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Comment by rll | Hacker News Reader

If enough people do this it will be the end of Airbnb. This is one of the patterns the state of NY is using against Airbnb while Airbnb is arguing that the service is intended for people occasionally renting out their primary residence. If the state is able to prove a significant number of people used this model Airbnb is done in NY and I fear other states will follow.

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When I was visiting Berlin last winter, I stayed at Airbnb flats and it seemed like a lot of the owners were doing exactly this. In fact, to your point, the city was, IIRC, about to forbid vacation rentals in certain neighborhoods. Berlin is rapidly gentrifying, there's a R.E. bubble going on, poorer people are being pushed out of the city, and this kind of thing intensifies that trend. I've no idea if cities in the US would be willing to step in and intervene if this became common here.

Berlin is rapidly gentrifying, there's a R.E. bubble going on, poorer people are being pushed out of the city

This is true in lots of fun cities, primarily because it's so hard to build new housing stock—which is a Bad Thing, as Matthew Yglesias describes in The Rent is Too Damn High. Britain is suffering from a variant of the "no building" problem too: http://www.buzzfeed.com/dlknowles/britains-dysfunctional-pro... : "Construction started on just 107,000 new homes in England last year. Excluding World War II, that’s the lowest figure since the 1920s."

The solution to "gentrification" and what not is "building new dwellings," which we know how to do very effectively (elevators and steel are century-old technologies). The problem is regulatory / political.

It's not quite that simple. Building up can ruin the character of the neighborhood, which is often a big part of the allure.

I do think we're chronically underbuilding in a lot of places (SF being an extreme example), but the existence of steel and elevators is not a panacea for the "gentrification problem".

> Building up can ruin the character of the neighborhood, which is often a big part of the allure.

Well then, less allure would lead to lower prices, right? What's not to like?

That's all well and good. But all the wealthy people who already live there will probably use their political clout to prevent new construction.

And this is inherently wrong, why? People (of whatever their net worth) vote, speak at meetings, and talk to their representatives to try and pursue outcomes that they prefer. One of those outcomes may be maintaining a particular character for a neighborhood. It's complicated. Greater good for the larger city or whatever and all that. But I don't see anything devious about residents having a say in what their community looks like.

> And this is inherently wrong, why?

Because the world does not exist for the benefit of the rich and privileged; not simply the "rolling in Maserati" rich but those in a position to enact those gentrifying policies--who are overwhelmingly upper-income and capable of exerting more time to get what they want, have more money to apply to their causes, and generally are better-educated and able to execute.

The "selfish vote" amongst the privileged is indeed a problem. A lack of social responsibility and a refusal to understand that those unlike you must too be able to live are moral failings. They are wrong, and situations that increase the effectiveness and value of the selfish vote amongst people with privilege are undesirable.

> Because the world does not exist for the benefit of the rich and privileged

No? Does it exist for the benefit of the poor then? -They sure keep voting for more wealth transfers and taxes on the rich, and they keep getting them too!

Note that I'm just an ordinary middle-class white person. I just wanted to point out that the world does not exist for any group's benefit. We're all just people, all just individuals here.

> Does it exist for the benefit of the poor then?

No. But we have ample historical evidence that huge wealth and privilege disparity does not lead to societal stability. The selfish vote of those rich and privileged seeks to increase this disparity. The selfish vote of the poor does not.

The Rich-Enough don't actually vote to change things, they buy politicians and make deals behind the scenes.

It's not quite that simple. Building up can ruin the character of the neighborhood, which is often a big part of the allure.

I don't think I've ever seen an example of this reflected in prices. Do you know of any, or of any studies of this phenomenon?

I don't know if this is a great example, but: http://www.leavenworth.org/

It's sort of a Bavarian themed down-town and city in Washington state. Its allure and attraction to tourists depends on its theme.

I say I don't know if it's a great example because I have no direct evidence about prices, but I assume the reasonable volume of tourists and business must raise prices compared to other cities.

I put my parents up in an AirBnB apt in Paris when they were visiting me. The renter had an agreement with a handful of friends that they would crash at their friend's apt when their apt was being AirBnB'd out. She said a lot of the students do it to earn extra cash. Same was true in most other cities we AirBnB'd in.

