Even before we had the big companies doing it an HOA I lived in put in a lot of work to ban short term rentals and establish some rules for subletting.
We had two condos that were constantly some kind of party house folks would rent, a few others that were more occasional. Visitors would leave trash out, park in other people's spots, loud at all hours. They didn't care, none of their mess had any impact on the visitors so they did whatever they wanted. The handful of folks renting out what were all of 6 or so units were very vocal trying to lower HOA fees and so on ... they didn't care about long term sustainability of the road in our neighborhood or maintaining the lawn or even insurance coverage.
Had to go through a lot of work establishing new rules and getting everyone to vote on it but it was worth it.
HN users love to complain about HOAs being overly restrictive but they can play a valuable role in keeping AirBnB trash out of residential communities. I'm glad that my HOA has banned short-term rentals from the start.
> keeping AirBnB trash out of residential communities
Why not ban the activities you would classify as “trash” (presumably obnoxious behaviour) which can come from owners or short or long term renters, rather than focus on short term renters only?
It seems akin to banning driving from bars, rather than banning drunk driving.
As someone who has been running a short term rental in an apartment building for over 6 years, I would ask: were there any genuine attempts to reconcile from either parties?
I myself had some troubles as well, but it didn't look impossible to run a short stay and keep the peace at the same time.
The argument in the article seems to be that supply-side arguments (there aren't enough homes) don't explain housing prices, but would it not make sense that in this case there aren't enough hotels/short term condos, etc?
I admit I am biased, I usually hate staying in hotels and when I'm traveling I often want to be near family, so a house or apartment nearby where I can walk is better than a hotel where I have to drive.
> It’s funny how China has basically the inverse problem as America. We subsidize demand and restrict supply. They subsidize supply and restrict demand.
We really should reconsider how we structure our policies
I mean the obvious solution is a reasonable process for opening a B&B or inn in different areas of town.
The issue with short term rentals is that they are self-reinforcing on the upside, where large deltas in housing prices disincentivizes long term leases, which encourages more short term rentals, which raises housing prices by perpetuating the shortage.
I think people should be allowed to operate a B&B if they want to, but they should be in the business of operating a B&B, not of side income while waiting for an appreciating real estate asset to mature.
Housing should be used as housing, and when it has become traded as a HODL asset, the market is not serving the public.
The way to solve the solution is to legalize density. Scarcity business models collapse when the marginal return approaches the marginal cost of production.
Since that’s not happening, we ought to not let people just jump in and out of the short term rental business, because it is self-reinforcing on the way up and on the way down. I think it’s good policy to reduce bubble prone industries where possible because the downside risks are non-trivial to the community.
I’m a full time nomad and stay in airbnbs and similar almost full time going on four years now. I used to rent my house but finally sold it so I figure I’m a net zero on the housing issue. I also like to spend a few weeks to a month in a walkable residential neighborhood and get to know it a bit. You can’t usually do that in hotels.
You’re quite literally exemplifying the issue described in the article which is homes being used for short term rentals rather than people who are there for the long term and form communities.
As someone who owns a house in one of those "walkable residential neighborhoods" the reason they feel so pleasant is precisely because virtually all the people living there have lived their a long time (most people on my block have been here ~20 years). This means there is a community that keeps the local shops alive, people know each other so that they know who does and doesn't belong which keeps them those places safe (I can't overstate how important this is), people raise their children there so they remain active in local politics and work to ensure policies that continue to make these areas nice, and, because they have invested a lot in that area, their homes are all beautiful.
The houses in my neighborhood that are AirBnBs is painfully obvious, and thankfully remain quite few in number. The parts of my city that contain higher density of housing for "full time nomads" are notably worse, and often have much higher number of other "nomads" (mainly itinerant homeless). I've lived in other cities in some beautiful, historic neighborhoods, that are effectively ghosts of what they were given that a critical number of the apartments don't have permanent residents. Still pleasant for a stroll, but you can feel the void of a living community of residents.
Tangentially, a big reason I dislike hotels particularly the UK is the trend of removing windows that open and generally getting sick from the rooms. Lots of fire retardants, plus the residual cleaning chemicals in the sheets. The more modern or renovated a hotel, the more likely this is
I often get chest pains and watery eyes from hotel rooms, compounded by the lack of fresh air
All because the hotel wants to save a few £ in case someone leaves the window open with the aircon on
And the reason fire retardants are so heavily used is because the chemical companies heavily lobbied for it years ago, plus manufacturers love being able to use cheaper materials and methods then just dousing in a cheap chemical to achieve the specification
> If we want to address the many environmental crises that we’re in right now, housing is one of the best ways to do that—to stand up and say that housing is a human right and that empty properties shouldn’t be investment properties. All the things that make a community run should be accessible within walking distance, biking distance, transit distance.
