I wouldnt offer air bnb a billion for 10%. I dont think they can pay it back. I hope they can't pay it back. Dublin Ireland saw 67% more housing available overnight because air bnb home owners needed to offer their homes to long term stayers since the travel ban. They're a nuisance.
I think that's great that 67% of supply was quickly re-allocated. Imagine if this was a hotel. How many people would loose jobs and how many buildings would have to be demolished.
A hotel can tie up the resource of 100 places to live in temporarily inside one single building. Airbnb spreads that out to 50-100 separate places to live in. There's a difference, don't you think?
Empty hotels have the same CPVID19 effect as empty AirBNBs.
In fact, empty hotels are serving very important roles right now around the world housing homeless and quarantined people and travelers.
Finally there is no comparison between a hote and a cruise ship. Travelers in hotels, much like Airbnbs, are all back at their homes. The problem with cruise ships is that they cannot easily get back to wherever they’re from.
Worldwide housing supply is never going to keep up with radical changes in usage. One takes literally trillions of dollars worth of construction in not just housing but also transportation etc, the other takes a website.
Well yes, but also no. I would hope that it's not terribly surprising that just about any property in a major metro area is going to earn more revenue on average as a series of short term rentals than a long-term tenant or sale. I mean that's pretty much the standard trade you make for lots of things. You accept lower rates in exchange for lower risk and more consistent revenue.
Airbnb did a weird thing and proved/facilitated so much demand that landlords realized that listing on Airbnb could net you that increased profit with lower risk since they provide a steady stream of renters changing the risk/reward profile.
So we're left with some awkwardness of people being priced out of their apartments not because of anything evil but because Airbnb et al close that information gap and proved that short-term rentals aren't nearly as risky as landlords thought and that forking over 30% for customer acquisition still works out in their favor.
I think you’re leaving out the key aspect of Airbnb’s move, which is to transform a large amount of housing into hotels without appropriate regulation. That’s what enables it to be so profitable.
Right but that's an orthogonal issue to what the market will pay for a given property. I agree that a lot of the draw of Airbnb is that it's cheaper than hotels but this is the case where the current crop of regulations are harmful since people on Airbnb know exactly what they're getting. The regulations aren't addressing any information/knowledge asymmetry or safety concerns that aren't covered in "this is just some randos house" disclaimer. I'm sure that helps Airbnb's funnel but I doubt the absence of hotel regulations would make the current crop of hotels any cheaper since the regulations are tailor made for what they were doing already. Yayy regulatory capture. Right! Back on topic. But none of this matters because we're not comparing hotels to Airbnb, we're comparing Airbnb to renting or selling which is a different batch of zoning regulations they're skirting.
But that reinforces my point since the reason that city planners zone properties/areas for long-term residential only sans a few excepted hotels is keep the prices down to levels that individuals and families can actually afford because you're only competing with other people in your rough income range and not commercial buyers. So I don't see a contradiction in cities just banning Airbnb like any other commercial activity for that reason but it's all like artificial mannn.
Also current situation shows there is a 100 year risk that will likely return the average risk of short term renting to the original (pre AirBnB) value. So in a Long enough time frame AirBnB didn‘t change anything?
I once stayed at an Airbnb condo in Toronto that was relatively new. I saw many, many tourists coming in and out of the building, the lobby looked like a hotel with about 20 different groups with luggage, etc. It looks like this entire condo was mainly for investment purposes and for people to Airbnb these condos out. It's not surprising that Dublin saw a huge increase in rentals and I bet the same thing has happened across the world.
I’ve been hearing people say this for years, and it is certainly an easy and nice line to say. But supply for new housing is not the solution or the issue.
1. When new housing enters the market it is priced at “fair market value”. That fair market value is inflated by numerous known and unknown factors. Such as foreign investors, short-term rentals, etc...
2. Cost of construction follows the trend and what used to cost X to build is now 2x, 3x.
3. Numerous cities have reduced pricing of permits and have even simplified the planning approval process for homes in an effort to attract imvestors and developers.
4. Cost of land is at an all time high. Which again is a factor of the fair market value. Land owners are wanting to sell to large development projects that have investors. Developers are bidding against each other to secure land.
Those and more are compounded into a complex relationship that has created a market that very few people can afford to live in. Is it possible that the fear of being priced out is driving a lot of these motivations?
According to Berlin 5€ per m² is a fair market value for a 50+ year old apartment. It's obvious that new construction can never reach a price that is this absurdly low.
I've never understood this focus on rental pricing. The problem has never been the price, how can prices constantly go up if nobody can afford them? Well, the answer is that someone can actually afford the price and for some reason you are competing with that person that is far more richer than you. Remember one of the core causes of inflation? Too much money chasing too few goods? It's not just printing an excessive amount of money that is necessary to cause inflation. You also need a shortage of goods. You need to have more people than housing to cause inflation of rental prices. If there are 10 houses but 15 people then you can be assured that landlords will only care about renters with high incomes and construction companies will focus on building for these high income people first and only after there is enough housing will they build housing for the less wealthy residents.
This is only true if Airbnb creates demand for owner-absent short term house lets. Otherwise it's just a platform taking market share from other platforms like VRBO or Craigslist and the amount of housing supply would be the same with or without Airbnb.
And of course it is the latter. The great majority of listings on the platform are for owner occupied dwellings where a room, loft, basement, or guest house is being let out. This does not keep supply of housing suppressed.
Hmmmm, what else changed in that period... I can't think of anything. Other than airbnb's drying up, my life is about the same as it was a few months ago. There are so many things that have changed in that period, it's nearly impossible to make a strong argument that any one change caused any one other change. In stats speak, the exclusion restriction you'd usually require for this kind of statement is not valid here.
Many of the shelter-in-place orders have banned anything not essential, like groceries or other supplies. That includes moving.
How did the supply dry up so fast when no one is to leave their houses? It has to be AirBnB/travel bans; even the 2008 housing bubble 'asplosion didn't move that fast.
One of the fun things about governments is their ability to ban things they don’t want and punish those who flout the ban with fines or imprisonment.
Such things are not perfect, naturally, but any popular website listing property does literally let the government know which house to confiscate, if fines don’t get paid.
