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What Airbnb Did to New York City

citylab.com

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Re: What Airbnb Did to New York City

#131

Post by jessaustin »

Spooky23 wrote: post #114
randomdata wrote: post #58

Earlier quoted context omitted.

There are always exceptions, but houses generally do not appreciate. Much like a car, they become outdated and wear out. With enough time and use, they even become completely uninhabitable. Each passing day sees less and less value in the home as it requires more and more cost to bring back up to pristine condition and costs start to compete with the value of a brand new home. Of course, if you keep your home in good…

Sorry, that’s just incorrect. Most value of residential property is in the structure. $/sqft of space is the metric, not the land plot.

Value is not the same as appreciation, which is what we're talking about. The value in a structure is the use one can expect to get from it over the next twenty years, or however long it takes to completely depreciate. GP is correct, especially so for 90% of homes built in rural areas in USA. These stick & drywall homes will have major problems within 50 years of construction, period. Many will require major fixes before then. Some homes in urban areas are built better.

Re: What Airbnb Did to New York City

#132

Post by somberi »

As an apartment owner in Manhattan, I find one part of the study surprising. Most Co-ops and Condos (two types of apartment financial structuring that is common in NYC), explicitly ban AirBnB rental. The apartment I own, in a fancy part of the city (Upper East Side), penalises the owner $350 for first infraction, and the fines escalate for each subsequent infraction. Most Co-ops even prohibit non-owners living in the building (they cannot rent it out). I wonder who these people are, that are able to buy AirBnB'able apartments.

I just searched Streeteasy.com, a popular NYC real estate listing site for Airbnb and I was not able find any listings (Query: https://streeteasy.com/search?utf8=%E2%9C%93&search=airbnb&c...).

I also looked at the data-source in the Citylab article (Airdna.com) and I see that I would earn 10% more by Airbnb'ing my apartment than finding a tenant. For me this 10% is not worth optimising for, considering the tenants go through a credit evaluation process, I don't risk any vacancy and I do not have to change the sheets every other week.

Re: What Airbnb Did to New York City

#133

Post by randomdata »

teh_klev wrote: post #118
randomdata wrote: post #85

Earlier quoted context omitted.

In saying property you're presumably looking at the land value combined with the remaining value of the structure, not the value of structure alone? Typically they are not separate line items in a sale even though if you did separate them you would see that the land is generally appreciating and the house generally depreciating. There are exceptions. Markets can do funny things from time to time, form irrational bubb…

In the UK buyers generally just see the structure and pay for what they think its worth, they tend not to think about the land (and whatever value it might also have) it sits on. Perhaps the exception to this would be garden size if the property isn't a flat (apartment). The reason for this is that it's pretty damned difficult to separate the two, especially physically. Planning laws generally discourage complete dem…

> It sounds like you're not from the UK so maybe all this is an alien concept.

You are right that I am not from the UK, so perhaps things are different (lots of room for local exceptions, as detailed in previous comments), but where I am from people compare the cost of a home against the cost of other homes, including the cost of buying vacant land and building a new home. The value of the land is implicitly considered because they see the actual value of land when looking at vacant lots and weigh their options.

Wear isn't the only consideration. An old home with low-amperage electricity service and nob and tube wiring that could burn down your home at any minute is less valuable than a home that is up to modern building standards. An old home with virtually no insulation is less valuable than a modern home that is airtight. These older features are more expensive to live with (higher insurance costs, higher energy costs, etc.) and the price has to reflect that. Same reason why a pristine car from the 80s is, in most cases (unless it has special collector value), still going to be worth less than a brand new model of equal original value in constant dollars.

To put it another way, I live in a rural area. The value of my property would be worth almost ten times more if the identical house was situated on land in the nearest major city. The value is the land and where that land is located, not the structure. The structure itself is, in this hypothetical example, identical. If we tore down the houses in both spots, the vacant lot in the major city would still be worth almost ten times more than my now-vacant lot. Houses can be moved – location is the value.