That's nice I guess. Zero mention of zoning or any structural forces. Let's just make housing a human right and that'll do it.
> Let's just make housing a human right and that'll do it.
How would that right read? Maybe “Every Canadian has the right to housing in the desirable neighborhoods of Toronto”? I’m not sure if that is really feasible.
“Every Canadian has a right to negotiate to rent or buy housing in any neighbourhood in Canada”
“Every Canadian has the right to build as much housing as they want in any neighborhood in Canada.”
More pithily, if we want housing to be a human right, then building housing also has to be a human right, one that cannot be vetoed away because your neighbours don’t like it.
Ofc not everyone gets what they want, and not everyone can live in Shaughnessy or Mount Royal. But it does not follow from this that it makes sense to ban all forms of buildings except houses, like we do now, on most land in all cities in North America.
I want to invoke my human right to live in a place with the population density of the late great Kowloon Walled City.
Less glibly, just by cutting regulations I’m sure you could get affordable housing in a place like Toronto, but wow the people who think housing is a human right would howl and scream about 10m^2 apartment high rises.
I got the 10m^2 number from the size of some Tokyo apartments. The average apartment size in Toronto, by contrast is ~60m^2.
It doesn't need to be a human right, we just need to regulate housing to be owned by individuals and mandate a limit for how many residences one has.
This is because due to the scarcity of homes and that they cannot be manipulated or printed out of thin air and lent short on a computer, they have become tools of speculation, so the regulation is justified.
"housing a human right" epitomises a feel good do nothing platitude that won't fix the problem.
Fixing the problem involves building more so supply isn't an issue and accepting tha tin some areas housing is unfortunately just going to be pricier. Wish economic literacy was more widespread :/
I think owner-operated mother-in-law suites and similar allow neighborhoods to strike a nice balance between long-term community commitment and supporting reasonable amounts of of tourism.
My wife and I host an Airbnb just outside the city limits of Flagstaff. We have two houses on the property and live in one. Our listing makes it clear that we live on the property. Our neighbors never complain. There is an Airbnb two doors down that regularly generates complaints due to a remote owner.
The problem I often see in these discussions is a lack of conversation around key areas:
1. Why are short-term rental units so popular with the renters? Why has the traditional market in this space fallen off and what can they do to adjust to new expectations by consumers.
2. Why are short-term rental units so popular with the owners? In the Toronto area for example I've heard from several unit owners that they would rather lose money than rent in the trad manner due to how far the rental laws have swung that makes evictions nearly impossible.
3. Specifically here in Canada these sorts of conversations always feel like a smoke screen or a way to find a useful idiot to get the masses angry with rather than addressing the core problem. In Canada our core issue is immigration policies that over the last 2 decades haven't been linked in anyway with capacity of housing, schools, healthcare etc.
1. They’re popular because they’re often better than hotels. You get a kitchen, more space, often dog-friendly. I much prefer a STR for weeklong trips for those reasons.
2. More revenue. A STR might go for $200/night. So 10-15 nights to clear the same as a monthly lease.
Plus the legal difficulty dealing with a bad tenant, as you note.
Short term rentals are so popular because the operators aren’t in the business of operating a short term rental.
They are in the business of asset appreciation, and a short term rental is a twofer: you increase the housing shortage by removing a unit from the market, while maintaining an revenue stream to offset the cost of depreciation.
The business model is completely built on rent seeking and would collapse rapidly if it was just legal to let housing supply meet demand.
Instead, there are no voters in the jurisdiction to change the laws, because the vast majority of the electorate all gains from the rent seeking behavior.
The people who suffer are the minority who literally were not alive when the housing shortage began.
The fix is to require residential properties be owned by individuals and place a limit on how many homes one household can own (3?) without incurring luxury taxation.
Then we can let the short/long term rental market sort itself out and also allow people to invest in real estate at a reasonable rate.
Anecdotally I used a short-term rental because I was staying in a foreign country on a 6-month visa.
Short-term rentals jacking up prices are a problem for that country and many others, and I was contributing to the problem, but it was important for me to go and AFAIK there aren’t other options.
I wouldn’t have minded staying in the country longer but the visa and my contract don’t work that way.
EDIT: I also looked at hotels. I would’ve been fine with a half-decent hotel room that had a kitchen, but all hotels I saw were more expensive than the rental.
Doesn't the income for the jacked up prices also accrue to that community though? IMO it is not respectable to take someones money and give them a visa then act like they are a problem or unwelcome.
