If someone can't find a house because there are short-term rental properties, the solution isn't to force someone to give up their STR, it's to build another house.
I absolutely recognize that short-term rentals have other undesirable effects on a neighborhood or building: noise, constant random strangers in the building/area, etc. I think those are reasonable reasons for banning or restricting STRs, but "housing shortage" is not among them. If you have a housing shortage, the solution is to build more housing, full stop.
We would need 'China style' decisions - which ended up with building so many apartments, that they end up with a significant percentage of them being empty, and the ripples of those decision will crush their economy for the years to come.
The music has stopped. It will take some time, but the outcome is almost inevitable.
Competitive markets in general are pretty good at matching supply and demand, even when demand is pretty all over the place.
Cars are a great example in the US — sure, there are times when prices go haywire from supply shocks (e.g., due to chip shortages in the pandemic), but outside those no one really complains about a “car crisis”. There are new and used cars available at very many price points, old vehicles get retired and new ones are manufactured, etc.
In housing, one major reason we don’t “just build more” is precisely because of regulation that either prevents housing construction outright or makes it very expensive, nominally in the public interest. We don’t need state owned enterprises paid to construct vacant apartments — we have plenty of companies and individuals willing to build, we just need to let them.
Your example perfectly supports that!
Central planning is kind of where we are now already — transportation options are severely restricted, transit costs are subsidized in some areas for some people but not others, etc.
Competitive markets in general are pretty good at matching supply and demand, even when demand is pretty all over the place.
Housing is a great example in the US — sure, there are times when prices go haywire from supply shocks (e.g., due to mortgage bubbles or material shortages in the pandemic), but outside those no one really complains about a “housing crisis”. There are new and used houses available at very many price points, old buildings get retired and new ones are manufactured, etc.
In transportation, one major reason we don’t “just build more” is precisely because of regulation that either prevents rail construction outright or makes it very expensive, nominally in the public interest. We don’t need state owned enterprises paid to construct unused trains — we have plenty of companies and individuals willing to build, we just need to let them.
In Spain, there was high demand for property prior to 2008. In areas in the UK, there was high demand for property across most of the country. Then credit became harder to get after the GFC, and suddenly the demand just wasn't there. In Spain, property prices in many area more than halved within a year. What happened? Suddenly everyone moved out? No, the demand was just demand from a different source.
Actual house price increases outstripped rent increases by multiples, but suddenly all of that demand to own just disappeared when the credit driven boom went bust (not everywhere).
There is often more to it that just build more.
The base demand for housing compared to supply in the UK is that much worse.
We have a housing crisis because restrictive zoning codes prevent housing density from rising to meet demand. The market is not being allowed to work properly, and has not been for decades now in many places, so we have accumulated a huge backlog of unmet demand.
It's a very good business. In many developed countries, there are very strong incentives for owning several properties. Once you've reached a certain level of wealth, it's basically free for your - since you're buying it with a mortgage. And quite often you can deduce the interest paid, from your taxes. We are effectively subsidizing this behavior, instead of taxing it.
Simplifying a bit - you want to put 100k$ to work, and you are wealthy enough so that the bank will lend you whatever you want. A great business is to buy another home, for say 500k$ - the rent and tax deductions will cover your mortgage, so you effectively turn 100k$ to 500k$ over the span of the loan. It's basically using your leverage, which first time buyers simply cannot most of the time. It's an unfair game.
In short - the system should be set up in a way that owning a second home should not be a good financial decisions - it should be an expensive decision. If you're rich enough and want to own a second holiday home - no problem. But in the current state of affairs, it's not expensive - it's actually profitable to do that.
Anyway, short-term rentals are basically a symptom of making it hard to build hotels. Most of the time staying at a hotel is much more comfortable than staying at an airbnb.
Sometimes! If I'm staying in a place for more than just a few days, I want a full kitchen. That's pretty rare to find in a hotel. Even small efficiency kitchens are pretty rare. And in most markets I can rent an Airbnb with a full kitchen for much cheaper than a hotel room with any kind of kitchen.
Beyond that, I generally prefer the Airbnb experience over that of a hotel. I know I don't speak for everyone there, but I think there are quite a few people with my preferences.
Is that possibly because it is so hard to build hotels, though?
It's trivially easy to see that this isn't true: you probably don't live in a hotel (or a structure resembling one), for example. Why not? The answers to that question generalize to travel.
Hence why most Western countries have jacked up interest rates, and will have to keep them quite high for the next several years.
1. THERE IS A LABOR SHORTAGE IN CONSTRUCTION
2. ZONING WILL NEVER BE REFORMED AT THE LOCAL LEVEL
3. EVERYONE ASSUMES THE PRICE OF HOUSING WILL CONTINUE TO GROW MORE THAN INFLATION
All 3 highlight a broken market due to inflated costs. The only solution is to slow the market down and play chicken with owners.
> pulling the ladder up and further securing the position of those who got there first
Such is life. You can't drastically change a market overnight. You'll get voted out of office.
Welcome to the late 70s. This is how it was then too. Be happy we don't have a Volcker
We've done it once before (World War 2 - in that case it was even retroactive, so you couldn't hike rents in anticipation), and it increased homeownership rate by the highest rate in the 20th century (something like 5% jump in a few years) by making leasing less profitable than selling.
Would also have to be combined with more building, but it does work. If you make investing in real estate less appealing (via rent control), people will sell - unless they're just hiding money (i.e. overseas investors).
You would probably have to go on a crusade in order to promote it, and it would require a massive anti-landowner propaganda push (of the sort that existed during WWII), but it's theoretically doable.
> it's theoretically doable
So is a constitutional amendment banning sloppy blowjobs but that is completely unrealistic.
Jesus HN has gotten dumb.
[0] - https://openscholarship.wustl.edu/cgi/viewcontent.cgi?articl...
I mean that’s the theory, right? It’s never been truly tried?
I would even tie some portion of primary home property tax to the density of people living on a lot.
One avenue is stronger property rights. Don't let local governments and randos have an opportunity to make demands or issue denials.
It took me nearly four years to get approvals and permits to repair an existing home in California. Building a new one seems impossible.
"New York University economics Professor Edward Wolff, a specialist in real estate statistics, said 4.48 percent of American households owned three or more residential properties in 1998, compared with fewer than 1 percent in the early '90s."
I wonder what that number is today...
I strongly believe, that we should help people buy their first home and increasingly tax the second, third etc. In several developed countries, it's very lucrative for rich / upper middle class people to use their credit capability to just buy another house and rent it out - with tax incentives and deduction, it basically pays for itself over time. While the young renter who is living in it, do not have this possibility.