From an economic point of view, the situation is very inefficient - holiday homes lie empty while locals struggle to find vacant places to live. Anyone care to propose an "economist's" solution to the problem?
Holidays homes exists because owners are speculating that tourists will pay a premium that compensates for the time that the rooms stay unoccupied and that overall it will be more profitable than renting it out for ‘100% occupancy’ to a local tenant at a lower daily rate (or equivalent monthly rent)
If a town gets popular among rich tourists and supply remains limited, the tourists will price out the locals (as is already apparent)
Zoning/limiting the number of airbnbs in proportion to the the total housing stock can be one solution to stop the tourist industry from gobbling everything else up (at the expense of the tourist economy)
Not an economist, but an extreme solution to achieve 100% efficiency, i.e occupancy would be for everyone (including locals) to become nomads and be willing to move homes everyday based on daily spot rates for housing and take up any unoccupied house that day based on what they can afford. (I.e a combined market where tourists and locals both live the hotel/Airbnb lifestyle). Sounds horrible though.
The apparent inefficiency (in terms of unnoccupied rooms/houses) IMO arises from the very real inconvenience and costs involved in moving houses too frequently. Contrast that with tourists who want to definitely want to stay in a city only for a few days. The two classes will always compete without intervention that favors one over the other - or tries to find some arbitrary balance
An economists point of view would say there is nothing wrong with empty houses; and in fact its a good thing because short-term low-barrier agreements allow the optimal price for housing in an area to be determined.
They would then say that the local wages will eventually increase to the point where a worker can live close enough to make the job in the high cost town worth the commute.
Maximum of 2-3 months that a residence can be rented short term in any one year. This allows owners to rent their homes while they are on holiday (and demand for the short term rentals is highest).
Anyone wanting to do short term rentals all year must abide by the same regulations that traditional accommodation providers do - paying commercial rates, not running their business in a strictly residential area, etc.
The classic solution to high prices is to increase supply. But in this instance the supply for long-term dwellings is used up by another sector (vacation stays), and that would happen to most new supply too. Eventually the profits of the two home uses would converge if you increase supply enough, but many tourist hotspots might run out of space to build long before that.
I think segmenting the space, as mentioned by matsemann, is a good solution here. If you allocate half the town (including half the areas for future development) to long-term housing and the other to short-term stays, you prevent the markets from sharing a single supply. In the first years it will still be much more profitable to invest and build in the short-term half of town, but as long as there's profit to be made in building in either half of town this will sort itself out.
The (free market) economist would say it is efficient: the value of vacation housing exceeds the value of permanent residency.
If the concern is truly that the usage is overall extremely low (not just vacation vs resident), due to property value speculation...there is the idea that property taxes should be higher.[1] This will force productive use of the land.
However, raising property taxes tends to hurt residents more. So...it depends what objective you actually want to achieve.
The "Economists" solution is always just that whatever rich people are already doing / getting away with, is obviously the optimal solution, so we should let them do as much of it as they want. Economics as a field was entirely created by the wealthy elites to further their agenda of oppressing the lower classes.
If a town gets popular among rich tourists and supply remains limited, the tourists will price out the locals (as is already apparent)
Zoning/limiting the number of airbnbs in proportion to the the total housing stock can be one solution to stop the tourist industry from gobbling everything else up (at the expense of the tourist economy)
Not an economist, but an extreme solution to achieve 100% efficiency, i.e occupancy would be for everyone (including locals) to become nomads and be willing to move homes everyday based on daily spot rates for housing and take up any unoccupied house that day based on what they can afford. (I.e a combined market where tourists and locals both live the hotel/Airbnb lifestyle). Sounds horrible though.
The apparent inefficiency (in terms of unnoccupied rooms/houses) IMO arises from the very real inconvenience and costs involved in moving houses too frequently. Contrast that with tourists who want to definitely want to stay in a city only for a few days. The two classes will always compete without intervention that favors one over the other - or tries to find some arbitrary balance