Same. I’m traveling with our family of four tonight to visit an elderly relative, we’re meeting halfway. If we stayed in a hotel, we’d need two rooms, we’d have to pay for restaurant food.
My wife has a Walmart grocery pickup order we’ll grab when we get there. We’ll eat good food and not break the bank.
Also, although we looked, there’s no obvious “third space” we could meet at and hang out for 8 hours or so. The Airbnb is the best value hands down. We get to live in another city for two days.
I wonder why STRs are so popular with lessors. All I have heard is that the unit economics are tough and the market is saturated in many places. I also expect a history as an STR to reduce resale value as it's sort of like buying a used rental car with more wear and tear.
I would caution anyone with a sweet, sweet mortgage rate looking to trade up their personal residence and hold onto the original as an STR to do the math before going down that route.
The areas that he mentioned are touristy places, with low density, low land prices, and low regulatory burdens. It's _easy_ to build more there. If you're desperate, you can just buy a plot of land and put a mobile home there.
But it turns out that 50-60% of people in these locations are renters. And about a half of them are overburdened (more than 30% of income goes to rent).
The reality is that the short-term rentals expose dirt-poor communities to people with higher incomes. And the way to fix this is NOT to ban higher incomes from moving into low-income communities. Quite the opposite. We need to make more opportunities in these kinds of communities.
Promote remote work, give tax breaks to companies that want to build offices in these areas, etc.
Maybe, but there is a lot of bad logic and fuzzy thinking blended into this article. Describing rents as "above-market rates" is one of the dead giveaways of a nonsense political/economic mental model.
Readit News
We had two condos that were constantly some kind of party house folks would rent, a few others that were more occasional. Visitors would leave trash out, park in other people's spots, loud at all hours. They didn't care, none of their mess had any impact on the visitors so they did whatever they wanted. The handful of folks renting out what were all of 6 or so units were very vocal trying to lower HOA fees and so on ... they didn't care about long term sustainability of the road in our neighborhood or maintaining the lawn or even insurance coverage.
Had to go through a lot of work establishing new rules and getting everyone to vote on it but it was worth it.
Why not ban the activities you would classify as “trash” (presumably obnoxious behaviour) which can come from owners or short or long term renters, rather than focus on short term renters only?
It seems akin to banning driving from bars, rather than banning drunk driving.
I myself had some troubles as well, but it didn't look impossible to run a short stay and keep the peace at the same time.
I admit I am biased, I usually hate staying in hotels and when I'm traveling I often want to be near family, so a house or apartment nearby where I can walk is better than a hotel where I have to drive.
> It’s funny how China has basically the inverse problem as America. We subsidize demand and restrict supply. They subsidize supply and restrict demand.
We really should reconsider how we structure our policies
The issue with short term rentals is that they are self-reinforcing on the upside, where large deltas in housing prices disincentivizes long term leases, which encourages more short term rentals, which raises housing prices by perpetuating the shortage.
I think people should be allowed to operate a B&B if they want to, but they should be in the business of operating a B&B, not of side income while waiting for an appreciating real estate asset to mature.
Housing should be used as housing, and when it has become traded as a HODL asset, the market is not serving the public.
The way to solve the solution is to legalize density. Scarcity business models collapse when the marginal return approaches the marginal cost of production.
Since that’s not happening, we ought to not let people just jump in and out of the short term rental business, because it is self-reinforcing on the way up and on the way down. I think it’s good policy to reduce bubble prone industries where possible because the downside risks are non-trivial to the community.
> a walkable residential neighborhood
You see the contradiction in your logic right?
As someone who owns a house in one of those "walkable residential neighborhoods" the reason they feel so pleasant is precisely because virtually all the people living there have lived their a long time (most people on my block have been here ~20 years). This means there is a community that keeps the local shops alive, people know each other so that they know who does and doesn't belong which keeps them those places safe (I can't overstate how important this is), people raise their children there so they remain active in local politics and work to ensure policies that continue to make these areas nice, and, because they have invested a lot in that area, their homes are all beautiful.
The houses in my neighborhood that are AirBnBs is painfully obvious, and thankfully remain quite few in number. The parts of my city that contain higher density of housing for "full time nomads" are notably worse, and often have much higher number of other "nomads" (mainly itinerant homeless). I've lived in other cities in some beautiful, historic neighborhoods, that are effectively ghosts of what they were given that a critical number of the apartments don't have permanent residents. Still pleasant for a stroll, but you can feel the void of a living community of residents.