Berlin has been gentrifying ever since they tore down that wall. You can still buy apartments in East Berlin for under $100K.

In Mitte, there are some buildings where most of the apartments are Airbnb rentals or similar. There are few local residents left who are not so happy about living in a 24/7 party hostel.

If you don't end your contract, your rent is going to stay quite low in Berlin. If you're retired or unemployed and living decently with a rent around 100€ per month, it's not so easy to escape from the apartment. With a new contract, the rent might be ten times more expensive. Or the place is renovated and put into Airbnb.

People in general here in Berlin don't want more hotels. Especially for the residential neighbourhoods which makes all the prices go up even faster. Too bad some of the neighbourhoods are also very 'hip' places to stay...

this is definitely happening in NYC. A friend of mine just told me how he was considering getting in on it.

In NYC there's an enormous arbitrage. The cheapest hotel room in the city is $300/night. Meanwhile, you can rent a 1BR apt for $2,500 / month.

So you rent an apt for $2,500 / month and book it out on AirBnB for $200 / night ... and you're looking at a monthly arbitrage of $3,500.

The guy I know heard about it from a friend who's already doing this with 6 apartments ... so he was making something like $18K / month (less the cleaning expenses).

Easily. I know at least two people clearing $100k/year by being 'airbnb slumlords.' Real estate agents are keeping apartments off the market and renting them out as hotels.

Airbnb is clearly forcing a convergence between hotel prices and rents. This doesn't just mean forcing hotel prices down, it also means forcing rents up.

I wish the tech community could stop reflexively defending airbnb and engage with the question of what the costs it is imposing are or might be.

Airbnb is clearly forcing a convergence between hotel prices and rents. This doesn't just mean forcing hotel prices down, it also means forcing rents up.

I responded to this issue here: https://news.ycombinator.com/item?id=6657242 , but the short answer is to build more units.

Building the Second Ave Subway, extending express bus service, and doing similar things would also be helpful.

I agree that the way to deal with increasing rents is to build new buildings. In fact, I think that is probably Bloomberg's greatest accomplishment. He made it much easier to develop new buildings which led to a boom in development.

I would imagine Airbnb could at some point cap the number of nights you could let a place out, right? Certainly not ideal from their standpoint, of course, but manageable?

A consequence of this could be that people who rent places out also use AirBnB's competitors. So this could perhaps help AirBnB politically, but wouldn't fully stop the problem.

It also prevents a legal and valid use-case -- renting out your couch every night of the the year. So long as you still live in the place yourself full-time, this isn't illegal under most municipal codes.

"So long as you still live in the place yourself "

A way to game this might be to:

1) Buy a place

2) Rent out 1 room full time to someone who agrees to #3 in exchange for below market rent.

3) Rent out the other room or rooms.

This was the case at a place I stayed at in Boston - the place was a 3 bedroom apartment, 2 bedrooms were occupied by long term tenants, while the room I was in was exclusively for AirBNB.

I think rooms get far less than a full apt, even if you get the same space. Just having to deal with another person there means you can't totally relax in most places. (Like walk naked from the shower to the room.)

Seems pretty easily solvable - only enforce it for listings for whole apartments.

People might lie, but there is going to be some immediate negative feedback when people find out they've rented out a couch...

I'm not that familiar with the Airbnb situation in NY. Why is this a "bad" pattern that NY state has deemed to be a violation of the law?

Illegal hotels aka slums. There is a reason hotels are fairly highly regulated. My first (and only) stay at an Airbnb rental resulted in me getting bedbugs.

You won't be safe from bedbugs just because you're in a hotel.

I have been for my entire life, but YMMV.

the likelihood of you getting bedbugs in a hotel room is smaller than from a random room in all of NYC. Granted , the rooms up on airbnb for the moment probably don't represent a uniform cut of NYC, but considering the type of people who would start running unlicensed hotels, I'd imagine it being more likely.

It is unrealistic to expect any dwelling, whether it be hotel or hostel, to be free of bed bugs, especially if you're in a region with lots of international travelers. There is no effective insecticide for them, they can be impossible to see, and they don't need to eat for months.

