re: Maybe we can solve that housing inventory issue by killing AirBNB

AirBnB is such an interesting delimma.

It’s great for consumers, giving them a ton of options they never had before to find convenient, affordable, and often luxurious lodging, especially in places with limited options. It’s especially great for families or large groups who can rent a whole private house rather than a bunch of separate hotel rooms.

It’s great for homeowners who buy vacation properties which they only use for part of the year. It allows them to monetize an asset that is otherwise sitting idle.

However, the big issue with AirBnB’s tends to be the impact that they can have on neighborhoods as an aggregate. In many tourist cities, people flock to trendy historic neighborhoods to eat like a local. They want to stay in an apartment there and get the full experience. But; what happens when most of the apartments in that neighborhood have been converted into short-term rentals? You basically took a residential neighborhood and turned it into a resort. This has big consequences for sales tax, infrastructure, and local businesses. This prices out the residents, who now must live farther away. In addition, the overwhelming majority of airbnbs are no longer simply vacation homes owned by wealthy part time residents. They are owned and operated by large international real estate corporations with zero ties to the community the rental is located in.

When airbnb’s take over a neighborhood, you lose something in the process…people. Tourists are great, but they aren’t a neighborhood, especially when tourism is often seasonal.

AirBnb’s are often a great thing for a city/neighborhood in small doses, but bad in large doses. One of the reasons airbnb’s were competitive on price was because they were not subject to the same tax and regulatory burdens as hotels. Changes in law have slowly made them less competitive economically. I would argue that increasing competition and our impending real-estate crash will take care of the problem for us, but the questions of what we do with these depopulated neighborhoods is an interesting one. The libertarian would say do nothing and let the market sort it out. I’m not sure if that’s the best approach for everywhere. New Orleans’s approach is interesting, but see the potential for serious corruption and a high likelihood of zero to no effective enforcement.