[ordinaryradical]

"Compared to your typical Airbnb, no one “lives” in Sonder apartments except for its guests. Each rental comes with a living room space and kitchen so people can cook and relax like they would in their own home. Units range from studios in a heart of a city to sprawling a six-bedroom unit in downtown Montreal."

This is bad news for cities that are already short on housing. You're taking what could have been space for housing and erasing it with larger, lower-density hotel suites. Very luxurious and pleasant for the travelers, sure, but you're ballooning the space taken up by the "hotel" and magnifying the market pressures on everyone else in the process.

What's pretty surprising about this article is the breathless, unquestioned enthusiasm for these kind of ideas. Is this really a sustainable model for urban centers and hotels? Is this how we want to conduct our cities and use our most precious, economically productive spaces?

I'm pro Airbnb--when the room is actually rented out by the renter, everyone including the little guy wins. But this is a very "rich get richer" style of tourism with the fig-leaf of the share economy strapped to its extravagance, right?

[anonymous5133]

Only people to blame for ballooning housing prices are the politicians who have purposefully implemented restrictive building codes to make sure housing goes as sky high as possible. The reason it is like that is because we are under the impression that if housing keeps increasing then home owners will be able to spend more.

[Alex3917]

This. Look at how many millions of square feet of real estate have been announced in NYC in the past week alone: https://newyorkyimby.com/

Given that each city effectively has unlimited housing potential, the idea that tourists are driving out locals makes zero sense.

[timr]

Right. Because NYC is a magical fairytale-land of affordable rents.

Construction does not fix the fact that tourists pay 5-10x what local residents do for the same real estate. If you want to keep that from affecting rents, there's a very effective and inexpensive way to do it: don't let people turn rentals into hotels. Just like New York.

[Alex3917]

> Because NYC is a magical fairytale-land of affordable rents.

I mean if you're willing to take the subway to work, you can get a pretty large 2BR for less than $2K / mo. Yes you need a job to be able to afford that, but not a particularly amazing job. Just not unemployed for the entire year every year.

[timr]

I agree that good transit is the key to affordable housing. Those kinds of apartments aren't located in dense neighborhoods: they're in the Bronx, Queens and Brooklyn. Places are well-connected to Manhattan by transit. Places that would be impractical otherwise.

https://streeteasy.com/for-rent/nyc/price:-2000%7Cbeds:2?vie...

[andrepd]

I've no idea what you mean when you say "cities have unlimited housing". Should we just bulldoze everything and build skyscrapers, is that your idea of a good city to live?

[lev99]

Not everything, but North American cities need a lot more skyscrapers. Instead most North American cities sprawl.

Density increases innovation. Density decreases travel carbon emissions.

[andrepd]

I don't know about North America, but replacing everything with skyscrapers is simply not the least bit desirable in the vast majority of city centres in Europe, for example.

A city of skyscrapers would also make a pretty dystopian city, the way I see it.

[andrepd]

This is just not true, it may be a factor but it's not the "only". What you have in many cases is simple market pressure: kick out the residents and transform nearly every house in the city centre into a hostel/airbnb because renting to tourists rakes you in much more money. Now residents either pay 3x 4x the price they did, or they abandon the city centre for good, leaving it little more than a playground for tourists.

[aglavine]

One and a half million new citizens every two weeks, globally.

We need smart solutions to a complex problem.

[emodendroket]

Aren't something like half of AirBnB rentals not owner-occupied? I had the distinct sense that a lot of landlords had found running an AirBnB more profitable

[thrownblown]

i have yet to stay in an AirBnB that was the home of the owner or leaseholder.

[steve19]

The cheap end of the spectrum often has the owner renting out a room. After one bad experience I now only rent entire apartments.

[clay_the_ripper]

Well if you could build more housing this would be less of a problem.

[jseliger]

Seriously. If only there were some technology that let us put a larger number of housing units on a given amount of land! https://www.vox.com/cards/affordable-housing-explained/densi... . We could solve all of our affordability problems. https://www.bloomberg.com/view/articles/2018-03-14/californi....

[andrepd]

Building skyscrapers is simply not an option for many places, such as many European city centres.

[michaelchisari]

Building more luxury condos doesn't really help anyone if they're just bought up by foreign investors as speculative investments and safe havens.