> As I already said earlier, property here, if lived in and sensibly maintained, isn't considered something that "wears out" like a car body.

Even on the timescale of centuries? I don't see many century homes that haven't required major and costly updates to be still usable today. I don't think anyone is suggesting that houses deprecate as quickly as cars.

There are exceptions. Price, of course, is still bound by supply and demand. There are reasons why used home structures may become scarce, while new homes are impossible to build, forcing people to compete for used homes. But this is not exactly typical.

Re: What Airbnb Did to New York City

#134

Post by busterarm »

Quinner wrote: post #96
busterarm wrote: post #77

Earlier quoted context omitted.

Really? Because rent control certainly myself and everyone I knew in a similar situation with a chance at class mobility. Rent control allowed my mom to stop being a cab driver and go to nursing school. Rent control facilitated me getting a really great education and career. I grew up needing food stamps, handmedown clothes and even shoes. How can you, with a straight face, tell me that bullshit?

Because you benefited at the cost of others. For everyone that has your success story, rent control causes a number of others to have even less access to affordable housing.

Mmhmm. Tax money goes to helping the poor and homeless too. That's more money that you could spend on housing.

Re: What Airbnb Did to New York City

#135

Post by spikels »

untog wrote: post #60
wilde wrote: post #59

Earlier quoted context omitted.

It’s nice that you’re benefiting, but rent control is relatively well studied and it doesn’t achieve its aims. https://www.economist.com/blogs/economist-explains/2015/08/e...

You're ignoring the OPs point. Rent controlled apartments are a rounding error in the grand scheme of making NYC apartments affordable. It's also been around for a very long time, so its effects are well known. As the article outlines, Airbnb is something new.

6,200 units on Airbnb in city of 3.4 million homes. Airbnb is also rounding error.

If you are concerned about affordability, the focus should be almost entirely on barriers to housing development.

Re: What Airbnb Did to New York City

#136

Post by kerkeslager »

ordinaryperson wrote: post #113
kerkeslager wrote: post #102

Earlier quoted context omitted.

> I get not throwing grandma out of the $250/month 4BR she’s been living in for 50 years, but it means something like 200,000 rent-controlled/rent-stabilized units are also raising everyone else’s rent by decreasing inventory. So you're saying that affordable housing is preventing housing from being affordable? LOL. > The endless red tape in new construction makes non-luxury bulidings unprofitable. Want cheaper rents…

> So you're saying that affordable housing is preventing housing from being affordable? LOL. I think you're conflating 2 types of 'affordable housing.' People say 'affordable housing' when they mean 'government legally forcing landlords to underprice their units' versus what the term should actually mean, 'a reasonable price range of rents'. > there's certainly lots of red tape in NYC construction, but I see zero evi…

> People say 'affordable housing' when they mean 'government legally forcing landlords to underprice their units' versus what the term should actually mean, 'a reasonable price range of rents'.

Huh? No, "affordable housing" means "rents people can pay" (an extreme example being a $250/month apartment). This isn't complicated.

> There isn't necessarily more but there should be less to incentivize builders. No point in going through all the bureaucracy if your margins are going to be super low.

Or, you could take steps that actually address the problem with the lack of affordable housing. Given that you just admitted red tape isn't necessarily more for affordable housing, removing red tape doesn't address the problem with the lack of affordable housing.

Red tape is a problem, but it's hardly the most pressing problem. Builders are making plenty of money in NYC. So when we're discussing real pressing problems like the lack of affordable housing I would appreciate it if you stayed on topic and didn't bring up the irrelevant problem of red tape. I'm not worried about builders having to fill out more paperwork when people are literally homeless in the snow right now.

> I'm not defending Airbnb as a nonentity

Your previous post was definitely defending AirBnB, even if it was just so you could bring up your pet issue of giving already-rich people incentives.

> academics and state politicians seem less enthused about taking a cold, hard look at housing laws, while well-intentioned at protecting low-income renters, probably play a far larger role in increasing housing costs.

