
The two faces of Airbnb - nkurz
http://www.businessinsider.com/the-two-faces-of-airbnb-2015-10
======
orthoganol
> Here’s what’s wrong: an increasing amount of Airbnb’s commercial activity in
> cities like New York, San Francisco, and Los Angeles does not come from the
> listings of “regular people” who are merely renting out a spare room.

This is my problem with AirBnB. I know investment firms buying as much
property as they can to list on AirBnB. Every single rental I stayed in when
traveling around Asia was done by 'power users' or real estate companies with
scores of listing throughout the cities.

Unfortunately, that means in my experience the quality drops, no 'homey' feel,
and it negatively impacts the locals.

AirBnB should implement the rule that you only get to list 1 rental. That
would solve this problem, and allow them to stop lying to everyone about who
is actually renting on their platform.

~~~
mgkimsal
Agreed. Small sample size, but my wife used airbnb twice in london. First time
was good (not great, but good). Second was _horrible_. (no curtain on windows
directly facing office buildings, broken shower, no tv, 2 hangers for a 10 day
booked stay, etc). Video evidence for everything, and multi-day delays in
getting resolutions (everything documented via their platform). Requested a
partial refund (no working shower for 4 days?) Response was a resounding _no_
, then threats from the person who was doing the renting that they would post
negative reviews of my wife as a renter so no one would rent from us again.
Guess what? The owner (and his girlfriend) had several airbnb properties they
were renting out, growing a landlording business (without all the pesky
regulation). (edit: there were multiple reviews stating how great it was - it
was a veritable dump - which is partially ok, but broken shower, no tv, etc -
when those are clearly listed amenities - is simply lying. Oh, and if you're
going to rent out a room/place via airbnb, please remove moldy/stale food from
your refrigerator first)

Contrasting that with a recent nashville visit via airbnb (I didn't book it,
but stayed there) - the epitome of the "share my home" aspect that gets played
up - notes around the house, everything fresh and tidy, etc).

Forcing just 1 would certainly get back to the roots. Or perhaps a sliding
scale - fees go up as you want to list more rooms? The individuals wanting to
rent out a spare room get the cheapest fees - the people trying to be the next
hilton (sans service and regulation) pay correspondingly higher fees).

~~~
muddyrivers
One question I haven't seen to be raised often is how the reviews are
"regulated" by airbnb.

I rented an apartment in a metropolitan city via airbnb last year. Both the
owner and the apartment got about ~15 excellent reviews. It turned out the
owner was very indeed very nice and friendly, but the apartment was far from
both the description and the reviews. Our friends living in the city was
astound since the price we paid should get us a much better deal than that.

It made me wonder if 1) the reviews were "regulated" or "engineered" somehow,
2) due to the two-way review system, renters were reluctant to write a bad
review since they were concerned they could get retaliated by the owners
giving them bad reviews in response.

Edit: fix typos

~~~
Evgeny
_due to the two-way review system, renters were reluctant to write a bad
review since they were concerned they could get retaliated by the owners
giving them bad reviews in response_

This, I think, is important. Both the renter and the landlord have to write a
review before both reviews appear on the website. And the review content of
the other party is not known to you until you post your own. So, basically, we
know when the renter is "problematic" \- has a lot of complaints, is
constantly unhappy etc. We generally don't leave a review for such person.
This is probably not the best approach from an ethical point of view, but yes
- we do not want to know what this "problematic" guest may write about us.

~~~
xerophyte12932
So, if I don't write a review, the other party's review won't get posted
either? This misuse can be prevented by implementing a deadline for submitting
review and beyond that, whoever submitted theirs gets posted. So even if you
forfeit your review, it still wont prevent the other party's bad review from
getting posted

~~~
Evgeny
_So, if I don 't write a review, the other party's review won't get posted
either?_

Yes, I'm quite sure that's how it works currently. There is a deadline, which
is 14 days, and also you are notified when the other side posts a review. The
message says something along the lines "X just posted a review, you need to
post a review for both of your reviews to become public". And you also can't
see what the other side wrote until you post yours.

There is also place for "private feedback" in the review, so of course it is
possible to leave a good review, but send a bunch of complaints or suggestions
that are only visible to the person you are reviewing.

------
AndrewKemendo
I have stayed at 4 AirBnB properties over the past month or so. The first
three were great. They were - almost literally bed and breakfasts, where I
interacted with my hosts and they made me breakfast the next morning and were
company in the evening.

Last week I stayed at one in NYC and it was honestly weird. The host wasn't
there and just left the door unlocked and all the lights off - without saying
as much in an AirBnB message. Some of the outlets did not have outlet covers,
leaving wiring exposed etc...

Anyway, it's been clear for a very long time that the thing that you find from
a hotel is completely lacking with AirBnB: Consistency.

On the flip side, should people be looking at AirBnB as a direct replacement
for hotels? Obviously that is the operating thesis, but I think a better way
to consider AirBnB is as a _marketplace for Bed and Breakfast accommodations._
All of the problems that are brought up go away if you think of it in that
context.