[princeb]

building more luxury condos means that the rich foreign investors who are looking for speculative investments can stay out of mid-market housing meant for mid-income homeowners, and mid-income homeowners can stay out of low-income housing meant for low-income homeowners.

[brendanmc6]

A concept that really is lost on a lot of people. It doesnt make any economic sense to build and sell something of low value when you could do it at higher value. In a place like SF that is being squeezed by an influx of high income earners, new luxury housing just makes the old luxury housing less luxurious in comparison. If the market is screaming "we will pay absurd high prices for nice space!" Then by all means, meet that demand and everyone wins. Don't waste precious time energy and land building deliberately crappy subsidized apartments. That's lost profit for the builders, architects, and potential tax revenue too.

I'm not arguing for libertarian planning-- Let's leverage these high prices to build some amazing neighborhoods that can be enjoyed for generations: walkable, mixed-use, sustainable, transit oriented.

[nikanj]

I usually use the trusty car comparison here. There's no point in starting a factory that builds 20-year old shitty Saturns. It's more reasonable to build great cars, and trust that the second-hand markets provide the necessary supply of extremely cheap beaters.

In the not-too-distant past, condos used to deprecate. Now their value goes up with each additional year of wear and tear!

[andrepd]

>Then by all means, meet that demand and everyone wins. That's lost profit for the builders, architects, and potential tax revenue too.

Yeah, "lost profit", the cardinal evil. Sure, everybody wins, except the poor devils that make less than 100k and can't afford housing anymore. But who cares about them? Profit profit profit!

The truth is public policies should seek to maximise social gain. It's not their fucking job to enter into considerations about some people's profits.

PS: it doesn't make economic sense to waste money doing proper waste management when you can just dump your poison in the river, nevertheless we legislate that businesses must do the former.

[conanbatt]

Yes they do, look at any economic report.

[anonymous5133]

Agree. Another solution is to encourage employers to relocate away from expensive cities. We need more tech companies going to Oklahoma or texas where land is cheap.

[toomanybeersies]

Or if companies were more receptive to remote working and other flexible working policies, so that people could live where they wanted to.

[intended]

Land is cheap, network is not.

No one is going to move, because cheap land is not yet cheap enough to offset the opportunity (or perceived opportunity) cost of being in a keystone ecosystem.

[_8j50]

More or better? I think more apartments (condos that you own,not rent) would solve a lot of housing problems. Everyone just has to have a large single family house.

[apsec112]

Not even that. City governments so fetishize large, detached, widely-spaced two-story single-family houses that if you try to build anything else on 99.9% of streets, they handcuff you and haul you off to jail.

[rsynnott]

It's more or less the opposite in Dublin; you generally may not build detached houses in remotely urban areas these days.

Spoiler: There's still a massive housing crisis. Housing is _hard_.

[_8j50]

Hah,that's one extreme reaction.

[corey_moncure]

Alternatively, if you had less people.

[intended]

Or just ignore regulation.

Just remove the inconveniences and it’s a VC findable business model.

[gnicholas]

> everyone including the little guy wins

I suppose this is true in some parts of the country, but in the areas where real estate is tight, "the little guy" probably doesn't own his home.

[emphasis]

Sonder provides long term housing in all of its cities and is expanding into commercial zones with proper hotel licenses. This is actually relieving housing pressure because tourists stay in Sonders that are properly zoned as a hotel instead of tourists taking up residential space that would have been used for longer term residents.

Would we criticize Marriot or Hilton for making a hotel in a commercial zone?

[samclearman]

Most Americans have spare bedrooms for when guests visit. You could have your guests stay at a hotel but typically that will be really far from your home which sucks for everybody. Having Sonder or Airbnb style short term rentals distributed throughout cities could allow people to live in smaller apartments, eliminating bedrooms that sit unused most nights creating more space for everybody.

To be clear I'm not talking about the model of renting out your spare bedroom on Airbnb because nobody actually wants to do that. I'm talking about full time airbnb studios / 1BR's obviating the need for guest bedrooms.

[jMyles]

> To be clear I'm not talking about the model of renting out your spare bedroom on Airbnb because nobody actually wants to do that.

Demonstrably false - there are many thousands of such rooms available on AirBnb:

https://www.airbnb.com/s/homes?refinement_paths%5B%5D=%2Fhom...

I often prefer to stay in this configuration, especially in a city where I don't know the local language. This way you have a host and a cozy, lived-in place to stay instead of some sterile suite that makes you feel like you never left your own city.

