Thank you so much for sharing this post. I admit that I'm a bit dismayed that so many of the top comments on this thread (on a website that's all about sharing ideas re: technology startups, no less) are basically just a gripe session.
Virtually everything I've heard from people who have actual, personal interactions with the AirBnB founders is positive, and especially that their interactions were inspiring - that is, the AirBnB founders inspired people around them to do better work. I just think that's an amazing quality and something I'm so grateful for when I find it.
Sure, I may have my own gripes about AirBnB, but I can certainly appreciate the unique combination of talent in the founders that made their success possible.
Hang on, isn't it simply: "the AirBnB founders were great entrepreneurs" vs "yes but look at what the actual impact of AirBnB has been"?
It's fine to acknowledge they are remarkable people, but it's also ok to say that the success of AirBnB has had huge negative consequences for many people. And it's hard to see how the former can outweigh the latter.
Short term rentals being more profitable than actual homes for people, this means that (i) rents, already a grueling expense for many people, are pushed up, the consequences being (ii) people either cough up and become even poorer, or more likely move away from the city centres and spend time and money commuting, meaning (iii) popular destinations become hollow theme parks for tourists, while actual residents are shafted in every possible way.
In short, in a city like Lisbon, good luck being a student for example. Pay upwards of 500$/mo (or for perspective, 75% monthly minimum wage) for a room in a shared house, or live a 1h30 commute away from campus.
> in a city like Lisbon, good luck being a student for example. Pay upwards of 500$/mo (or for perspective, 75% monthly minimum wage) for a room in a shared house
Data point: around 25 years ago, I was paying GBP225/month - so that's ~USD300 - for a (tiny!) bedroom in a shared house in Cambridge, UK.
I'm not sure what approach one would best use to adjust for 25 years of house price and/or general inflation, but isn't that in the same ballpark as your '$500' in Libson now?
FWIW, we thought housing was expensive back then, too.
I understand that you're talking about postgraduate studies. I was thinking more about undergrad: where the parents are expected to pay for their kids studies.
Tuition is already 80€ per month, and even that is waived if you come from a low-income family. But how is someone earning 600€/mo supposed to send someone to college when rooms cost at the very least 350-400€/mo? Plus living expenses, 150€ the bare minimum. Even if you apply for financial aid (which you will get) the amount is woefully inadequate to face this rising costs. The result is that poor families cannot send their kids to uni. That's not democracy, freedom, or equality.
Also those 225£, what fraction is that of the minimum/median household income?
225 GBP wasn't 75% of the 700-800GBP minimum wage at that time. And ignoring completely inflation to help your point.
Students are broke, but parents can help, and if your "room" costs half of one your parents wage, that help is less likely to happen. Or make the poorer even poorer.
That situation is totally different if your room costs a quarter of one of your parents wage.
> 225 GBP wasn't 75% of the 700-800GBP minimum wage at that time
Q: Do "minimum wage" rules apply 1) in theory, 2) in practice to postgraduate students?
Yet more [ancient] data: UK science research council funding for PhD students in the late 1990s was nothing to get excited about; I have an old bank statement here, BBSRC paid me the princely sum of £1377 on 1 July 1998, and by the way, that was for that quarter not for a month.
> Students are broke, but parents can help
Q: Do we really think postgraduate students should expect their parents to still be funding them?
> Q: Do "minimum wage" rules apply 1) in theory, 2) in practice to postgraduate students?
If you have to find a part-time to pay some of your expenses yes. In that case a part-time in Lisbon will pay you slightly more than half of your room and in "your case" it would pay the whole room. It's a BIG difference if you have to go down that road.
> Yet more [ancient] data: UK science research council funding for PhD students in the late 1990s was nothing to get excited about; I have an old bank statement here, BBSRC paid me the princely sum of £1377 on 1 July 1998, and by the way, that was for that quarter not for a month.
I do agree that post-grads are very badly paid. But that's another issue.
> Q: Do we really think postgraduate students should expect their parents to still be funding them?
Not really, but if there's an emergency I think parents will not let their kids starve.
And this hackernews rhetoric of 'if I suffered everyone has to suffer as well' needs to end. That's not how you move forward.
> but if there's an emergency I think parents will not let their kids starve.
Subject to ability to do so. I knew many grad students who took part time jobs to send money in the other direction. Their earning power was greater than their family's.
> BBSRC paid me the princely sum of £1377 on 1 July 1998, and by the way, that was for that quarter
> £225 per month
Apparently, yes. We do expect parents to still be funding postgraduate students if they don’t want them to starve. £702 pounds per quarter seems kind of hard to live on. That’s like £8 a day to pay for everything except rent.