Now, any decent hotel will be doing periodic checks for bedbugs around the box spring and headboard, and any other wooden furniture. But there will always exist a small chance that the last person to be in the room brought a couple and you will get them.

Good news is they don't transmit any disease, and if they bite you, it just itches for a few days and goes away.

In nearly all US jurisdictions, hotels are required to maintain units free of vermin, including bedbugs. Private residences are not. Thus, if a hotel fails to keep the room free of bedbugs, they are generally (1) obligated to refund your room charges and (2) pay to replace any luggage or clothing rendered unusable by the pest infestation.

??? If there's no effective insecticide, how do you think we're killing them? The various -methrin-based compounds are generally pretty effective, though occasionally resistant subpopulations crop up.

A shop vac removes them from a mattress.

Probably because it makes it harder for residents to find an apartment.

What NY is mainly worried about (and has the strongest public support for them worrying about) is AirBnB being used as a way of de facto running unlicensed hotels. People don't like discovering that the room down the hall from where they live has essentially been converted into a hotel room, with customers coming and going regularly, no hotel tax paid, and none of the usual health/safety regulations applied (industrial-strength fabric cleaning, etc.). By comparison, someone renting out a spare room now and then is not as likely to produce social or health problems, and most of the public probably views it as benign, even if also technically a violation of your lease.

I don't like this kind of thing as a customer, either. When I look for a place on AirBnB, I expect it to be someone's actual house/apt, which they treat as their own, because they also live there. If that's not the case, it should be made really clear up front.

I'm not intimately familiar with the legal landscape, but in short I think its because a) the myriad laws governing personal property are much different than those governing commercial property b) significant part of AirBNB's model ignores consumer protection laws.

There are a number of reasons. Most states have laws regarding how temporary rental properties (otherwise known as hotels) are zoned. You can't suddenly turn a building zoned for residential use into a hotel without getting it re-zoned.

Also, NY specifically worries that it will change the local housing market. If investors buy up enough local properties and turn them into mini hotels, locals may be priced out of these neighbourhoods and those neighbourhoods will in turn suffer.

Plus there are the complaints from the locals. Having a neighbour rent out their place to tourists a couple of times a year is not a big deal, but if it happens every single week it gets annoying. You never know who is coming and going and they aren't always all that worried about noise, garbage, etc.

And just to clarify, I think the state is right to be concerned about these issues. But at the same time I would hate to lose the ability for someone to put their primary residence on a site like Airbnb a couple of times a year. This helps visitors and the residents without significantly hurting anything else in the equation. Things only start to turn sour when enough people create dedicated Airbnb properties as investments.

It's a bit sad that you have to explain this to grown up people.

I'm not sure that residential/commercial zoning laws in US states falls under the umbrella of general knowledge.

There's nothing US specific about zoning laws. They most probably preceded the founding of your silly colony.

The first modern zoning was in 1916 in New York for height related reasons. Great Britain didn't start zoning until 1947.

EDIT: I was sort of surprised that was the first zoning, when I just looked it up. I always mentally associated zoning with 1920s progressive social engineering.

HAHA, take that ole Blighty!

But really, the whole idea that AirBNB should be able to ignore established zoning is another example of why I consider the "sharing" economy to be the "taking" economy.

Sharing space peacefully is exactly what zoning is aimed at.

Zoning is still a contested topic, it has been blamed for enabling much of the NIMBYism in America for example. Another one is creating huge traffic and commuting situations that don't need to be there by putting business in one zone, housing in another and forcing people to move between the two every day. It makes such things as shopkeeper residences where the shop is on the first floor and the family who manages it lives on the second or third floors significantly more work.

My bustling city (one of those "top US cities to move to that isn't the Bay Area or NYC") has tons of first-floor commercial, second floor residential developments, including a fair number of "row houses" zoned commercial first floor residential second and third floors where both the commercial space and residential areas are owned by the same owner. There's a huge push to build high density in this city that was formerly pretty much all low-density ten years ago.

These are all new builds in the past 8 years.

Not true. Paris had zoning laws (including building height restrictions and business location restrictions) since before Haussman, in the early 1800s[0].