[chrischen]

I've used Airbnb a lot, and in my experience at best it's 50% of the listings that are actually like that. Demonstrably false, yes, but also not as much like that as most people think.

[code_duck]

50% of all listings seems significant to me.

[untog]

> Most Americans have spare bedrooms for when guests visit.

I'd venture that most Americans living in the dense urban environments the OP was talking absolutely do not have a spare room kicking around for guests. Certainly, living in NYC, I don't and neither does anyone I know.

[ajspencer]

I'd venture that this statement also fails in general, not just urban environment. Seems like a very privileged perspective.

[emodendroket]

It's very common in suburban homes to have both an unused guest bedroom and an unused dining room solely for the two times a year the owner entertains. Since this wasn't really logical in the first place I doubt more short-term rentals would make much difference.

[toomanybeersies]

I think it depends a lot on how old you are.

My parents have 3 spare rooms, because my siblings and I have moved out and they haven't downsized to a smaller house.

But I wouldn't expect a young family to have a spare room. When I was younger and we needed a spare room, I was always relegated to the couch to make room for guests.

[ghaff]

I don't expect it's super common to have a dedicated guest bedroom in a house unless it's, as you say, a kid's room who has moved out. On the other hand, quite a few homeowners have a room they use as a part-time office, for hobbies, etc. that has a sofabed in it. That's more or less the case with me. I have a "spare" room that I use for various things but I can make up a bed if I have guests.

[ordinaryradical]

That's remarkably optimistic. But people also have guest bedrooms so that family members can stay with them, not away from them. And so that they can have part-time home offices. And simply to increase the overall value of their home investment.

I think expecting the presence of Sonder in the market to efficiently trade space with houses by obviating the need for guest rooms seems like a fundamental misunderstanding of how the housing market works, particularly why people buy houses larger than what they need or utilize.

[kgc]

This already exists in apartment buildings. Typically a few suites near the ground floor are reserved for rent by tenants for their guests.

[dragonwriter]

> Most Americans have spare bedrooms for when guests visit.

No, they don't. Some Americans do, but it's a minority; most that have a room that loosely serves this purpose have another non-bedroom function for the room that is not significantly impaired by occasional use as a guest bedroom, and a large number, probably a majority, have no guest bedroom at all, putting guests up on a couch (possibly convertible, but maybe not) or temporary cot, etc. in a common room (or displacing a resident, likely a child, to such an arrangement to free up a bed) when hosting overnight guests.

[DoreenMichele]

I've never had a spare bedroom for guests. I've known people who did. I saw them as unusually well off.

I would like to know where you get this idea that a majority of Americans have such. Is this merely anecdotal observation or is there a study you can cite?

[tommymachine]

OK but who’s going to convert all the larger units the small ones

[ForHackernews]

> Compared to your typical Airbnb

Are there still Airbnb flats that are owner-occupied? Every one I've stayed in seems to be operated as a full-time holiday rental.

> the fig-leaf of the share economy

There's never been any sharing in the so-called sharing economy. It's just about outsourcing labor costs and ducking regulations to make money.

[borne0]

>> six-bedroom unit in downtown Montreal

Maybe it's selective bias but I think of all north American metropolises Montreal would be particularly difficult to implement hotels in residential areas. Renters here have very strong rights, albeit backed by an understaffed authority. Tourism provides a substantial bulk to the local economy but it's not nearly enough that the local population will accept having fly-by-night partiers in otherwise quiet neighbourhoods. The article says downtown but I strongly suspect they mean neighbourhoods adjacent to downtown which have long been home to local workers and students, key to providing vibrancy and life which attracts the tourists to begin with (and the festivals).

[ec109685]

What is the difference between Sonder and a hotel chain buying a piece of property and building a multi-tenant luxury hotel?

[untog]

Sonder properties tend to be one-off apartments, not entire buildings.

[ec109685]

Right, but from a supply perspective, how does Sonder hurt things more than a hotel?

[untog]

Hotels are not in competition with long term residents for various reasons- zoning, unsuitable building types, etc etc. It is extremely uncommon for a hotel to buy an entire apartment building and turn it into a hotel because it's extremely difficult to do so.

By contrast, Sonder can buy individual apartments very easy. The whole selling point is that they are apartments, so there's no need to renovate etc.

