> Highest and Best Use

"Most profitable" != "best for society at large". Ignoring (or denying) that is the core issue with all these MBA programs, McKinsey and the other consultant vampires. They all preach short-term benefits exclusively while ignoring that without a sizable mass of people who actually have the money to buy things, enough time on their hand to have a reason to buy things and children to keep up the economy, eventually the economy will just crash and burn.

I don't see why the person who wants a short term rental has any less right than the longer term tenant. They express their desire via willingness to pay.

The issue is the housing market is becoming so disconnected from a free market that huge supply imbalances are opening up without supply providers having the ability to close the gap (because of laws and regulations)

> I don't see why the person who wants a short term rental has any less right than the longer term tenant.

That's because you only look at the individual people, which is precisely my point.

For society at large, for the GDP, short term tourists are not what society / the economy needs (unless your entire society is based on tourism, which is a dangerous path on its own as many countries like Croatia discovered during Covid). Short term tourists contribute barely anything to the economy outside of eating out, museum entrance fees and where the law allows for it dedicated taxes (which many AirBnBs just skip on). In contrast, actual economic activity needs people and these people need long term stays.

Society isn't about producing the maximum GDP though, it's about producing things people want. Sure, going on a vacation doesn't produce lasting value, but that's not the point. The person on vacation wanted to do it and that's sufficient reason on its own.

Yes, towns obviously need a long term population, but this isn't usually the problem outside of smaller rural tourist towns.

Are short term lets the 'best' use, or the one that allows the owner of a scarce commodity to make as much money as possible to the detriment of the community in which the commodity is located?

This is HN: there is a large class of users who do not see a distinction between "best" and "most extractive."

If short term letting is more profitable that necessarily implies it's the best use. Part of the issue seems to be that owners might accept lower profits from short term rentals to avoid the hassles of long term renting though (like a shitty tenant that becomes a nightmare)

Highest, maybe.

Best? Debatable. For the owner? For society?

Not when the price doesn't capture hundreds of externalities.

If it was totally frictionless for everyone else to collect "impaired sleep" and punitive damages from the party-animals renting a unit, that would be in a fundamentally different economic/legal/technological universe than this one.

Often-illegal hotels which largely circumvent taxes to enrich some landlords and possibly the local tourism industry (at the expense of everyone in the community who requires housing) is almost certainly not the best use of limited housing resources.

parties and homeless people or an equitable housed community hmm

> Alternate title: Lack of Government Interference Allows Properties to be put to Highest and Best Use

From the article:

> Arizona even passed a law in 2016 making it illegal to regulate short-term rentals at the local level

Does state government interfering with local government count as “Lack of Government Interference”?

Only if you consider “Highest and Best Use” to be that which is most profitable for the property owners, rather than that which is in society’s long-term interest.

Of course, capitalist economists work very, very hard to conflate “economic efficiency” with “society’s long-term interest” in peoples’ minds—to make people forget that an economy is just part of a society that should serve that society’s goals. They’d prefer if you thought an economy was a society and that all other things were subordinate to it.