And if it wasn't for people turning that supply into AirBnBs to satisfy their short term greed and tourists, there wouldn't be as much of an issue. AirBnB has certainly contributed a lot to the lack of supply in major tourist destinations.
Respectfully: if you're going to attempt to co-opt a political framing to which you are less than familiar, drawing a transparent parallel between the fundamentally consumerist nature of tourism and needing a place to live that lets you get to your job, and then attempting to tag it as nativism--let alone an "extreme version" of it!--is probably not the least disingenuous way to do so.
You are describing something functionally on the same scale as to the "extreme blowback" rich people get when people make fun of them on Twitter for, say, burning untold amounts of dead dinosaur goop to make an NFT or to not quite go to space as a personal stunt. It is somehow, however, though not the "economically just circumstances" of the hand-to-mouth mom. Which is a situation to which I will confess some confusion, but whatever.
Where's the threshold of badness here, though? Sure, if 75% of residential units are up for short term rental, it's gonna be really hard for the remaining residents to form a strong community. But if it's more like 5%, or even 10%[0], is that really a big detriment to a "strong community"? That just seems like an easy "no" to me.
[0] And I would expect those units to not be evenly distributed around a city; there will probably be higher concentrations in the more touristy spots where this community stuff matters less, and lower concentrations in the more "sleepy" residential areas.
I’m not sure what exactly you mean by “strong community” here, but that is a phrase often invoked for nativist and exclusionary impulses which I would rate as quite a bit less legitimate than a desire to see the world.
The social consequences to a tourist going to a hotel instead of an Airbnb are nowhere even near the social consequences of an even modest increase in rents.
Only if you ignore the difference between immigration and tourism.
A tourist is fundamentally there for temporary and consumptive reasons. They don't have any long term interests about the place they visit. They are accommodated as guests. As such, it is only rational that they don't receive the exact same consideration as the residents who have their skin-in-the-game of that same place.
When I moved to New York for a job, I spent over a month in an Airbnb while searching for more permanent accomodations. My roommates in the Airbnb were all in a similar situations, needing a place to stay for 1-6 months.
Without the Airbnb, where would we have gone? A hotel? But a hotel with a useable kitchen and good wifi would have been too expensive for any of us renting one of those rooms.
Historically, there was a type of lodging that seems almost perfectly suited to this situation: a boarding house. At least in my southern US city, the last of the ones here were legislated out of existence in the 80s and 90s as part of the war on drugs.
Not sure if NY has this, but when I first moved to the bay area in 2004, I lived for three months in a studio apartment, in a building that catered to shorter-term stays, before finding something more permanent (I was on a 3-month contract and wasn't sure I'd be offered a full-time position). Chatting with the property managers, I learned that my use case was pretty common, as well as people only intending to stay in the area for a few months, as well as your use case of needing some time in the area before finding something more permanent. If we'd had Airbnb back then, it would have almost certainly cost 2-3x what this place cost.
Tourism isn't always good. Places get trashed, many "tourist" destinations are starting to regulate because people come in, trash the place, and don't give a fuck and leave. It's sad
No one said they aren't. Some people just don't want their next door neighbor renting out their home/apartment to a bunch of tourists who don't care about how disruptive they are to the people who actually _live_ there.
I live in San Francisco, so I know my view of crazy housing markets is skewed, but I guarantee you that housing would be just as expensive here if Airbnb didn't exist.
And let's not assume that anyone who wants to list a property on Airbnb is mainly motivated by greed. Attempting to paint the people on the other side of your argument as evil is a pretty transparently bad argumentation strategy.
This is a mantra often repeated on hn when anythig related to housing comes up, but is it true? Many cities around the world have experienced the airbnb effect or similar: demand from tourists which can pay better means higher demand and lower supply as houses are converted into tourism accommodation. This is also also the mechanism of gentrification in general, so it's not just tourism.
Nominally cash flow negative doesn't mean shit. For starters many people own the property outright, making it cash flow positive, and beyond that what matters is your change of equity.
If you start with 50 000$ then loan against 30 000$ of that, but your equity increases by 70 000$ as you make payments, and then sell the house at the same price, you're still up 40 000$, even though your cash flow was -30 000$.
A cash-flow negative house that doesn't appreciate and become ever more cash-flow negative is a TERRIBLE investment compared to the S&P 500.
In the simplest terms, take a $100k house. 20% down = $20k downpayment + $3k closing costs. Generally, this is a house that would rent for at least $800/m.
Your payment is $337/m. Of that, only $143 is principal. If the house is even 5% cash-flow negative - that means you're only getting ~$100/m in principal.
