What Airbnb Did to New York City

Not wage stagnation or cost of living increases, or AirBNB (oh wait)

Just rent control

So let’s screw the people relying on it because in some narrow context about screwing others (that never happens otherwise in the economy!) rent control is bad

There are hacks and patches all over “the system”. That’s called free market making agreements as needed when needed, IMO

Just because when quantified some story is told that seems off to external players doesn’t mean it’s anyone’s concern but the parties directly involced

Here's one way to think about Airbnb: prior to Airbnb (and VRBO and…), housing values - both rents and asset prices - didn't incorporate all of the legal and zone-permissible demand for them.

Imagine if, until now, the only way to rent an apartment was by pre-paying for a year. Instead of $1,500/month or $2,000/month, every landlord quoted and charged a price per year, like $18,000/year.

A company or business model then introduces the idea of only charging by the month (ie, what the US market is now based on) rather than requiring pre-paying for a year. 2 things would happen:

1. Demand would increase (and prices would probably go up), because someone would be serving previously un-met demand. (From the article: "over the last three years, Airbnb has increased long-term rents in the city by 1.4 percent")

2. The customer base would change, since the demographics of those able to come up with 1 month's rent are very different from those who can front 1 year's rent. Some of these newcomers would be non-residents or short-term residents.

If this sounds a lot like what Airbnb has done, you see the challenge. There's nothing inherently permanent about current rents or asset prices, nor the current customer base. They're just reflections of the ways that a property can be used at one point in time – and there's nothing special about those ways. People got used to the current demand because the product mix changed so little for so long.

Whether that's good, bad, or some of both is a reasonable question, but in any other industry (even with other supply-constrained assets), society almost always considers it good. The underlying product was actually more useful than was widely recognized.

(If the yearly vs. monthly rent example sounds outlandish, here's another that's actually happened: 10%-15% mortgage interest rates, as existed for most of the early 1980s. 13% mortgages could change the supply of housing enough to meaningfully impact asset prices and rents, that is, create a new normal price.)

I agree with the article's sub-point that this has little or nothing to do with home sharing. The core change is that it's now possible to use an existing product to serve a market that was previously not served well.

(Note that I'm ignoring housing where short-term rentals were not legal prior to Airbnb - say, before 2013 - or were legal but not permissible under zoning. While those are important considerations, many or most short-term rental limits were passed in response to Airbnb.)

I'd rather live in a proper house. But it's pretty common for working class rural Americans to live in mobile or prefab homes on nice properties with gardens, fruit trees, hiking trails, sheds for four wheelers, etc.

Trailer parks, which are dense neighborhoods of mobile homes or tailers, tend to be less nice and inhabited by people in poverty. Though they often have other options, like absolute run-down shacks way outside town.

Point being, there's some distinction in practice and I won't begrudge people living within their means.