16 years ago I paid £270/month to live in a sharehouse in Bristol (not generally as expensive a place to live in as Cambridge) in a boiler cupboard that had been converted to a bedroom.
So I've heard this argument before, but I'm not sure I entirely get it. Wouldn't people coming to Lisbon just stay somewhere else if short-term rentals didn't exist - like a hotel that is likely owned by a massive corporation? How would that be better?
I guess that way I look at it is that people want to visit cities for a variety of reasons. Those people need to stay somewhere. Wherever they stay will take up space, thus driving up rents through land scarcity. I am not really sure how people staying in someone's apartment is much worse than staying in a hotel.
If rents are going up, it's because there is more demand than supply. Unless Airbnb is actually increasing demand (perhaps?), I don't see how it is really affecting this equation.
Of course they are increasing demand by being cheaper (because they can ignore fire safety regulations and a ton of others that hotels have to follow, therefore having an unfair advantage).
They are increasing demand in the same way more and bigger roads do not reduce but instead increase traffic. This paradox is well-known among city planners (but often ignored by those who make the decisions because it is counterintuitive).
In addition to that they can ignore zoning laws and therefore move rent prices up in areas where hotels are not allowed to be.
> Of course they are increasing demand by being cheaper (because they can ignore fire safety regulations and a ton of others that hotels have to follow, therefore having an unfair advantage).
This seems like a regulatory arbitrage that shouldn't exist to begin with. Why should the fire safety regulations for a hotel be dramatically different in expense than the ones for the equivalent apartment complex?
> They are increasing demand in the same way more and bigger roads do not reduce but instead increase traffic.
People consistently get this wrong. Bigger roads don't increase traffic. Congestion suppresses traffic. If there is a congested two lane road because it's carrying traffic that would require a four lane road, so then you build a four lane road, you then discover that the four lane road is still congested. Because once you remove some of the congestion, the demand it had been suppressing comes back and you still don't have enough capacity.
The distinction is important because there is a point at which you actually have enough road capacity to satisfy the demand that exists when it isn't being suppressed by traffic congestion. It's just more than you might have expected based on the amount of traffic observed when the road was congested.
> In addition to that they can ignore zoning laws and therefore move rent prices up in areas where hotels are not allowed to be.
The solution to which is to eliminate restrictive zoning like that, so that supply can respond to demand.
The primary reason that short-term rentals are zoned differently is local regulatory capture by hotels to limit competition and keep prices high. Without restrictive zoning, short-term rentals don't have to come at the expense of long-term housing because you can build more housing and have both.
The idea that if 4 lanes are not enough we just have to add more lanes, ad infinitum, until we eventually hit the upper limit were traffic won't increase anymore, has, to my knowledge, no empirical foundation.
Current knowledge says that "on average, a 10 percent increase in lane miles induces an immediate 4 percent increase in vehicle miles traveled, which climbs to 10 percent – the entire new capacity – in a few years." https://en.wikipedia.org/wiki/Induced_demand
> Current knowledge says that "on average, a 10 percent increase in lane miles induces an immediate 4 percent increase in vehicle miles traveled, which climbs to 10 percent – the entire new capacity – in a few years."
There is an obvious confounder here, which is that anywhere they add lane capacity is going to be a place undergoing growth, which is why they felt the need to add lane capacity. But if the growth the continues, the new lane capacity once again becomes insufficient at some future point.
I would expect to see the same pattern with electrical transmission capacity. Where they add more capacity, you then see an increase in consumption. Which is to be expected, because why else would they add the capacity?
The difference with roads is that they don't catch fire if you want until after you're over-capacity before expanding them, which makes it more likely that the demand will consume all of the new capacity, since you're starting off from the point of already being underwater.
On the other hand, taking existing empirical data and extrapolating linearly from it seems like a bad idea in this case. There are obvious limits to how much latent demand is there. IIRC, we never did a proper experiment of suddenly e.g. quintupling the capacity of some major congested road.
That said, I think the source of this paradox is ultimately not in the road one is thinking of expanding, but in all the connections between it and other roads. It buys you little to turn one lane into five if all the exits are still the same capacity.
While there obviously has to be an upper limit somewhere, this isn't (only) about latent demand, but induced demand: People actually drive more because they have to. More lanes have more consequences than wider streets alone, they enable sprawl, funnel funding away from other transport options etc. That has consequences for the housing market, average distances between work and home etc.
Your second point is very important though, and IIRC is the main reason why so many city planners are so critical of the boring company idea of underground car tunnels: It tries to solve an aspect of traffic that isn't the problem.
> People actually drive more because they have to. More lanes have more consequences than wider streets alone, they enable sprawl, funnel funding away from other transport options etc. That has consequences for the housing market, average distances between work and home etc.
You're really just saying the same thing as I did -- congestion suppresses demand.
