externalities. The easiest way to do it is to tax things like pollution.

Hmm, taxes sound like a government action, not a market correction.

A free market requires a government for several purposes.

This is subjective…the market maker will say yes and the person that can’t buy air…well they will be dead.

The poisonous viewpoint has lifted literally billions out of poverty. The problem with being benevolent is that benevolence requires resources, and misallocated resources attract free riders.

> misallocated resources attract free riders.

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.

Compared to what? Governments that spend billions on useless things and make things far more expensive than they need to be?

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.

Compared to a well regulated market with healthy competition. These things aren't mutually exclusive.

Markets free of regulation are not a silver bullet.

> That’s not free market, that’s government trying to help out.

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

I would be hard pressed to name an example of any truly 100% free markets. That would essentially be a place that has no taxes, no regulation, no control on production, etc…

>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.

I will say one example I had of this: I had a friend who moved in with me in a condo I owned and I gave him a healthy discount on rent. At the end of his stay he was getting kind of weird and essentially one day just disappeared and skipped out on 2 months of rent. Now my mindset is that in business transactions that include friends either 1) don’t charge anything 2) don’t expect the agreement to hold up 3) avoid these kinds of things altogether

>…this poisonous viewpoint

Do you buy things? Pay for services?

> people do plenty of things for other people without any economic benefit to themselves.

Maybe small nominal things, but I don't know many that spend considerable amount of money on anything other than themselves.

Of course on an individual level there are people who act unselfishly, on a group level you are not often going to see a herd that shows economic activity that goes against the grain in business transactions. Humans have gotten pretty damn good at extracting short term value from things.

> “Since when is the default economic behavior for humans a benevolent…”

For any human activity we can make an ethical judgment—life, liberty and the pursuit of happiness sort of thing.

Why should government make it harder to go on vacation?

It’s very easy to go on vacation: rent from a motel or hotel, which is infrastructure that is in place specifically for vacationing. Go camping. Go rent a van or RV.

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.

I have multiple friends that rent out rooms and ADUs to support their mortgages on Airbnb in their own home so they can afford to live near work.

People should do what they want in their own home

Again, if you read my comment, you would understand that I think it is totally fine that humans are acting towards what is incentivized. But for those that see this behavior as detrimental, it is no use to point fingers at the owners of those properties, but instead to aim at the overarching structures.

In concept Airbnb is fine. Renting out spare rooms, renting unused time on your holiday pad at Cape cod, all make complete sense. It's making more space available, at a cheaper rate, while maximizing utilisation, and return, on an existing asset.

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.

Agreed, I would say once the threshold was crossed where people specifically sought out to buy 2-10 properties in different cities to make a business out of it, it was time to scale back. Renting a room in a place one lives or while one is on vacation seems reasonable enough.

I think short-term rental rules really need to be determined on a community by community basis. In some places (like beach towns, or ski resorts) it might be ok to have 50% (just pulling that number out of nowhere) houses be short-term rentals. In NYC or San Francisco it might make more sense to limit short-term rentals more (a certain number of nights per unit per year), the policing of such a policy though, oi!

Tricky. I live in a region that contains a lot of ski communities. AirBnB has trashed the rental market. I'm working on a deep-dive blog post on this, but basically local blue collar workers are being squeezed out entirely by short term rentals.

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.

It shouldn't. But it should enact rules that govern certain types of goods, like local housing.

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.

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