Airbnb is politically unpopular in many cities. Opponents of the homesharing service are a mixture of hotel industry lobbyists and local residents who believe they pay higher rents because units that would otherwise be available to them are put on the market for tourists instead.
The well-being of tourists doesn’t really factor much into the political equation because:
- Tourists don’t vote
- The voice you’d normally expect to speak up for tourists – hotels – sees Airbnb as competition for tourist dollars
Undoubtedly it’s true that rents are higher when apartments can be used for more than long-term leases. One approach would be to relax building restrictions, increase supply of rentable units, and bring down price. Another approach is to attack Airbnb. The latter is the dominant approach in some jurisdictions.
New research though shows that it isn’t the poor – least able to bear the burden of increased rents – suffering from Airbnb. According to a paper by Sophie Calder-Wang of Harvard (.pdf) the “increased rent burden falls most heavily on high-income, educated, and white renters, because they prefer housing and location amenities most desirable to tourists.”
What’s more it turns out that the harm to affluent whites in New York benefits “a few enterprising low-income households [which] obtain substantial gains from home-sharing, especially during demand peaks.”
(HT: Marginal Revolution)
@ Gary — I recently read that is SF were built like HK, the average housing cost would only exceed the national average by 20%, not 150%. The corrupt politicians in SF are also the landlords, protecting their outrageous rents. Shame on them.
This article is spot-on about the real issue here— housing supply. Another major factor is transportation. Cities with excellent transport (think Tokyo vs SF) might still have high rents, but they are much less sensitive to changes because faster transit increases supply.
Housing in NYC and SF are expensive partly because people have few choices if they want a reasonable commute time.
No Gary it’s not just hotels that are complaining about home “sharing”, it’s anyone whose neighbour is running an unlicensed unsupervised accommodation-service allowing 24/7 parties with the whole thing run by bunch of freeloaders who pay no taxes and make zero contribution to the community.
Harry,
Very few, like close to zero, airbnb proprietors want to rent to people who will be running 24/7 parties. And they all pay their property taxes, otherwise their property would be taken away from them. You may have had a bad experience due to bad short term renters nearby.
Calder-Wang has hit the nail on the head when it comes to US cities, but the rising costs hitting “high-income, educated, and white renters” also cause a segment at the middle and bottom of that group to move to other areas — call it gentrification if you wish — that does eventually impact those who are lower income, less-well-educated and more likely to be poorer ethnic minorities. But that’s a slower trickle of a hit compared to the impact it has on the “high-income, educated, and white renters” …. a group that tends to be more politically potent than its population alone would suggest and thus far more willing and capable to frustrate socio-economic activities that such powerful interests disfavor.
Harry hv,
Those people complaining about “transient neighbors” partying in the AirBnb-listed home next door are more than likely to be higher income, better educated, and of the politically dominant ethnic background than the population at large … because AirBnb-listings in higher demand areas tend to be areas that are too expensive to be affordable residential places for lower-income people with less social, economic and political capital than the people who more commonly can afford to live in such areas popular for rental by tourists and party-throwers.
Gene,
Politicians tend to protect the interests of those with (or perceived to be with) the money in their own constituency. San Francisco is no more twisted in this regard than the politicians anywhere else in the country have been or are.
Speaking of twisted politicians doing just this, just look at Trump and his favorite NYC mayor-turned-personal-lawyer Rudy G. They get into bed together to protect their own entrenched interests and undermine a more open marketplace that would better serve consumers in the aggregate.
This isn’t unique to the US. So-called “free of corruption” countries in Scandinavia are in some ways even worse in making NIMBY work against the interest of consumers in the aggregate and having politicians make it so, especially when those consumers are more likely to be less well of in terms of income/assets and education and more likely to be ethnic minorities than the population as a whole.
@ Gary — I am a math guy, and this paper makes my head hurt…
@ Gene: I don’t think you’re wrong regarding the housing supply in the SF Bay Area but I also agree with GUWonder on the “both sides” aspect. I think a bigger part of the problem are urban areas acknowledging that there is a housing supply issue and rapid mass transportation issue, but then most take a “not in my backyard” position and nothing gets done (that along with bureaucratic red tape). I live in the South Bay and want denser residential zones but I’m in the minority.
Clearly you have no understanding of the housing situation in NYC. If you did you would certainly know its not just hotels and “affluent whites” that have an issue with this. If you think its “a few enterprising low-income households” that are making a profit off air-bnb then obviously you have no understanding of how much it costs to buy property in NYC. The people making a profit off this are nowhere close to low-income. Maybe you should actually learn about gentrification in NYC. If you knew anything about it you would know that those affluent professionals (sorry they aren’t all white), can’t afford the rents near their work so they push out into other neighborhoods and the low income people that you appear to be soo concerned about end up drive out of their neighborhoods even further. Not to mention the massive population of people in NYC who can’t even get permanent housing due to the lacking of available units. Oh and being that most of the places where tourists want to stay consists of apartment buildings, maybe just maybe the people who live in those buildings don’t want random strangers walking through their building doing god knows what 24/7 (its not like these owners do a full background check on people or anything). Stick with writing about things you have an actual clue about.
@GUWonder. I would have taken your comment more seriously if you had not taken a non sequitur wack at President Trump and Mayor Giuliani. Neither remotely relevant to Air Bnb or high cost of housing in New York City or other cities.
OJS, stop triggering yourself to blow up at the mere mention of Trump and Giuliani being yet another example of the nexus between politicians and business people that operate together to undermine the interest of consumers in the aggregate by rigging the system in favor of themselves as entrenched moneyed and political interests.
It just happens to be that these two self-dealers are of your favorite political persuasion while their equivalents in San Francisco may not be.
@GUWonder. I would argue with: “nexus between politicians and business people”, “undermine the interest of consumers in the aggregate”, “rigging the system”, “entrenched moneyed and political interests”, “self-dealers”, “political persuasion”, “equivalents”; but to be honest, I am impressed that anyone could put so much pretensions sounding gobbdigook in just two sentences.
On an unrelated point, I really do like Professor Stanley Unwin. Intelligent sounding nonsense at its best.
OJS,
The less intelligent but more belligerent types often find even intelligible, intellectually-coherent and substantive writing to be nonsense and gobbledygook to their senses. It’s not my problem to solve fundamental mental and reading blocks by the easily-triggered snowflakes who can’t tolerate any suggestion that their partisan saints are not saints.
Well said, GUWonder.
@Bill I grew up in NY and “obviously you have no understanding of how much it costs to buy property in NYC” is a non-sequitur because most people are renting in NY and putting those on Airbnb not buying
@Andrew. You mean you think that President Trump and Mayor Giuliani are responsible for Air BNB or the housing problems in New York City. Why? Explain yourself.
OJS,
Only you here are trying to dumb down a complex situation into a situation fully attributable to two personalities. It seems like you are doing this as part of your desire to set up your own fabricated straw-man to knock over. Weak game, amigo. Better luck next time with playing a more sophisticated game than that. 😉