I have read a lot in the last few years about ‘Airbnb apartments displacing normal residential renters in European cities’, ‘cities such as Palma de Mallorca banning Airbnb’, etc.
Now we (Mops and Möpsin) have spend a lot of vactions in Germany, and once each in Ticino and St. Peterburg) these last few days in holiday apartments that we found in web portals like booking.com, fewo-direkt.de, on the site of the apartmant owner or on the site of the local chamber of tourism. We have never used Airbnb yet.
Is there a principal difference between ‘using Airbnb’ and ‘renting a holiday apartment found in one of diverse ways’?
Has Airbnb, as such, in fact, been disruptive to the holiday apartment market and led to a much larger supply, at the expense of the residential rental market?
Or is ‘Airbnb’ in such reports only a lazy journalistic shorthand for ‘short-stay apartment rental, as practiced for eons and in the last few decades made easier by a large number of Web portals’?
My feeling is that Air BnB is just a convenient whipping boy for those who like to complain about gentrification as well as high housing prices. And, of course, the hotel industry is eager to help fuel the outrage as well as pushing for stricter controls.
I’m not an Air BnB fanboy, as I mentioned in the earlier thread I haven’t used them. Traveling solo as I do and with no appeal of cooking my own meals means that Air BnB usually isn’t for me.
I’ve yet to see any solid evidence that there is a substantial amount of property that is being held off the rental market for local residents so it can be let out for Air BnB. While, yes, someone can make more money by renting out a place on a daily basis than a typical lease, there is also a lot of risk involved. A crackdown on Air BnB by the local government, plus there’s always the risk of a major news event or recession that will wallop tourism.
To answer your question in the OP, I think the media uses Air BnB as a general term for all short term holiday rentals. Air BnB was originally set up to be an informal place where people could rent out spare rooms and not necessarily on a year round basis, distinguishing it from someone who rents out a place full time year round.
Air BnB absolutely makes the process more efficient. It makes landlords able to consistently keep a place full (by adjusting the rates until they have a steady flow of renters) all the time, making a tidy profit. In some metro areas, people do buy properties in disrepair, fix them up, and rent them out on AirBnB for maximum profit.
In addition, AirBnB undercuts many of the taxes and overhead that hotels have to pay.
But it’s not the root cause of a housing shortage. In fact, AirBnB reduces shortages, by making sure each residential space has someone in it almost all the time. Holiday apartments might sit vacant for a while. The reason shortages exist (or, really, exorbitant rents - there aren’t really shortages in a free market, just rents that some can’t pay which by definition makes the supply equal demand) has to do with a lack of new supply. Mostly in key cities where there are a lot of high paying jobs and city policy that prevents construction of new units.
The old way of renting a “holiday apartment” is that someone who lives year-round in an apartment in, let’s say Venice, would go on vacation. He or she would decide to rent out the Venice apartment while travelling. Since popular holiday times tend to coincide, the Venice apartment would likely be free only during high travel times when hotels might otherwise be fully booked or very expensive. He or she might even choose to leave Venice at that time precisely because it’s a week when Venice is known to be overflowing with tourists. Thus, this limited apartment rental does nothing to contribute to a housing shortage but helps to alleviate a hotel shortage.
I don’t know which journalists you are reading but the ones I read tend to say things like “Airbnb and other platforms for short-term rental listings…” They may quote people who refer to AirBnB exlusively, but, be honest, AirBnB is the overwhelming market leader in this service and they are the ones causing the biggest effects, whatever those might be.
Landlords can also buy properties in disrepair and rent them to long-term residents. Good landlords can do so “consistently.” It’s a real business that has been going on for eons before AirBnB was founded.
Let’s not hold skirting on taxes as a virtue. Those taxes help to pay for the city services that all the AirBnB users are enjoying.
There is no single cause of all the housing shortages in the world but the interesting question is whether AirBnB is a contributing factor to some or any of them.
This is just wrong. The problem is that instead of the vacation apartment rental I described above, AirBnB makes it easy for a person to lease an apartment or buy a condo and offer it exclusively for short-term rental. That is, AirBnB users take housing that is otherwise available for long-term rentals and use it as a substitute for hotels. Simple economic inference says that AirBnB used this way would tend to reduce the supply of long-term rentals and increase the supply of short-term hotel equivalents. One would expect then that AirBnB rentals would thus tend to increase housing costs and reduce hotel prices. Whether that bears out empirically, I’m not sure. I suspect that the effect on the hotel market is much bigger than the effect on the housing market.
Your analysis is ‘just wrong’. You are missing the fact that short/long term housing are substitute goods for each other. Also, Airbnb offers monthly rates, not just daily, where the rates end up being somewhere in between the cost of a motel and apartment.
Do you have any data to support the idea that short and long term housing are substitutes? I don’t think they are highly substitutable. People looking for apartments don’t also check the prices on hotels. I’ve never heard of anyone finding a long-term apartment on AirBnB. I’m sure it’s happened but that is not where they make their money. If you believe otherwise, please find data.
“*n the 10 cities with the largest Airbnb market share in the US, the entry of Airbnb resulted in 1.3 percent fewer hotel nights booked and a 1.5 percent loss in hotel revenue.” http://www.nber.org/papers/w24361
Should anyone want to read the newly issued conference report on how AirBnB is affecting Edinburgh (a major tourist destinatuon) the report is available to download as a pdf here. Views are expressed by a number of bodies and people on all sides of the issue. The conclusions (on p13) are summed up in the section’s header: ‘An Imperative Need to License and Regulate’
The Cockburn Association, who organised it, are Edinburgh’s prime independent heritage watchdog.
There is a segment of the hotel market dedicated to long term stays, which have multiple bedrooms and better cooking facilities than your average hotel.
I haven’t found any data on the percentage of stays for a month or longer.
As I mentioned in the other thread, I know of a case where a woman was renting a large number of apartments in LA specifically for AirBnb usage, which was against the rental agreement. So that is a specific case of AirBnb affecting the housing shortage.
I’m a fan of it, but the problem exists.
There can be legal issues with hotel stays longer than 30 days and many hotels disallow it.
Basically, in many places you are considered a legal resident if you stay in any place, even a hotel, for more than 30 days.
So the hotel can’t throw you out without a formal eviction.
Laws vary state by state. For example, according to this article, NY state provides for an exception if the hotel tenant has another legal residence.
But it can be problematic in most jurisdictions.