Suppose you have an uncongested two lane road. Making that a four lane road is not going to induce anything, because the widened road has more capacity than the original one, but you weren't even using the full capacity of the original one. It doesn't encourage anyone to do anything they hadn't already been able to.
The reason it "enables sprawl" is that if the original road was congested, people wouldn't want to travel it to commute, so buying a house in the suburbs and commuting via that road is suppressed. Congestion suppresses demand. If you reduce the congestion by widening the road, some of the demand comes back. And notice that the same thing happens if you alleviate congestion in some other way -- if you somehow make it more attractive to take the subway and then more people do, there is less traffic on the roads and it becomes more attractive to drive.
But you don't actually want the congestion. Traffic congestion sucks. You want to get rid of it somehow.
Part of the solution could be expanding the road, but you could have to expand the road a lot to satisfy all of the demand that would exist with uncongested roads, if you want to use that as the only solution. Which is why you shouldn't. There are other things that reduce congestion.
Like building higher density housing, so that more people can live closer to where they work and have a shorter commute, which in turn makes mass transit more viable. Then that in combination with widening some roads relieves the congestion.
The real problem here is the politics of it. Increasing the housing stock sufficiently to satisfy the demand would tend to reduce housing costs, which existing property owners don't want. So they fight high density construction with restrictive zoning rules and then the high cost and low supply of housing in the city pushes people into the suburbs, which increases the demand for roads.
I have market knowledge in this sector and can confirm the impact. Once the pandemic hit, Airbnb's from private landlords flooded the market due to travel nosediving.
> Wouldn't people coming to Lisbon just stay somewhere else
No. They just wouldn't come. AirBnb and discounter-airlines has turned the tourism industry upside down.
Now, I do believe, that it's NOT AirBnb "fault" - AirBnb just accelerates the inevitable (like most technologies do) but the impact is still huge.
I have friends who live in Lisbon and Barcelona and from their eyes: tourism, that used to be a profitable "fancy" industry - with middle class people bringing their money to spend it - has turned into something different. These days "tourists" can be a group of 12 football fans, who've spent £18 on a RyanAir ticket and all stay in the same Airbnb room (as a group), getting drunk and vomiting on the streets.
I'm not saying that's definitely a bad thing (everyone deserves the right to experience travel) I'm just saying I can relate to (many) EU cities opposing this, claiming they're not getting any value from these crowds.
Without AirBnB you would need to convert a house into a hotel in order to use residential real estate to tap into hotel demand. And regulations typically make that hard and expensive. Plus you would need to do some construction work, which also adds to the expense.
So strong hotel demand certainly does push up land value overall over time, but it happens much more slowly and to a lesser extent than with AirBnB.
AirBnB gives investors a way around hotel regulations and construction costs. You can buy an existing house and with very little friction or cost start generating revenue from tourism demand.
Lack of affordable housing in Lisbon is not some private company in America's fault, it's Lisbon's government's fault. That's like blaming the tech industry for housing shortages in San Francisco.
Some people like myself (eg. digital nomads) prefer short term rentals, and AirBnB has changed our lives.
Yeah, of course it comes with some benefits of added convenience & simplicity. But this is a narrow minded point of view in my opinion.
Digital nomads building some pointless SaaS products with inflated egos working remotely in far flung places of the globe, getting to sample the delights of the worlds great capital cities are not an important consideration in the impact of AirBnB globally.
The ability to live a lifestyle like that already comes with so much opportunity and privilege which is either denied or impossible for so many people.
And so when AirBnB ravages communities by driving prices up and forcing people out through their carefree regard for local rules and regulations, then yes, I would say that part of the problem also lies with AirBnB, unless you simply believe that any company should be able to bulldoze whatever comes in its path with zero repercussions?
There is a reason that cities like Lisbon are desirable to visit and spend time in. It's not because its increasingly filled with tech-nerds who talk about "Ramen profitability" and play on slides in offices at lunchtime. Its because of the rich history of the place and the communities + people which make it up. And much like gentrification has done, this easy carefree tourism dilutes that and risks turning everything into more of the same playgrounds of the world.
> Digital nomads building some pointless SaaS products with inflated egos
Look we get it, you hate digital nomads and SaaS products. I couldn't really care less, and that has nothing to do with anything I said, which is that local governments are responsible for their citizens. Whether it's AirBnB or Craigslist or Couchsurfing or some other website, there will always be a demand for people to find housing and to rent out spare housing. Villainify digital nomads or AirBnB, that's never going to solve the problem. (though part of me thinks you're more interested in venting about how much you hate "digital nomads" then actually thinking about the problem of affordable housing and what would could realistically be done to fix it).
I don't really hate digital nomads, it was a deliberately flippant response to your comment in which I felt you expected the whole world to be your personal playground.