You'd get ~$145 on your $23k downpayment in the S&P 500. And instead of being cash-flow negative and taking money OUT of your investments, you could instead ADD to it.
Add to that the fact that you'll pay an additional ~6%+ transaction costs at closing -> And even a 5% cash-flow negative house with 0% appreciation is likely to come out negative.
This only works because the Fed pretty much guarantees that house prices will appreciate >3% per year for the last 20 years.
3%*5:1 leverage => Crushes the S&P 500 average. Even if you're 10% cash-flow negative, it usually beats the S&P.
Add to that the fact that $250k of the capital gains are tax free -> And that pretty much eliminates the 10% transaction fee and makes it better tax-wise than the S&P 500.
I think we're talking past each other. You're not describing a house that's cashflow negative, you're describing a cashflow positive house, with 337+mainrenance expenses and >800/m revenue
Generally a cashflow negative house will have a much higher payment over a shorter term with much more principal, and much more in rent.
You also forgot inflation of the house price. You have to take into account 2% increase in house prices even without the fed doing anything, and leverage that. When you do that you find out that almost all of your interest payments disappear and much more goes towards you principal, thus increasing your equity gain.
Theres no supply because investors are hoarding them. Blackrock is buying out entire neighborhoods and thats really the tip of the iceberg compared to airbnb listings.
I would like to see a strict occupancy tax, or ban the amount of real estate a company/person can own.
Oh yea, require all real estate purchases to be American, or have legitimate relitaves residing here. We are selling our land with an to anyone in the world with money. I don't know of any country that makes it so easy for the wealthy to buy land.
I would love to know which countries allow real estate purchases like we do?
(I am against regulations, and more laws, but only for the little guys. Regulate big corporations like Blackrock, Facebook, Google. Regulate the big boys, so the little guys can begin to get ahead. Yes-I conflated two different industries.)
>I would love to know which countries allow real estate purchases like we do?
Both the UK and Canada for sure. I think Canada is considering a foreign buyers tax but I don’t think it has been implemented yet. In the UK, property taxes don’t even exist - only council taxes paid for by the occupant which makes leasing much easier.
What you propose wouldn’t do anything but cause unforeseen problems. Blackrock has bought a few thousand homes; it has no significant impact. But - big companies build housing and sell it; you’d probably screw major homebuilders and limit new supply, making the problem worse.
If you look at the data on home ownership rates[0], which is the percent of homes owned by their occupant, the number did take a big drop after spiking up due to the pandemic, but still remains higher than it has for most of US history since the 1960s.
I've seen this black rock conspiracy posted elsewhere, and while it makes for a compelling dystopian narrative that large corporations are secretly buying all our homes to lease back to us, the reality is just not true.
People are leaving expensive urban housing in droves and competing for what seem like relatively cheap houses to them, so they are comfortable bidding wildly (I know many, many real people in this situation). I'm sure Black Rock wants in on the action, but until that rate falls dramatically lower, I'm not particularly convinced that that's what's happening.
Because space in desirable areas is finite? Because the creation of that proximate supply does reduce the desirability of those areas, not merely in terms of the upper class but the middle and--eventually, given a far enough point on the curve--the lower classes too? Because ruining things for everyone because of the investor class is antithetical to a humane society?
(Which is to say that there is absolutely an argument for increased supply, but rather that the interests of the REIT-helming class are not congruent with the interests of the people who live there, and thus can either come congruent or be ignored.)
Because we let people tell their neighbors they can’t build more housing, an action that used to be unconstitutional. Now it is, based on one openly racist court case from a hundred years ago.
Look up how much they are actually buy it's nothing. Institutional investors don't even own a million home. Blaming some far off wallstreet fund instead of acknowledging the failed local policies is completely misdirected.
Supply increase difficulty has not changed recently. Demand increase has. So if we're going to blame it on one factor, it makes sense to pick the one that has changed and is easier to control.
Less friction in increasing supply is also not an unalloyed good. You can look at the commercial office market, which is much less restricted and has huge boom/bust cycles. And that's before we get to the externalities of rapid housing growth.
I'm actually for increased supply, but I'd rather we stuck with better arguments for it than helping Airbnb get off the hook for the reasonably forseeable consequences of their actions.
> Supply increase difficulty has not changed recently
Sure, but supply keeps increasing less than demand is increasing, accumulating the housing shortage each year. This is a decades old trend, from long before AirBnb.
I think that supply increase is vastly dominated by regular old population increase in cities that refuse to build housing. I'd need a lot of convincing to believe AirBnb is more than a minor factor.
Yes, and I said, I'm for supply increase for exactly that reason. But it's a complicated problem, and AirBnB's unarguable supply decrease can only make it worse.