New York passed the first US laws, as far as I can tell from a quick search (although I do see vague references to San Francisco using zoning laws against the Chinese in the 1880s, and a lot of people, including Wikipedia, quoting a more limited achievement of 'the first comprehensive/city-wide zoning laws' for New York), but Europe definitely predated them. I believe Germany and some other countries also had them, besides France.

[0]: http://books.google.com/books?id=dONVGtJzxrwC&pg=PA20&lpg=PA...

NYC had numerous building codes and restrictions previously, including the 1867 Tenement Law, and the famous 1901 new tenement law.

Buddy just asked a question that solicited an informative answer for all of us to read. Not sad.

The general "sad" for me is that HN has so many strong libertarian types who start from an assumption that government regulation is practically always wrong and done for corrupt purposes. Learning that this is not the case is a lesson one could easily pick up much earlier in life, so it's sad that they made it this far without understanding that.

I put it down to the poor state of our mathematical education. The naive understanding of economic systems libertarians display is actually fairly similar to what you see in introductory dynamical-systems courses. You can, with great care, construct some "well-behaved" systems where you present a set of rules, and the expected thing happens: you push lever X and Y happens. Raise the minimum wage and unemployment rises!

But of course, most systems are not so well-behaved, so that is only a lead-in to the real examples, where you change the setup slightly and suddenly analysis grows more complex. Now what happens when you push lever X depends on what region of the state-space you're in! And sometimes pushing lever X can change the region of the state-space you're in, too! There is feedback and internal dynamics. I see very little libertarian economics that displays even a 101-level understanding of any of that.

If you keep treating your intellectual opponents like this, you're going to get trounced the next time you run into a smart one.

To be very brief, you seem to think that libertarians believe, roughly,

(1) "the world is simple, so we should have simple rules."

Instead, you suggest:

(2) "the world is complicated, so we should have complicated rules."

But this claim is entirely unresponsive to:

(3) "the world is complicated, so we should have simple rules."

which is what most libertarians I know actually think. If you respond to (1) when your opponents are arguing for (3), you will not have productive conversations.

Our attitude towards any law really should be a presumption of doubt, especially laws that interfere with consensual activities. Laws are blunt objects that come with their own enforcement costs and unintended consequences. We should be especially wary about regulations whose benefits are sharply concentrated among a small group (say, hotel owners), and whose drawbacks (say, slightly higher hotel costs for everyone else) are widely dispersed. That's standard public choice theory. That doesn't mean that no regulations are ever justifiable (far from it!), but it does suggest that we not favor regulation for the sake of regulation.

I don't like to psychologize people, but I wonder whether this attitude is a sort of mental heuristic on the left, which often finds itself fighting with folks on the right who seem to believe, roughly, that regulation is intrinsically bad, and should be abolished. This has encouraged the counter-formation of the view that regulation is intrinsically good, and should be preserved. I guess that's a little easier to remember than the subtler view that regulation is intrinsically bad, but should sometimes be preserved when it can still improve outcomes over the status quo.

It's almost as though you have to examine things case by case and decide whether a dangerous tool should be applied, instead of just forming a mental affiliation with it.

These people are investors. Investors usually look solely at the money instead of the effects or consequences.

I think your missing a huge one. Taxes, hotels in major city's often send 10+$ a day to the local government. And before people complain about this that money often pays for things like museums and convention centers which is why many people are going to the city in the first place.

Edit: NY get's 10$ on a one room 140$ hotel room stay as it's $2.00 per day per room* + 5.875% of the rent. http://www.nyc.gov/html/dof/html/business/hotel.shtml

So if NYC just made airbnb charge the 5.875% tax, most of their complaints would go away? And by increasing the hotel supply, hotel prices would go down to better match actual long term renting? Then it would create a more liquid housing market enabled by computerized markets? It would still allow casual renting of people's houses that way.

No, their complaints aren't strictly about the missing tax revenue. There are other regulations that would need to be addressed (health, safety, etc...). Hotels are a heavily regulated industry with good reason. Regulations are a protection mechanism to protect the city/neighborhood and the consumer.