I don't think it's really useful to put the blame squarely on the local government in Lisbon for example, sure perhaps they should take a share of it, but that doesn't exonerate exonerate Airbnb - far from it in fact. We're not "villainifying" Airbnb with baseless accusations - I've seen you comment elsewhere that if it wasn't Airbnb it would be some other company, that is terrible way to justify things.
I do believe we should villainify them for circumventing and bending local laws (especially in a country which is in a different continent to where Airbnb is based...) to their advantage and to the detriment of the cities they're "disrupting". Just because something is not technically illegal or you can get away with it doesn't mean it's justified.
I don't hate Airbnb either, though I am inherently distrustful of fast growing, power hungry & greedy "tech" companies and in fact have personally had positive experiences with it. I just don't think its as black & white as you're suggesting. Airbnb should be (and thankfully is) being held accountable for the damage its wreaked around the world. Local laws & regulations were perhaps not well enough equipped to deal with this new kind of tech behemoth and have been slow to adapt, but Airbnb didn't have to play the bad guy in violating zoning & short term stay regulations that the rest of the hospitality industry have to follow. But they did... knowingly.
Someone else made the point that Airbnb was kind of like Trump, exposing & exploiting the existing weaknesses in a system to their own personal advantage. We don't point the finger squarely at the the system, yes it clearly failed under Trump and he is in some way just a symptom of more fundamental problems. But it doesn't let him off the hook. Neither should it for Airbnb
Of course the aims of any private company are to maximise profits through whatever means necessary. That's just the world we live in unfortunately. But even if we accept that as a fact of life, it doesn't mean that on an ethical & moral level we should overlook the harm caused.
> Some people like myself (eg. digital nomads) prefer short term rentals, and AirBnB has changed our lives.
Good for you but AirBnB has a proven impact in increasing rent prices for long-term rentals in any touristic city, be it Barcelona, Lisbon, Amsterdam, lots of cities in Europe have suffered from AirBnBs pushing units out of the long-term rental market and being available for people like you. And people like you aren't the majority of the inhabitants of a city, when people that are born and raised in a city are pushed out by pricing due to 10+% of the stock of possible rental units being used as short-term just so landlords can make a bigger buck it's sad and inhumane.
Great that from your perspective it's helped you, it's definitely impacted the lives of a lot of young people that were born in the cities you like to live, AirBnBs are eroding exactly what made them attractive: a good city neighbourhood.
So tell your local government then to pass laws that make short-term rentals via AirBnB illegal, or to increase taxes on rental properties, or to build more housing, etc.
People in the comments are acting like AirBnB is some villain, when in reality it's just a website that facilitates supply and demand of housing. If not AirBnB, it will be some other site (eg. many AirBnB listings are on other websites as well). So long as that market exists, platforms will come up to cater to those needs.
Everybody loves a good villain. But really the problem and solution are not as simple as AirBnB = bad. You guys sound like taxi drivers bashing Uber/Lyft.
Sure, if it was that simple I believe it would have been solved already. Ignoring the whole political and social aspects of a complex problem is hand-waving a lot, there are different pressures to be considered, different avenues of solutions and even more with housing that is: expensive and has a long turnaround from permit -> completion.
But sure, tell every single young person that the solution for them on the next 5 years is to sit down and demand more housing built. What do people do while that's happening? Allow AirBnB to extract money and rent-seekers to gouge prices for the population?
The real world is dictated by supply and demand. When demand is high and supply is low, prices rise as competition pushes them up. The increase in housing prices is a huge incentive for developers to build new housing. And it also increases the capital necessary to build more housing. Obviously the political situation will need to allows for new housing. Otherwise prices will just continue to increase.
No, the real world is affected by supply and demand, not dictated by it. The real world is dictated by a complex network of social and political pressures, each trying to achieve their own agenda, finding the balance in this environment in how to minimise damages while maximising benefits is the game that any government and, to a lesser extent, corporations try to play.
Believing that the world is dictated by a reductionist model of supply-and-demand is either myopic or ignorant, the world doesn't work like that, that is a model that works well for a diverse set of markets, not all and not at all if you start to include the social aspects into it.
You can't just start building anywhere and anything, that will kill cities, it's a shallow analysis of a broader scope of issues such as: maintaining livable conditions (as defined by the society and culture of that city, not by some metric of "available units per inhabitant"), maintaining harmony of urban planning, maintaining the cityscape, and so on. Devising the master plan for building is exactly the kind of aspect that a simplified worldview of pure supply-and-demand does not take into account, it's simplistic and unempathetic.