~~~
JoshTriplett
Sounds like much of the problem would go away with better labeling and
categorization. Some people want the get-to-know-your-host experience, some
people want the impersonal experience, and some people might want either one
depending on the nature of the trip. The problem arises when you expect one
and get the other.

~~~
enraged_camel
I guess I don't understand why people looking for an impersonal experience
don't just book a hotel - or even a motel. At least then you are guaranteed
certain things such as working showers and toilets.

~~~
ploxiln
Some people are cheap, and use airbnb just as a way to spend less money.

Prime example: my girlfriend. We can both easily afford a normal hotel room,
especially when traveling together. But in an expensive city, spending
$80/night on an airbnb instead of $200/night on a proper hotel, is to her an
irresistible savings. We've had bad experiences, and we've had fights about
this. There may also be cultural differences. I have a high salary, no debts,
and lots of savings, and there are some things which I think are absolutely
worth paying for (like a hotel room), and she just doesn't want me to.

~~~
enraged_camel
Yeah, I understand. I suppose to old adage holds true then: you get what you
pay for. The cost savings from booking an AirBnB over a hotel is increased
risk that you may have a shitty experience with no recourse. Whereas with a
hotel, the experience is a lot more consistent (since hotels are regulated),
and if you _do_ have a shitty experience, you have official channels through
which you can get compensated.

------
jackblack343
I don't understand why they are allowed to look the other way when
"professionals" are breaking local laws. Youtube can't allow copyrighted
movies on their site. Megaupload was shut down. Below is a real customer
service response to reporting a professional in our building.

thanks for reaching out about this, I do apologize for the delay in my teams
reply and for contacting us regarding your concerns with the listings you've
identified. Airbnb is an online platform and does not own, operate, manage or
control accommodations, nor do we verify private contract terms or arbitrate
complaints from third parties. We do, however, require hosts to represent that
they have all rights to list their accommodations. To that end, we are
committed to notifying hosts about complaints such as yours, provided we (i)
receive a formal written letter (scanned electronically as an image or .pdf)
addressed to the user that (ii) details your specific allegation, and (iii)
fully identifies the Airbnb user to whom you believe it applies (please
include links). Although we will not verify, evaluate or arbitrate the terms
you identify, we will provide a complete copy of your complaint to the host
and we will ask them whether they wish to remove their listing(s). Again,
thank you for contacting us about this. Best,

~~~
flashman
Well, quite simply, YouTube are (and Megaupload was) serving the infringing
content, making them a contributory party. If we started holding building
managers responsible for the lawbreaking of their residents, that would at
least set some cats among the pigeons I guess.

------
100k
People love _using_ Airbnb, but don't want an Airbnb rental next to their
home. The negative externalities remind me of cars: super useful for me, super
annoying to you.

~~~
nostrademons
Which bodes well for Airbnb, since the modern business environment is pretty
much based on socializing negative externalities while providing value to
direct customers. Besides cars, there's also oil, coal, mining, plastics,
advertising, agriculture, water rights, and housing development.

~~~
abalashov
This. I don't know why I get so many blank stares when I explain that a great
deal of the technocratic New Economy is about reassignment of risk.

------
knocte
IMHO all the regulation to be done against multi-property landlords should be
created at the state-level, I mean, decoupled from any Airbnb-like
infrastructure ("don't shoot the messenger!").

That is, the state has ultimately all the information regarding real-estate
ownership. Creating laws that tax adequately the companies/individuals that
own more than 1 property should be easy, and irrespective to how/if they
monetize them.