I think that there is a clear difference between renting out a room or occasionally renting your entire place, versus keeping a separate apartment strictly for renting out on AirBnB.

In general, tenant / landlord relationships are heavily regulated - legal objections to AirBnB style rentals (pretty reasonably, in my opinion) claim that anyone who has a unit that is primarily a rental for tenants is a landlord, and should be subjected to all the regulations typically defined in that relationship - a different situation than someone who is going to be away for a few weeks renting out their own personal residence during that temporary time.

NY wants to protect the classic hotel business. Hotels and building owners need to take care of all kind of legal and administrative procedures, including security considerations for their users. Airbnb apartment owners are now competing for free with those business.

Not saying i agree, but that's the main motivation behind of Airbnb regulations, in NY and other places.

Not really - it's the rights of the neighbours, who didn't sign up to live in a hotel with people coming and going at all hours, partying, damage/wear and tear, etc.

An interesting bit of evidence that resident concerns are a common motivation: in upscale buildings, which have the funds to pay for it, the crackdown on AirBnB is in even more full swing, through "free-market policing". Some condo associations actually have employees regularly scouring AirBnB ads in their area and looking at the photos to find rentals that look like units in their building (it's often not hard to spot, if you know a building well). Then the owner is identified and sent a "stop doing that" letter, and/or sued for violating their contract.

Because many of those who are renting out apartments in this manner are doing so without a "hotel license", charging the appropriate hotel taxes or otherwise abiding by laws put in place to preserve the rights of neighbors.

You could probably argue that they are most peeved about not getting the hotel taxes.

>> laws put in place to preserve the rights of neighbors. Sure about that?

If you lived in a high-rise condo and paid go money to do so, and the two places on either side of you started being rented out to random people who were there one week and gone the next, how would you feel?

As others have pointed out, residential zoning laws aren't generally the product of corporate malfeasance. Usually they are there to help combat it. That's what NIMBYism is all about.

> If you lived in a high-rise condo and paid go money to do so, and the two places on either side of you started being rented out to random people who were there one week and gone the next, how would you feel?

I probably wouldn't care because there would be no way to detect if it was happening, without me standing outside my door all night like a sentry.

Sure, I'd be annoyed if some of the guests came and went at all hours of the night and that was waking me up regularly, but that could happen just as easily with more permanent neighbors, and I'd be able to do just as little about that.

If I read your comment correct (why is it bad for NY to be against airbnb scenarios like this) then no, it's not a bad trend. To elaborate, many places (not just the US, and not just New York) has rent-control laws. By and large not everywhere, and not all parts of the cities/counties who has. But for those that do, this is in clear violation of at least that, but also - possibly - sublet laws. That is a far fetched example though.

But the more worrying part is that it drives up prices as more and more do this (not talking 1-2 appartments in a neighbourhood, talking increasing).

Another issue is the housing situation. In many larger cities it's a real issue that there aren't enough places to live as needed.

For hotels it is bad, as it's driving business away.

So, from both sides of the spectrum this is bad. For people looking to get some extra cash (not saying it's bad - as the post also mentions, it's an active investment), and for people looking for a place to rent while on vacation, it is good.

Perhaps in some (or even many) jurisdictions but isn't this just plain ole "Bed & Breakfast" (you know, the BnB in AirBnB) which has been around since forever?

How is this any different than VRBO, or any of the other vacation rental middlemen out there?

I suspect the difference (at least in the case of NY) is lack of regulation and kickbacks (sorry, taxes) for the local government.

If you want to visit my city and see its sights, you can "kick back" into the damn kitty that it takes to keep those sights maintained.

Many cities don't charge a hotel tax.

Some tourists would prefer to support the town they're visiting by directly paying shop owners, etc, instead of having "hotel taxes" of indeterminate destination tacked onto their expenses.

(But you're right, using "kickback" was needlessly offensive.)

I'd prefer the opposite. I wish tourists didn't cover any costs of running my city. Then it would be optimized for those of us that actually live here.

If there's one thing I've learned in my old age, it's that I love buying things for people. Because then the power dynamic is in my favor: this is my city, enjoy your visit but leave no trace.

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