Prices will continue to increase if building new units doesn't take place. AirBnB and greedy landlords shouldn't have the power to increase this damage for short-term profits. And worse: doing that in a rent-seeking way, with little to no benefit to the society of that city apart from some tourism money and "digital nomads" income passing by, rent-seeking behaviour is disgusting, it's pure extraction by virtue of you accumulating enough capital to be able to own a piece of land, that's all, there's no productivity increase for society through this form of extractivism.
I don't think you understand what "rent seeking" actually means.
The NIMBY'ism of preventing new housing is the very definition of rent seeking. By legally locking in, the existing owners prevent others from entering the market due to artificially constrained supply. Airbnb doesn't create the demand; they are just a marketplace and one of many.
"Rent seeking (or rent-seeking) is an economic concept that occurs when an entity seeks to gain added wealth without any reciprocal contribution of productivity."
What contribution to productivity do corporations or people who have enough spare cash to buy available land provide to a society?
AirBnB can be just a marketplace, that doesn't mean it isn't damaging to society at large. Excluding the moral aspects of that is an ideology based on capitalism, it doesn't mean it's right.
Then why is that not happening? When your theory postulates some conclusions and those conclusions don't verify, then your theory is wrong? At least that's how it works in every science.
Is the Lisbon political situation allowing new construction? It's the political situation in the Bay Area (California) that's keeping prices high by not allowing new construction.
It's the same reason developer salaries are high. Demand is high and supply is (currently) low. My company is struggling to find people to hire right now and are offering cash incentives.
Perhaps it would be good for you to be aware of how crushingly privileged and tone-deaf this comment sounds. Arrogant even. Good for you that you get to travel the world with a laptop in your backpack, typing away lines of code for some inane web company for luxurious pay, all the while taking in the sights and culture of dozens of amazing places. That is a privileged lifestyle only a fraction of people can enjoy. Excuse me if the people whose lives are dramatically impacted by this economic squeezing don't give a damn that "you quite prefer short-term rentals".
You don't get to evade responsibility for the your actions and the consequences of your lifestyle, while advertising "worker rights" and "anti-poverty" in your bio.
Ironic how the keyboard warriors who accuse others of being "arrogant" tend to themselves come off as the most arrogant.
Again if you actually read my comment, the point is that governments are responsible AND the only entity capable of fixing affordable housing problems.
But sure feel free to villainify AirBnB and AirBnB guests/hosts if that makes you feel better. I was living off AirBnB and short-term rentals in NYC/SF too, I guess that means it's my fault that NYC/SF has expensive housing? Lol ok.
You should actually write a bio so I can anonymously insult your existence from the comfort of my keyboard. /s
Airbnb, backed by VC money, were willing to enable the breaking of local laws on a mass scale. These laws, about the standards that bed and breakfasts and other short term lets must meet (things like meeting fire and health and safety regulations) and also limiting the number of short term lets in an area to retain actual, functional cities people can afford to live in rather than tourist traps were and are intentionally bypassed by the Airbnb founders and their funders as part of their business plan. Airbnbs, contrary to the "ooh its helping people meet their rent" narrative pushed by PG are often owned by rich multiple property owning rentiers who are profiting off rich tourists by driving out poorer people who would like to actually live in these areas. Airbnb is a blight in cities all over the world.
It sounds like what you actually mean is that there is not enough housing supply to meet the demand. Demand which has been augmented by AirBnB. This is a zoning and infrastructure problem, and it was not created by them, nor can it be fixed by them.
No it was created by them because they ignore those zoning laws and are willing to go to court to fight attempts to enforce them against their clientele. Finding a creative way to help people break laws with little chance of their being any consequences for yourself because you are a) in another jurisdiction and b) backed by billionaires like PG who believe they have a divine right to "disrupt" societies against the wishes of the people who live in them in the name if profit, is not something to be applauded. There is nothing "natural" about the creation of demand by Airbnb and it has brought little but misery to the poorest members of society while enriching those at the top.
There's indeed not enough housing supply to meet the total demand. There are various reasons for that, but that's the ground state. What AirBnB does is add to this an incentive for existing supply to further shift from serving city residents to serving tourists. Since housing supply isn't limited by low demand but by external and difficult to change factors, what AirBnB does is just making a bad situation much worse for cities worldwide.
Not really, land is fixed, you cannot create more land out of nothing. It is not yet another startup that can be created because VS has a lot of money because many government all over the World think that printing money (named nicely QE) is a good idea.
The core problem is the same as with Uber: they are playing on a field where other players have to play by strict rules (just think about what regulations apply to a hotel, for example), but they do not.
In other words, it all started as an opportunity for private people sharing their rooms, now there are more and more businesses operating in this space, reaping all the benefits, but giving nothing back in return, paying no taxes, ignoring all safety measures etc. Give people the opportunity to abuse the system, and abuse they will.