Doing a regulation against AirBNB is ultimately going to hurt the real regular
people that is being helped by this "sharing-economy", such as the ones that
just rent their unique property (either because they have an extra bedroom or
because their job required them to move to a different city where they bought
their house, and therefore use their AirBNB income to pay the rent of a
different apartment).

~~~
abandonliberty
They're not shooting the messenger.

Proposition F >Limits short-term rentals of a unit to 75 days per year,
regardless of whether rental is hosted or unhosted. >Requires proof that the
unit’s owner authorizes using the unit as a short-term rental. >Requires
short-term hosts to submit quarterly reports on the number of days they live
in the unit and the number of days the unit is rented >Mandates that the city
post notice on buildings with a unit approved for short-term rentals and
notify by mail owners, neighbors of the unit and interested neighborhood
organizations. Source: Ballot Simplification Committee

AirBnB created a market in an area where existing laws didn't apply. This is
part of legislation catching up.

~~~
knocte
There you go, 75 days a year? That affects small-owners in the same way as
multi-owners.

~~~
incongruity
Except that if it's truly about renting out something you already own (and
likely attached to your house) then it still makes it possible.

However, what it massively disincentivizes is buying property solely to use it
for hosting on Air BnB (and thus preventing others from buying or renting the
property for residential use).

~~~
knocte
Yes it disincentivizes that but it also penalizes people that need to rent
their place to pay rent in a different place to where they bought the house
originally (there are many reasons to not sell your house in this scenario).

~~~
incongruity
Given the market, they could either rent that place to a full-time tenant or
sell it – the odds are strongly against them being underwater, given the
market. Given the stated aims of increasing the supply of residential
rentals/property ownership, I don't think this case is counter to the aim of
the proposition.

~~~
knocte
People generally think that landlords prefer renting via AirBNB instead of
full-time renting because it provides more income. This is just one side of
it. There are more advantages:

\- When the property is not rented, you can use it for yourself (imagine if
you want to go back home from time to time to see your parents, then you block
some spot in the calendar).

\- The property is not rented 100% of the time so then it deteriorates more
slowly. Less maintenance costs.

\- There are less chances to get tenants that don't pay and still stay in the
property.

------
jrbapna
The housing shortage in SF is a citywide problem that goes far beyond airbnb.
Removing airbnb listings would barely make a dent in the extreme housing
problem that we have in San Francisco.

The few times I've used airbnb they were always much better than comparatively
priced hotels in the area.

~~~
WalterSear
AirBnB was just walking by the scene, looking unsavoury enough to make for a
sufficently satisfying lynching.

------
xivzgrev
This article captured exactly how I feel. Airbnb has become it's own worst
enemy by getting greedy and not proactively removing bad actors who make them
money. And I really hope SF passes prop F to force their hand.

------
guard-of-terra
Article's author seems to defend problems rather than acknowledge their
solutions.

"it comes from professional landlords who are removing badly needed housing
from the local market and making it available exclusively for tourists"

Since when in modern society should commercial entities care about what is
"badly needed" instead of where profit lies? Since when it's not only
politicans need to pretend to care about "regular people", but commercial
property owners?

"That’s true of regular hotels as well, but usually they exist in areas that
have been zoned for such activity"

This seems to be the root of problem. Zoning is a socialist measure. It will
create all kinds of shortages.

The whole article reads to me like this:

We've implemented this zoning measure that we knew would cause problems. And
by golly it did! Now we're trying to blame these problems on all kinds of
commercial entities. Make them fix things for us that we knew would arise. And
we also want more regulations to fix problems caused by having regulations in
the first place.

~~~
mistersquid
You seem purposely to miss some of the points of Steven Hill's very even-
handed analysis which is that some AirBnB operators are turning residential
zones into commercial hotel zones by having multiple listings and this causes
conflicts for 1) residents who find commercial activity in and around their
homes , 2) municipalities deprived of tax revenue, 3) guests who find
themselves in units that do no have adequate safety protections let alone
commercial insurance.

This is especially problematic given that in LA, SF, and NYC AirBnB makes a
large fraction (~44%) of its revenue from commercial operators with multiple
listings. That is, in these markets nearly half of AirBnB "hosts" are
entrepreneurs who are flouting municipal law and obligations for their
personal gain and to others' detriments.

Hill offers a few common sense (and in my opinion equitable) actions AirBnB
might take to make amends. In a passage worth quoting in context, Hill writes

> Perhaps the biggest tragedy in all this is that at the core of Airbnb is a
> really good idea. It has cleverly used Web- and app-based technology to bust
> open a global market that connects tourists with financially strapped
> homeowners. After interviewing some of Airbnb’s “regular-people” hosts, I’m
> convinced that this service legitimately does help them make ends meet.

