Airbnb and its clones, although initially introduced positive disruption, are turning entire city districts into alien tourists traps. The range of "services" and prices there make long term inhabitants to stay away. Barely anyone with local salary can live there. So we end up with attractive historical districts with predominantly temporary rentals which are completely empty out of the season, and dull residential districts where people earning local salaries can afford to live. I'm talking from my observations in various EU cities (Berlin, Prague, Barcelona).
While your sentiment is partially right, it is important to note that in Prague, after the fall of the iron curtain, local currency was very very cheep compaired to foreign currency. And normal Czechs just didn't have any money anyways. So the problem in Prague is not caused by Airbnb. It has existed for about 10-15 years.
Of course, it's a pretty controversial and complex topic, but I feel like the ban was a step in the right direction. I use Airbnb myself as a guest in other cities and I like that it exists, but I also don't believe that historical city centers should simply be sold to the highest bidder.
...though it's also entirely possible I'm just a hypocrite.
You say that like it's a bad thing, but if that is the most productive use of property (i.e. the use that people are willing to pay most for), then I think that is what should happen, and I don't see any issue with AirBnB facilitating this.
Yes, it is a good thing when the rich enjoy the best quality real estate and normal working people live in slums on the outskirts of the city and commute for hours into the city. Normal people deserve to live on the outskirts, because they aren't smart and hard working like the rich.
How empirically adequate is the claim implicit in your criticism that Airbnb is primarily used by the rich?
Au contraire, Airbnb is primarily used by the young and (comparatively poor), students and young adults. The kind of person who comes to Berlin, Praha and Barcelona by Ryanair and Easyjet.
It is precisely the low-cost nature of Airbnb that has made it so popular: in order to save money you can fit multiple people into a small Airbnb if you really want, you cannot easily do that with a hotel. The wealthy (usually older) stay in posh hotels.
Airbnb, like low-cost airlines, has made travelling to major cities more affordable to the masses.
* * *
A more general point: I don't see why having zones dedicated to short-term lodging and
entertainment on one hand, and zones for long-term lodging is necessarily a bad thing. Such zones allows for more specialisation, hence better offerings for either. E.g. dwellings suitable for short-term dwelling probably have somewhat different characteristics than dwellings suitable for long-term dwelling. Another example, nightlife comes with noise pollution, so nightlife isn't really all ideal in residental areas (and typically subject to severe legal restriction). Restricting nightlife to small zones with a dense stocking of nightlife is one way of getting around this problem.
Moreover, the entertainment value of a city increases dramatically with increasing tourism, and that's good for long-term inhabitants too. I would like to up the ante: great party zones is one of the key things that make cities livable.
In the US, the question of whether the "center" of the city is a tourist trap or a place where people live is irrelavent. Everyone goes everywhere by car, and the real center can move. However, in Europe, where we have REAL infrustructure, train stations, subways, tram lines. And we, the citizens, have invested TWO CENTURIES of tax money to build that incredible infrustructure, taking that center and saying "this part of the city is going to be too expensive for normal people to live there, is nothing short of theft. Normal people paid, with real money, taken out of their sallaries, which they earned with real work in order to build that subway system that they can no longer effectively use, because they live on the outskirts now. So any new zoning has to take that into account.
As for who is rich. Young, healthy, students who can afford to take time off and travel ARE RICH! You can say what you want about Ryan air being cheep and only €50 a flight. But the minimum wage in the Czech Republic is 11 000CZK or just €400 a month! Poor people have trouble paying for rent, and there is no chance they will be taking time off to take that ryan air flight to Brussels to spend the weekend in an AirBNB.
And those people don't benefit from AirBNB at all, given that they have no assets to invest in real estate.
this part of the city is going
to be too expensive for normal
people to live there, is nothing
short of theft.
I'd recommend not using terms like "theft" here, as it is factually inaccurate, and goes back to the unfortunate tradition of Leninist agitation which gave the world Stalin, Mao and Pol Pot ... and despite all the violence, didn't even manage to produce housing of a quality that came close to anything the modern western democracies had to offer to their masses. And in case of the Soviet Union didn't even manage to feed its own population.