Local rental prices skyrocketing is one side-effect, destroying the neighbourhood is another.
There are positives too, like I now have the opportunity to easily rent a room or flat with a kitchen so I can cook myself (with various food intolerances/allergies this is important), this would not have been possible - or would have been really expensive - in the pre-airbnb world.
I'm not sure what strict regulations cabs have to follow, but for safety I'll take an Uber over a cab any day.
The yellow cab industry might be tightly regulated, but It doesn't seem to benefit the consumers. Cabs suck, plain and simple. Even the worst uber I've personally had was far better than a cab
In general the yellow cab monopoly got smashed apart with a sledgehammer.
I agree with you about cabs in the US compared to ride hailing apps. But AirBnB is very different, and worse. The hotel industry is nothing like the cab industry. And residential real estate is nothing like roads.
Hotels face lots of regulation not only on how they operate (fire safety, egress, food safety, etc) but also where they can operate. AirBnB lets investors get around all these regulations and tap into tourism demand at a much lower cost.
1. They disrupted the hospitality industry, which used to be much more powerful than it is today, as it now weighs less in tourism numbers.
I don't necessarily think this is bad, disruption is often a sign of optimization.
2. Then there are markets where airbnbs have caused apartment buying and rental prices to go up much faster than what they should have, bringing millennials further away from home ownership. (not going to go into people getting evicted for landlords to open airbnbs, but deserves a quick mention)
This one is more tricky, as it is not strictly bad, but definitely not good. It tends to be good for some sectors of the economy (i.e. tourism, restauration, culture, etc.) As a whole(and in theory) it should drag -with some delays- the construction industry into building more housing units at a faster pace. Now, considering the economy as a whole was very good pre-pandemic and we were near full employment, construction companies likely had trouble finding more qualified workers to fulfill the demand. Government incentives were also either not present or not strong enough for new 'affordable' housing to be build in cities.
I know I went up fairly quickly over these issues, there is so much more going on, I strongly suggest reading/researching more about the various issues as there are definitely valuable startup ideas hiding in there.
Overall, I have no doubts the balance will be reached in the following decades:
(i)Regulations to limit the numbers of airbnbs, coupled with permits and taxes.
(ii)Strong government incentives to build more housing as I doubt people leave the cities for good following the pandemic, let alone remote working remaining the standard.
(iii)Airbnb modifying it's business model. i.e. keeping the actual airbnbs, but potentially acquiring hotel chains amongst other things.
"it should drag -with some delays- the construction industry into building more housing units at a faster pace".
But how? How can you build more apartments in Lisbon or Amsterdam, where every inch is already used? Houses can be build in more distant areas but this forces people to commute longer making their live much worst.
The demand gets higher, therefore a healthy market will move towards a supply/demand equilibrium.
There are creative ways to go around most problems, given the incentives are strong enough. i.e. we all live underground /s
On the other side, too much regulation can prove to be a strong disincentive. In this case I expect architecture or density requirements, amongst other things, in cities like Amsterdam to cool down the market, maybe a bit too much.
It's yet another contributing factor to people thinking that they need to own 10 properties as an investment while significant chunks of the population are forced into sleeping on the streets.
Of course it's not AirBnB's fault that there's no regulatory oversight on the hoarding of basic life necessities, and the original pitch ("couchsurfing but for money") clearly did not have that intent, but at this stage they're going to push back pretty hard against any restrictions on that kind of behaviour.
> people thinking that they need to own 10 properties as an investment
I wonder what would happen if housing were not an investment but construction would be legalized that turned housing into a commodity. Right now many attractive cities are often captured by home owners who collude against against new housing because that pushes prices down.
I hope the company that comes after Airbnb disrupts the construction industry, allowing cheap but high quality housing for everyone, and not just anywhere but in places of demand.
The big problem is that land value tends to fill any void created by lower construction costs. If buyers are willing to pay $100 for a home in a given location, then land will typically sell at 100 minus the cost of construction (and a small risk/profit premium). So even if you lower construction costs you’ll just increase what people are willing to pay for land.
That said, that kind of balancing takes time in practice, so if you did find a way to deliver a lot of housing at a much lower cost you could exploit the delay and build a lot of housing quickly, which would increase supply, which would lower what buyers are willing to pay. Basically you’d have to flood the market with so much cheap housing that buyers willingness to pay goes down.
I think a better approach to fighting high housing prices is to make more different cities and towns appealing places to live. There already is a ton of housing in this country but it’s in places where not many people want to live.
In many cities the choice for long term rentals is very narrow therefore expensive because most flats are AirBnBs for tourists. This has a detrimental effect on the locals. Pre-COVID that is.
Why not both? Just because you can, doesn't mean you should.