> But by taking such a hands-off, laissez-faire attitude toward the
> professionalization of hosting by greedy commercial landlords and
> multiproperty agents, Airbnb has become its own worst enemy. As the number
> of victims piles up, it undermines its own “sharing and trust” ethos because
> Airbnb could easily meet cities halfway:

> • With one stroke of the computer mouse, Airbnb could “evict the evictors” —
> de-list from its website any professional landlords or property managers
> operating multiple properties as tourist hotels. It has the data and knows
> who they are.

> • Cooperate with cities like San Francisco, Santa Monica, and Portland,
> which require hosts to register with local agencies, by de-listing any
> unregistered hosts.

> • Pay the same hotel occupancy taxes that hotels pay in all 34,000 cities in
> which Airbnb operates, or collect them from the hosts and turn them over to
> the cities.

> • Stop refusing to supply the data that cities need to enforce regulations
> and taxation, including the number of rental nights and rates charged by
> each host.

EDIT: Remove markup. Readability. Grammar.

~~~
guard-of-terra
I think that zones are the problem. There should not be residential zones.
There should not be commercial zones. There should just be the city.

Or else you should be ready for consequences: shortages of one thing after
another, people turning sour, inadequate pricing.

1) I don't see why one would at the same time expect to live in a heart of
dynamic, rich and important city and be shielded from reality. Yes, if you
live in a shared building you may find a brothel, drug pusher store, or AirBNB
rental next door. Call the police if they behave. Cope otherwise, or move to
suburbs.

This may sound unfair if you expect otherwise, but those expectations are
unrealistic.

2) But they don't talk about tax, they talk about banning. Taxing is a thing
they can do. Just write a law clear enough that it would explicitly cover
AirBNB, with clear understanding how this tax should work. Then force it out
of AirBNB, suing if needed. Of course, some of individual lenders will go grey
(for example, exchanging money outside of AirBNB's sight), but so can do
hotels.

3) I don't see why short term rented flat would need more safety protections
than regular flat.

Pass adequate laws. Don't ever start talking about banning something. That is
what you should do.

~~~
mrchicity
Zoning regulations deal with a classic "tragedy of the commons" problem.
Nobody wants to live next to transients, but each person individually benefits
from renting their property to them while they're away on business or
vacation. If everyone agrees not to do this, and the rule is enforced, they
are all better off.

If you believe this is just a "socialist" thing, what about commercial
contract agreements between property owners in a co-op? Should they be allowed
to all agree to not engage in short-term rentals? Many condo and co-op board
contracts have provisions for this, not enforced by some maladaptive
government, but by negotiations between equals. It's a common desire and
short-term renters aren't a protected class.

~~~
aianus
> Nobody wants to live next to transients, but each person individually
> benefits from renting their property to them while they're away on business
> or vacation.

I've lived in actual full-time hotels in Asia for months at a time and never
encountered any of these "transient" problems people keep whining about. Maybe
once a month there was some noise at night. And these weren't high-end hotels
either.

~~~
hunterloftis
Fine, you don't want neighbors. This is probably true of many people who
choose to live in "full-time hotels in Asia."

Many people move to residential zones because they _are_ interested in having
neighbors, and they are understandably perturbed when an entity encourages
law-breaking behavior that destroys their neighborhood.

~~~
aianus
The article is about SF and NYC. People live for years in residential
neighborhoods in SF and NYC without befriending their neighbors.

Anyways, having transients for neighbors actually reduces your risk (variance)
with respect to your neighbors. Any given day you're likely to have a normal
respectful neighbor. If they're not, they'll soon be gone. Whereas with
permanent neighbors you're stuck with them for a long time if they're
inconsiderate assholes.

~~~
hunterloftis
So your opinion is that people who want neighbors should consider seeing
random strangers next door an improvement over people with whom they can
develop long-term relationships?

> People live for years in residential neighborhoods in SF and NYC without
> befriending their neighbors.