Plenty of people are looking at housing laws. It's just that if you look at housing laws without the myopic lens of "incentives are the only way we can do anything", it's pretty obvious that laws which prevent owners from raising rents on affordable housing don't cause the shortage of affordable housing.

I'm just not sure how one can be so confused that they think allowing raising rents is the solution to rents being too high.

I realize I'm being hostile here, but your viewpoint is hostile to the poor and homeless of NYC.

Re: What Airbnb Did to New York City

#137

Post by PeterisP »

ordinaryperson wrote: post #71
pc86 wrote: post #46

Earlier quoted context omitted.

> I get not throwing grandma out of the $250/month 4BR she’s been living in for 50 years Sorry, but not when the 2BR across the hall is renting for $4,000/mo and is on the market for 4 hours before someone gets it. Grandma doesn't have a right to live in the exact same apartment for the rest of her life at the expense of everyone else.

The economist in me agrees with you but where is she going to live? Just going to ship her out to West Virginia? I'd be OK w/it if you have a humane way to implement it but I doubt voters in the city would ever sign off on it.

Well, that's kind of the point - if the possibility to live in a particular place is scarce and so desirable that it costs $4000/month, then you either can afford that or don't live in that place - and this mechanism is useful; it allows people who really value living in that particular spot to pay the premium and do so; and the money flowing in provides a strong incentive to increase supply.

Re: What Airbnb Did to New York City

#138

Post by teh_klev »

randomdata wrote: post #133
teh_klev wrote: post #118

Earlier quoted context omitted.

In the UK buyers generally just see the structure and pay for what they think its worth, they tend not to think about the land (and whatever value it might also have) it sits on. Perhaps the exception to this would be garden size if the property isn't a flat (apartment). The reason for this is that it's pretty damned difficult to separate the two, especially physically. Planning laws generally discourage complete dem…

> It sounds like you're not from the UK so maybe all this is an alien concept. You are right that I am not from the UK, so perhaps things are different (lots of room for local exceptions, as detailed in previous comments), but where I am from people compare the cost of a home against the cost of other homes, including the cost of buying vacant land and building a new home. The value of the land is implicitly consider…

> Even on the timescale of centuries?

Well....centuries depends on how many centuries and what revolutions, unrest and discord might arise :)

The village I live in (as were a few around this area), was completely razed to the ground during the 1715 Jacobite rebellion. So things kinda hard to start again and many of the houses in the core of the village were rebuilt between 1730'ish to the early 1800's. These old houses are highly valued, also the core village is also an architectural conservation area.

I could discuss this stuff forever but I need to get stuff done today :)

Re: What Airbnb Did to New York City

#139

Post by busterarm »

spikels wrote: post #135
untog wrote: post #60

Earlier quoted context omitted.

You're ignoring the OPs point. Rent controlled apartments are a rounding error in the grand scheme of making NYC apartments affordable. It's also been around for a very long time, so its effects are well known. As the article outlines, Airbnb is something new.

6,200 units on Airbnb in city of 3.4 million homes. Airbnb is also rounding error. If you are concerned about affordability, the focus should be almost entirely on barriers to housing development.

Huh? There's over 30,000 AirBNB listings in NYC.

Re: What Airbnb Did to New York City

#140

Post by ac29 »

true_religion wrote: post #95
busterarm wrote: post #77

Earlier quoted context omitted.

Really? Because rent control certainly myself and everyone I knew in a similar situation with a chance at class mobility. Rent control allowed my mom to stop being a cab driver and go to nursing school. Rent control facilitated me getting a really great education and career. I grew up needing food stamps, handmedown clothes and even shoes. How can you, with a straight face, tell me that bullshit?

The alternative to rent control is subsidized housing. Is that a bad thing?

Or people only living where they can afford to. Lots of people might like to live in New York, London, or Sydney (just a few examples). The big problem with housing subsidies is, who gets them? You cant just give them to everyone, or the price of housing will quickly correct to balance supply with the artificially increased demand.
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