[skybrian]

Hmm, do you have a source for more info? I think I stayed in a boutique hotel like that in NYC. I mean sure, it's probably a complete remodel. But it's still taking an entire apartment building off the market.

What it comes down to: everyone needs a place to live. Everyone takes up space. All housing space is valuable. But somehow many people think they can live somewhere without being a cause of the housing shortage.

The only way to not be part of the problem is to move away.

[emphasis]

Actually, this is arguing for Sonder's strength compared to typical Airbnbs.

Sonder is expanding with hotel licensing and from a zoning perspective is like a hotel. And yes, the units are being renovated to Sonder's standards. If you stay in a Sonder and ask about the history of the building it may be very surprising.

[pathseeker]

>use our most precious, economically productive spaces?

If that space is more economically productive doing something else, then it will be easy to outbid Sonder.

[jessedhillon]

The free market is not in-and-of-itself a goal to be pursued. Society has aims, and often, the clearest way to achieve them is through the free market with distortions strategically applied. This isn't SimCity, where it makes sense to zone your entire city center as industrial/commercial in order to grow the tax base: the city exists to serve the needs primarily of those who live there.

Otherwise, why not zone the entire city as a hotel?

[ajmurmann]

I'm totally with you on the market needing "corrected" incentives in some cases to get us what we want/need as a society. A example to me are the broken ISP market because of physical constraints. Another different category of cases are issues were the prisoner's dilemma applies where we have negative externalities like pollution. I don't see how that's the case here. I believe industrial needs to be its own, separated zone because of the pollution. Commercial and residential can be happily mixed though and if the market is telling us to build a giant apartment building somewhere because people want to live there and pay for it then why would you second guess that? Turning an entire city into hotels would of course never happen because there is no demand for that. Why not allow building of hotels everywhere though?

[jessedhillon]

The purpose of zoning is to segregate property bidders into classes by purpose, or willingness to pay. Otherwise, you have someone whose purpose with the property is to generate $100k/mo, bidding on the same property as someone whose purpose is simply to live with no intention to generate profit. It serves society to set aside a zone of property wherein people with residential purpose only can bid on the same property.

Likewise, it serves society to have bidders who are offering a long-term lease at a monthly price for an apartment to not have to compete against a stream of tourists who are spending out of their leisure budget. If a city needs new hotels, it can zone and permit the construction of them. The answer isn't to force renters to enter bidding wars against vacationers to discover the "true" price.

[troydavis]

At least in the US, most housing zoning failures aren’t residential vs. other uses, they’re about protecting certain types of residential housing (generally detached single family houses) at the expense of other residential housing. Here’s more: https://www.nytimes.com/2018/08/21/upshot/home-ownership-nim...

[stale2002]

If someone thinks they can generate 100k/month I absolutely want that individual to win the auction on that property.

That is a lot of extra tax revenue which would be generated and able to be spent on the population.

[jessedhillon]

I agree, in a single instance it sounds like the obvious thing to do. But it's not obvious that the cumulative effect of putting commercial and residential bidders against each other at a city scale will lead to desirable outcomes for society. In fact, what's obvious is that it won't.

[ForHackernews]

> Otherwise, why not zone the entire city as a hotel?

Why not? All of midtown Manhattan, at least. If superwealthy and tourists will pay an exorbitant rates, might as well soak them for all the taxes they're worth and spend that money subsidizing transport and housing in the rest of the city for locals.

[Grue3]

Tourists/visitors might are more valuable to the city than regular citizen. The amount of money you spend per day while traveling is way higher than your daily spending at home. Thus it makes sense to create as many hotel spaces as demand dictates.

[ordinaryradical]

It will be easy for single families to outbid a multi-million dollar corporation for these homes? What sort of buying power do you expect these families to have, relative to this enterprise?

[ajmurmann]

The enterprise has more buying power but will also want to turn their investment into a profit. So whatever they do with that land ultimately needs to pay off. For it to pay off it needs to create enough extra value by being in that location.

[citation_please]

Could it also be the case that investments driven by speculation and market manipulation would obscure the actual ROI (a lá Uber)?

Long-term the intuition is "this must be profitable at some point", so the market participants are acting irrational in the short-term. No one can compete with irrational actors, especially ones with an insane amount of capital to burn like we see today.

[ajmurmann]

If you think the market is irrational, bet against it. Just claiming to know better but not putting your money where your mouth is and not having skin in the game is a anti pattern that's advisable in this case.