With the sad result of contributing to rent inflating well beyond peoples' means. We are in the midst of a pretty grim housing crisis. Almost 70k homeless in LA. This doesn't make anyone involved a bad person, but we must recognize how this company has contributed to a structural crisis. Can't say I know the solution myself, but.
Housing in LA/SF is not expensive because of Airbnb or “evil Chinese investors” or any other random boogieman the media is trying to scare you about.
I’d put them near the bottom of the list of “things that make housing expensive.”
At peak, there was about 20-40k listings in greater Los Angeles on Airbnb.
There’s roughly 19 million people in greater LA. Average household size in the US is 2.6 ppl. Let’s round up to 3 and be generous.
That means there’s roughly 6.3 million households in greater LA. Even if 100% of those Airbnb’s are suitable as full time residences (its probably more like 30%), the 20-40k units wouldn’t even cover a single year of newcomers to greater LA (yes, the core is shrinking but the greater metro is growing).
The main (key word) reason housing is expensive is due to geographic and local government restrictions on zoning and development which chokes off supply relative to the number of people who want to live there. Not some silly web app for millennial travelers.
I really appreciate the use of math here for a sense of scale. That said, this analysis overlooks the relationship between supply and demand on price and availability. Because housing is relatively supply inelastic a small increase in demand can drive large increases in prices.
That said I think it is a valid point that the current housing shortages in the US are caused by bigger forces than 100 billion dollar company. Long term policy initiatives at the local, state and federal level have all contributed to the skyrocketing cost of housing, and these should really be higher priority than hotel zoning reform.
Thank you. Anyone who looks at the numbers can see that AirBnb is not affecting housing availability in any meaningful way.
There are about 6 times more permanently vacant units in SF than the peak number of AirBnb, and the amount of construction that has been blocked during discretionary review (met the zoning requirements, people complained about parking) since AirBnb's existence far exceeds the AirBnb units too.
(I am in favor of vacancy taxes, a house being used, even by a short-term renter, is better than the blight caused by properties sitting empty)
A corollary to this: a stock price can double with only a relatively small number of shares changing hands, proportional to the total number of existing shares.
Comparing the number of Airbnb units to the number of housing units citywide can lead to the wrong implication, even if that percentage is low.
Certainly it would, temporarily. Like placing a large buy order on a stock. But prices would quickly normalize since it would be a one time thing. Supply would quickly tighten up again and prices would resume the march upward.
And even the short term downward price pressure wouldn’t affect prices by much. We’re not talking the 50%+ drops that would be needed to make housing in the area “affordable” relative to incomes—-as it was for at least half of the last century.
Also important to remember, many of those Airbnb’s would not be legally zoned for permanent occupancy.
In addition, homelessness is mainly a result of mental health issues (not entirely, ok) - and not housing prices.
And many homeless come to LA and SF from other areas that are not as friendly to the homeless. Which is why there are a lot less in Dallas suburbs than downtown LA.
You are pretty reductive in your description of homeless people. Sure, some people end up in that situation because of mental illness or move to these areas after already becoming homeless, but that is not the majority of homeless people.
>L.A.H.S.A.’s 2019 homeless count found that 64 percent of the 58,936 Los Angeles County residents experiencing homelessness had lived in the city for more than 10 years. Less than a fifth (18 percent) said they had lived out of state before becoming homeless.
>More than half of the people surveyed in Los Angeles cited economic hardship as the primary reason that they fell into homelessness.