Deleted Comment
I often get chest pains and watery eyes from hotel rooms, compounded by the lack of fresh air
All because the hotel wants to save a few £ in case someone leaves the window open with the aircon on
And the reason fire retardants are so heavily used is because the chemical companies heavily lobbied for it years ago, plus manufacturers love being able to use cheaper materials and methods then just dousing in a cheap chemical to achieve the specification
That's nice I guess. Zero mention of zoning or any structural forces. Let's just make housing a human right and that'll do it.
How would that right read? Maybe “Every Canadian has the right to housing in the desirable neighborhoods of Toronto”? I’m not sure if that is really feasible.
We're sliding towards workhouses of the 1800s. Policy should lean towards a one bedroom apartment being achievable for all of the working class.
“Every Canadian has a right to negotiate to rent or buy housing in any neighbourhood in Canada”
“Every Canadian has the right to build as much housing as they want in any neighborhood in Canada.”
More pithily, if we want housing to be a human right, then building housing also has to be a human right, one that cannot be vetoed away because your neighbours don’t like it.
Ofc not everyone gets what they want, and not everyone can live in Shaughnessy or Mount Royal. But it does not follow from this that it makes sense to ban all forms of buildings except houses, like we do now, on most land in all cities in North America.
Less glibly, just by cutting regulations I’m sure you could get affordable housing in a place like Toronto, but wow the people who think housing is a human right would howl and scream about 10m^2 apartment high rises.
I got the 10m^2 number from the size of some Tokyo apartments. The average apartment size in Toronto, by contrast is ~60m^2.
This is because due to the scarcity of homes and that they cannot be manipulated or printed out of thin air and lent short on a computer, they have become tools of speculation, so the regulation is justified.
Fixing the problem involves building more so supply isn't an issue and accepting tha tin some areas housing is unfortunately just going to be pricier. Wish economic literacy was more widespread :/
My wife and I host an Airbnb just outside the city limits of Flagstaff. We have two houses on the property and live in one. Our listing makes it clear that we live on the property. Our neighbors never complain. There is an Airbnb two doors down that regularly generates complaints due to a remote owner.
1. Why are short-term rental units so popular with the renters? Why has the traditional market in this space fallen off and what can they do to adjust to new expectations by consumers.
2. Why are short-term rental units so popular with the owners? In the Toronto area for example I've heard from several unit owners that they would rather lose money than rent in the trad manner due to how far the rental laws have swung that makes evictions nearly impossible.
3. Specifically here in Canada these sorts of conversations always feel like a smoke screen or a way to find a useful idiot to get the masses angry with rather than addressing the core problem. In Canada our core issue is immigration policies that over the last 2 decades haven't been linked in anyway with capacity of housing, schools, healthcare etc.
2. More revenue. A STR might go for $200/night. So 10-15 nights to clear the same as a monthly lease.
Plus the legal difficulty dealing with a bad tenant, as you note.
They are in the business of asset appreciation, and a short term rental is a twofer: you increase the housing shortage by removing a unit from the market, while maintaining an revenue stream to offset the cost of depreciation.
The business model is completely built on rent seeking and would collapse rapidly if it was just legal to let housing supply meet demand.
Instead, there are no voters in the jurisdiction to change the laws, because the vast majority of the electorate all gains from the rent seeking behavior.
The people who suffer are the minority who literally were not alive when the housing shortage began.
Then we can let the short/long term rental market sort itself out and also allow people to invest in real estate at a reasonable rate.
Short-term rentals jacking up prices are a problem for that country and many others, and I was contributing to the problem, but it was important for me to go and AFAIK there aren’t other options.
I wouldn’t have minded staying in the country longer but the visa and my contract don’t work that way.
EDIT: I also looked at hotels. I would’ve been fine with a half-decent hotel room that had a kitchen, but all hotels I saw were more expensive than the rental.
My wife has a Walmart grocery pickup order we’ll grab when we get there. We’ll eat good food and not break the bank.
Also, although we looked, there’s no obvious “third space” we could meet at and hang out for 8 hours or so. The Airbnb is the best value hands down. We get to live in another city for two days.
I would caution anyone with a sweet, sweet mortgage rate looking to trade up their personal residence and hold onto the original as an STR to do the math before going down that route.
But it turns out that 50-60% of people in these locations are renters. And about a half of them are overburdened (more than 30% of income goes to rent).
The reality is that the short-term rentals expose dirt-poor communities to people with higher incomes. And the way to fix this is NOT to ban higher incomes from moving into low-income communities. Quite the opposite. We need to make more opportunities in these kinds of communities.
Promote remote work, give tax breaks to companies that want to build offices in these areas, etc.