The data doesn't back this up. In fact, NYC and SF are two of the best places
to befriend neighbors based on the shared walkable living areas that are rare
in most US cities. Here's a recent article on the phenomenon:

\- [http://www.vox.com/2015/10/28/9622920/housing-adult-
friendsh...](http://www.vox.com/2015/10/28/9622920/housing-adult-friendship)

------
dandare
This just reminds me of Uber - same clash of ideologies between those whon see
empowerment of people through new technology and those who see unfair
advantage through breaking the law. The problem is that both sides are right.
Both Uber and AirBnB provide better/new service through new technology where
the incumbents usually didn't bother to inovate and banning them would be
backwards. But both also profit from not being subjected to the same
regulations - and this is what we should be discussing. While some regulations
add value - fire safety standards etc - other are just disguised taxes - why
should taxi licences be auctioned for the price of a family house?

------
tomasien
Housing in New York City and San Francisco is a problem - MASSIVE. Airbnb has
helped many people in those cities find places to stay, make extra income,
etc. I'm certain, because of the reasons the problem exists in the first
place, that people have and will continue to find ways to use it in ways that
are harmful to vulnerable populations.

But if you focus really with any energy on Airbnb as a part of the problem
rather than some of the applications of Airbnb as EVIDENCE of the problem, boy
howdy are you missing the point. I fear that is what will happen - everyone
wants a scape goat, tech is an easy one.

~~~
geebee
I'm a little late to this thread, but I think short term rentals could be a
bigger core problem than you've recognized. This is all hard to determine
without data, and some of what I am worried about is a risk rather than a
current reality, though it appears to be growing.

Here's where I'm coming from - in my lifetime, the percentage of SF residents
under the age of 18 has dropped from about 22% to below 14%. Much of this
happened without airbnb or short term rentals, so obviously they can't be the
core cause. However, it could exacerbate it.

Airbnb makes it far easier to rent out a "spare" bedroom - in doing so, they
vastly increase the value of having a "spare" bedroom that you don't use. So
if you are a family with just one kid, three bedroom houses suddenly become
much more attractive than two bedroom houses, because what used to be an
occasional guest room is now an income generator. What happens when a family
with two kids goes up against them in a bidding war? One family can factor in
the extra income, the other factors in no extra income and the additional
expenses of an additional kid.

airBnB(noKids, hasKids) {
unless(noKids.income(isWayHigherThan(hasKids.income)) { numKidsSF--; } }

At least in that scenario someone is still going to be "from" SF (when this is
no longer the case, SF will be nothing more than a disneyland for young people
and empty nesters).

It can get worse - what happens if investors now realize that they can just
buy the whole 3br house and treat it as a hotel?

I could see airbnb being a factor in driving the already collapsing percentage
of SF residents who are children to even lower lows.

By the way, in all of this, I see a good place for airbnb. If a San Francisco
family wants to leave for a vacation in Paris, and they can rent out their
place for a couple of weeks, and vice-versa, this seems like _a good thing_.
But if converting a "spare" bedroom means that what were formerly kid's
bedrooms are too profitable as tourist rentals to be wasted on children, then
no, this would be extremely destructive to SF.

We need to regulate this, and airbnb needs to be a good citizen and cooperate.
The suggestions in this business insider are good ones.

~~~
fineman
> "We need to regulate this, ..."

Do you know that adage that goes: "... then they say, I know, I'll use a
regexp. And then they have two problems."

It's regulation that got SF into this problem.

~~~
geebee
"It's regulation that got SF into this problem."

Unfortunately, you don't give me much to go off here. I consider myself
somewhat moderate where it comes to regulation, though that's probably
because, as a programmer who hangs out on HN, I interact with a very tech-ish
libertarian crowd. In short, I do see an important role for regulation of
industry, housing, and so forth. I also do tend to agree that a lot of
regulations are onerous and harmful, but I don't nod in agreement when someone
simply says "government" or "regulation", as if the problem has now been
adequately identified and analyzed. I do prefer that people actually explain
what regulations caused this problem and how, and consider what problems might
exist in the absence of regulation.

So… if you are pointing out that SF has caused a problem with anti-grown
measures, I'd generally agree. If you are pointing out that that peninsula
towns have contributed to this problem, I'd overwhelming agree, the behavior
from places like Mountain View has been pretty shocking.

On the other hand, if you are telling me that zoning is obsolete and that the
concept of residential neighborhoods in urban areas, where residents of _some_
neighborhoods trade their right to run a hotel out of their house in exchange
for for a legally enforced expectation that they won't have to live next to a
house suddenly converted into a hotel - if you're telling me _that_ regulation
is the problem, then it's unlikely I'd agree with you, though I am all ears.