Airbnb being a company, and a company seeking profits over everything else, one could argue that it's not their job to care about how they affect people. Doesn't mean we can't criticize it for it.
We could go even further and say it's by criticizing Airbnb that we will push governments to regulate this new market.
Most cities have laws against individuals running unlicensed hotels out of their apartments. AirBnb chose to ignore those laws and encourage others to do so as well.
Yes, of course. That's part of the cycle. Democratically elected officials are not proactive, they respond to pressure. Calling out corporations that are acting irresponsibility creates enough pressure to have democratic governments act upon those corporations.
No, it's blaming AirBnB for making a bad situation much worse. Local governments worldwide may be inept at securing enough housing for people (perhaps because it turns out to be a hard problem), but it's not helpful to sabotage the allocation of whatever housing that was made available.
I live in Amsterdam where there’s a lot of AirBNB and I see and hear two big negative consequences: (1) rent and house prices have gone up because people can make more money with AirBNB than regular renters and houses being bought as investments. (2) I know some people in the center of Amsterdam that see (before the pandemic anyway) a lot of trash on the streets (discarded mattresses) from “homes” that are being AirBNB’ed. And lots of noise complaints as well.
Honestly I'm a bit shocked as well. It's in these kinds of threads that it comes out how out of touch a lot of people on HN are with the impacts of their money, and actions. Praising airbnb founders reads like praising Trump to me. Sure, successful in the literal most possible sense, but they have no idea all the harm they are inflicting on those who live different lives than them, in places and cultures they don't understand.
I agree with your comment and find it a shame you're being downvoted for expressing that opinion. I think people can't bear to have a mirror held up which exposes the naked & ugly truth.
We all have individual stories about the convenience of AirBnB when visiting a new city, but I feel a lot of us are unable to see the bigger picture beyond our own selfish need for slightly increased comfort levels. We either deliberately overlook or are blind to the damage AirBnB and similar tech companies have wreaked on society.
Flimsy, selfish delusions of grandeur from tech wankers who just want to print money in fastest way possible with total disregard for the destruction they cause along the way but don't worry, its "disruptive"! All to be lapped up and praised by people who were brainwashed into the Randian mode of thinking
I also find it quite amusing that some people come back with these replies of "you're just bitter" "jealous of the fact that they're rich and you're not!" just continuously beating everyone over the head with this idea that there's only one true way to measure success. As if, in questioning how that success was reached and the societal, ethical and moral issues it brings up are somehow not acceptable. I guess in pursuit of the American Dream no has no time for such trivial issues.
Trump is the worst example possible. He's failed everything since the plaza IIRC. He could've left his inheritance in an index fund and had 10x what he has now.
> the success of AirBnB has had huge negative consequences for many people. And it's hard to see how the former can outweigh the latter.
'Capitalist realism' has us trapped. Many seem to believe no alternatives are possible.
No wonder we have a global mental health crisis:
"Depression is the shadow side of entrepreneurial culture, what happens when magical voluntarism confronts limited opportunities. As psychologist Oliver James put it in his book The Selfish Capitalist, "in the entrepreneurial fantasy society," we are taught "that only the affluent are winners and that access to the top is open to anyone willing to work hard enough, regardless of their familial, ethnic or social background – if you do not succeed, there is only one person to blame." It's high time that the blame was placed elsewhere. We need to reverse the privatisation of stress and recognise that mental health is a political issue.
[...]
The radical therapist David Smail argues that Margaret Thatcher's view that there's no such thing as society, only individuals and their families, finds "an unacknowledged echo in almost all approaches to therapy". Therapies such as cognitive behaviour therapy combine a focus on early life with the self-help doctrine that individuals can become masters of their own destiny. The idea is "with the expert help of your therapist or counsellor, you can change the world you are in the last analysis responsible for, so that it no longer cause you distress" – Smail calls this view "magical voluntarism"." [1]
I think part of the critique here is that at a certain point you get big enough to where both positive and negative externalities created by your product become self evident, but often companies just settle on ignoring it unless they are called out to the point where they have to act. I feel like Airbnb hasn’t been proactive enough in addressing the negative issues created by their product at all.
For ex I’ve personally not heard anything much from Airbnb w.r.t impact on local real estate markets eg higher prices or low rental inventory. I’ve only heard them actively deny that they put pressure on real estate prices.
And they’ve only recently invested more in safety and have said they are trying to ban house parties after the shooting in Oakland last year when that has been a problem for years.
hn_throwaway_99, I don't think it's mere griping to point out that companies like AirBnB trampled the rights of others in the communities it serves, because they literally ran an an illegal hotel business. It is roughly analogous to my setting up tents on the sidewalk in front of your house and renting them to my "customers", or charging people to come to noisy parties right outside your front door. Maybe the AirBnB are incredible business people, but they crushed neighborhoods and competing businesses in an illegal and, to me, hideously unethical manner.
