[fsckboy]

>The article doesn't make it clear

we don't need to know.

if airbnb raised the prices and the market isn't there, rental income will go down and vacancy rates will go up and airbnb will lower prices again.

if airbnb raised the prices and the market stayed strong, they'd raise the prices more.

the higher the prices go, the more people with extra space to rent out will take notice and clean up their garage, or go stay at grandma's or whatever, creating more housing out of thin air (actually, on the margin) helping alleviate the housing shortage.

the same pattern would happen if hosts raise the prices themselves. also, if all the cheap places get rented, the market will appear to have higher prices even if nothing has changed.

let markets figure out prices, period. that's what markets do, it's one of mankind's stellar achievments. It's why the west is successful and communism fails.

if airbnb has monopoly power and is manipulating prices, fix that problem any day of the week, don't use a massive fire that destroys housing as evidence of anything, it means nothing, that's normal market correction.

[JackYoustra]

(while I think this isn't the affordability driver) this point about prices isn't really true - compare the graphs of two markets: one with a horizontal demand curve (perfect competition) and one with a downward-sloping demand curve (monopoly) - the first will have no deadweight loss, the second will have substantial deadweight loss.

Markets tend to the second and need state intervention in order to prevent the proliferation of monopolies. Functionally this is intervention every time price coordination happens, which... is pretty clearly what AirBNB is doing!

[fsckboy]

there is no reason to think LA real estate matches those special cases you've contructed

[tsimionescu]

This is all economy 101, rational preference BS. The reality is that suppliers very often collude to increase prices universally (particularly for things like housing, where there is almsot a natural monopoly - you can't bring in more land to the same city), and buyers have no way of knowing or acting on this. Airbnb is perfect for organizing such collusion, acting as a virtual cartel.

[fsckboy]

econ 101 actually explains collusion as you are describing, but you need evidence to show perfect collusion of all participants to make the point you are trying to make. the average person in LA probably knows friends who rent out spaces and would tell you that their friends are not part of a cartel

but the real estate shortage and natural monopoly you allege (it's not true as I already pointed out) would explain the post fire short term situation, so you don't need to grasp for conspiracy theories.

as i said already, airbnb's potential to manipulate RE prices is a problem to be concerned about in normal times. When a fire burns down much of the city, prices go up because there is an actual shortage, not price manipulation.

time for you to hit the books again.