~~~
fineman
Obviously short-term rentals serve a need many have or AirBnB wouldn't have
such uptake.

Adding regulation to fix that issue without changing regulation to increase
supply, etc. seems like it misses the point.

People are already ignoring the regulations - how are more going to solve
that?

------
danieltillett
The interesting thing about AirBnB is by going down the unregulated hotel
route is it opens up an opportunity for competitors to come in offering a real
home sharing experience.

------
tcdent
> Unfortunately, that means in my experience the quality drops, no 'homey'
> feel, and it negatively impacts the locals.

Isn't this the fundamental goal of reviews; get a real opinion from the users
on wether this is a good or bad thing?

------
Ch_livecodingtv
I stayed in an AirBnb property and I had good experience. But when you realize
the place you stayed wasn't really surveyed for security, it's scary.

------
floodyberry-
How does Airbnb have two faces? Their entire company is just an app that
offloads all of the regulations, upkeep, and safety of running a Hotel on to
the users, and charges them for the "privilege". The only face there is a
greedy leech taking advantage of "not illegal yet" loopholes.

~~~
heroh
that describes Uber pretty well too

------
WhitneyLand
How is Airbnb responsible for rent control evictions? Landlords would get rid
of these tenants at any opportunity regardless of whether Airbnb ever existed.

~~~
tptacek
Not sure if I'm missing something about your question, because this seems
obvious. It's increasing the demand (by allocating a whole new population of
short-term tenants to the market, who would otherwise either not visit or
would stay in hotels and hostels) and constricting the supply (by
incentivizing landlords to take entire properties off the rental market to
service those tenants).

~~~
Zarel
If you're counting "short term tenants" in the demand, it seems really
dishonest not to count the properties that serve them in the supply.

If we're talking about the supply and demand of all housing, supply has not
changed because because using properties to service short-term tenants is
still keeping it in the supply, and demand has not changed because you're
conflating demand with transaction quantity.

In other words, when Airbnb allows the supply of short-term rental properties
to increase, this decreases equilibrium price and increases transaction
quantity of short-term rentals, but demand itself isn't affected. The number
of people who _want_ to visit San Francisco at any given price point hasn't
changed, it's just the number of people _able_ to visit that's changed.

Really, all that's going on here is that Airbnb has lowered the barrier of
entry to short-term rentals, allowing landlords to more easily address market
inefficiencies created by rent control.

Not that rent control is wrong, but it does work against market forces, and
markets tend to route around regulations that work against market forces, in
the form of black markets, or scalpers, or whatever. Your enemy really isn't
individuals or companies so much as market forces themselves, and while
sometimes it's necessary to fight them, honestly, it'd be easier just to
legalize building denser housing. Unlike Airbnb, that's what's _really_
restricting the supply.

~~~
roel_v
"and demand has not changed because you're conflating demand with transaction
quantity"

What? Of course it increases demand in the market that is traditionally served
by houses in residential neighborhoods. 'Real estate' is not one market, there
are several, divided by zoning regulations. When the people that used to stay
in hotels now are looking to occupy places in houses where they didn't used to
be able to stay, the demand for stays in those places has gone up.

Furthermore, demand is _also_ increased (demand for the amount of nights)
because visitors can stay cheaper (per night) so some stay longer. I.e. more
demand.

~~~
Zarel
I think you're still conflating demand with transaction volume. Let me put it
this way:

> Furthermore, demand is also increased (demand for the amount of nights)
> because visitors can stay cheaper (per night) so some stay longer. I.e. more
> demand.

Demand is a curve. Visitors saying longer because they can stay cheaper just
changes what part of the curve you're on, it doesn't change the curve itself.

In other words: the demand was always there, that visitor would always have
stayed longer if they could stay cheaper. The only difference is whether or
not they have that option, which is a difference in supply, not demand.

~~~
roel_v
Demand _does_ go up, because people who earlier couldn't compete for the good
we're talking about now can. There are x locations each night to sleep that
are zoned for residential purposes, some more attractive than others. This is
the supply. There are y people competing for those; y is roughly equal to the
amount of people who have their primary residence there. Now y' people who are
not primary residents start to compete for those places. Result: demand is y +
y'. X remains constant (in the short term). Result: P goes up.

The 'cheaper' meant _compared to the prices of another market_ , i.e. the
hotel market. This is a cumulative effect, on top of the first-order effect of
those consumers being let into the market in the first place.