You don't own the sidewalk. If a foodcart pulled up and your office cafe started to lose money many would suggest they offer better products or prices.
Those noisey parties happen at my neighbours house all of the time. It's the price of living in a city.
That's why the GP used the example of tents and parties, and not selling food. You actually do own the sidewalk to some extent - there is a set of regulations in each city that tries to balance citizens' needs for beauty and comfort with the needs of healthy economic activity.
AirBnB - and Uber - just went and ignored these laws wholesale, essentially showing everyone a huge middle finger.
> Those noisey parties happen at my neighbours house all of the time. It's the price of living in a city.
So you talk to your neighbours and you come to an understanding. Since you have a long running relation with them (you live next door to each other) you can improve living conditions for both parties by communicating. If you have different party go-ers every week next door you can't do that.
Housing area's should primarily be liveable. They are not there to provide real estate for someone to speculate with or to rent out to party go'ers. Though I guess this might be a too socialist view for you in which case we'll probably never agree with each other.
A socialist or communist society kinda works a little differently at least in eastern europe. Depending on how close or connected you are to the party leadership you get an apartment you throw as many parties if anyone disagrees they get thrown in jail. If someone more important complains you get thrown in jail.
Your view sounds more republican. All of the home owners create a gated community with rules. Those who break the rules are kicked out.
That just seems like such a weak argument. People are really furious with Airbnb for violating zoning and hospitality regulations? Really? Did they also jaywalk on the way to their YC demo?
I think people are mad that the Airbnb founders are rich (fair, but there are a lot of rich people) and that they have arguably raised rents, though I'm not 100% convinced of that.
EDIT - There is some good data out there suggesting a correlation between airbnb activity and rent increasing. Still researching.
You seem to think I know why people are furious. I don’t know what is in other peoples’ minds. I’m just telling you how I look at things. I‘m already rich, but even when I wasn’t I was never motivated by envy or hatred of those who had more than I did.
As far zoning and hospitality regulations: it is scarcely exaggeration to say that a municipality can come close to ruining your life, and certainly your personal fortune, through whimsical application of them. Perhaps you live in a place where these things don’t matter, or, more likely, perhaps you’ve never been in business for yourself. I live in Seattle, where they will cheerfully shut down your business for weeks because you have an electrical outlet 6 inches too close to the wall.
I had similar feelings about a lot of top comments in here, and more generally about this place recently. I don’t know if it’s just an influx of users but things feel different these days.
It's true that a lot of the optimism around tech startups has waned over the past few years, and this trend has accelerated during 2020. Not just here on HN but in the U.S. more broadly.
I think a big piece of it is that current the crop of tech startups going public are largely unprofitable companies whose only "innovation" in many people's eyes has been skirting laws and foisting negative externalities on the broader public. These companies have also risen while the cities in which they are based (i.e. San Francisco) have deteriorated substantially.
All in all, the perception is that the current startup ecosystem isn't producing the same innovative, profitable companies that "lift all boats" the way it used to, and the increasing negativity and cynicism here likely reflects that.
Tech companies are no longer underdogs, and entrepreneurs are no longer plucky heroes. Our actions have consequences -- outsized ones, at this point -- and things feel different because they are different.
Given how many discussions revolve around the big tech companies here, it might just be a matter of more people souring on them. Unfortunately it's often easier for a company that dominates a market to use that leverage to squeeze out more revenue than it is for them to produce exciting innovations; something we're seeing play out a lot these days. I still see a lot of excited comments about companies I have little to no knowledge of, and have found some neat products through those discussions.
There's a bit of the echo chamber, too. I for one don't read enough positive posts, and yet it is these remembrances and positive feelings about the work so many of us do that makes it feel worth it. If HN was all positive, it wouldn't work, but it seems at its best (to me) when it is equal parts enthusiasm, optimism, and criticism.
I figured it was some kind of COVID effect. Also, tastes are probably changing just as many users get the hang of the previously popular house styles of commenting, so patience from more established, better read or experienced users is extra short.
I think it's that a lot of us are older and wiser now and having lived through 30 years of VC driven hyper capitalism now look around and see that actually it's made life significantly more insecure and just generally shittier for most people except billionaires and FAANG drones. Of course if you're a billionaire or FAANG drone you probably don't want to acknowledge this.
Virtually everything I've heard from people who have actual, personal interactions with the AirBnB founders is positive, and especially that their interactions were inspiring - that is, the AirBnB founders inspired people around them to do better work. I just think that's an amazing quality and something I'm so grateful for when I find it.
Sure, I may have my own gripes about AirBnB, but I can certainly appreciate the unique combination of talent in the founders that made their success possible.