Anyway, let me remind you that I don't believe your claim that Airbnb has a
substantial influence on property prices. As far as I can see, the
dominant factor in property prices is distance from center, and
proximity to amenities, in particular public transport -- all that regardless
of Airbnb.
because they live on the outskirts
The main purpose of public transport is to enable those living in the
outskirts to get to the center in the morning, and go back in the
evening. The drive to separate out work from living quarters goes
back to the industrial revolution when work suddenly became noisy,
dangerous and polluting, so the old model (working and living in the
same place) had to go. This required mass transport, be it cars or
public transport Anyway, there is nothing wrong with living in the
outskirts. Many prefer it, especially those with children. There is
no human right to live in Manhattan or in Mayfair or in Charlottenburg
in a 150 m^2 loft that costs only €200 per month. That would be an
extremely inefficient use of dense urban space. Second, tourists use
public transport more than the normal population, because the latter
spends most of their day working, while tourists explore and move
around. If you are interested in the utilisation of public transport,
attracting more tourism is a god-sent. Note also that increased
tourism generates additional local employment, because tourists spend
quite a bit of money.
students who can afford to take
time off and travel ARE RICH!
This is deeply misleading. In any given country, students are near the
bottom in terms of average spending power, and that's because they
typically live on their parents money and / or government grants.
Their peers who dropped out of school at 16 and learned a trade
(e.g. welding or carpentry or plumbing) will out-earn the average
student at that age (a few years after graduation this will change).
Note also that in most western countries, nowadays the majority of the
population goes to university (for some definition of university).
Another way of seeing that students are essentially at the bottom of
each society in terms of spending power is to look how they live
(eg. sharing), and to look at the population's average income
trajectory: just about anyone's overall available income increases
considerably after graduation.
Of course you can compare the average student in Denmark with the
average worker in Malawi, and find that the former is wealthy
vis-a-vis the latter, but this is not an interesting comparison.
Czech Republic is 11 000CZK
Yes, and why is this interesting? The minimum wage in Malawi is
... what $1 per year? The cost of accomodation always correlates strongly
with the average income
Poor people have trouble paying for rent
Not in a meaningful sense in the western world. For essentially
everybody by the richest, say for 98% of the population, rent/mortgage
is the single biggest cost they have in life. The average person
spends between 25% and 50% of their income (after taxes) on
accomodation. This feels painful for everybody, but is managable in
practise. Another way of looking at this is to see who is homeless, and why. In practise in Wester Europe, there is little/no
homelessness apart from those with serious drugs problems and / or
mental illness. This is a pretty strong indication that housing is affordable for everybody. Yes, it would be better if there was
no homelessness, but the problem is one of drug-addition and mental
illness, and that's something that as of 2017 we don't really know how
to solve.
And those people don't benefit
from AirBNB
They benefit in several ways: I already mentioned the economic boost
that cities get from additional tourism. But they also benefit from
the economies of scale that you get from streamlined tourism, like
cheaper flights, cheaper holidays, more interesting cities. Easier
travelling because large companies like Airbnb can develop apps that
make booking easier.
You warn me not to claim that taxes are theft by using examples of failed socialist utopias. My argument was that once people have paid their taxes, they deserve something in return, like the ability to take advantage of the infrastructure that they paid to build. If you simply take peoples money, and use it to subsidize the rich, then that is theft. This is a very different argument than that of Proudhon, who says that "property is theft", or of Thomas Paine who claims that:
>Every proprietor, therefore, of cultivated lands, owes to the community ground-rent (for I know of no better term to express the idea) for the land which he holds; and it is from this ground-rent that the fund prod in this plan is to issue.
Though I agree with both authors in general, my claim of theft was not the same as theirs at all.
> The main purpose of public transport is to enable those living in the outskirts to get to the center in the morning, and go back in the evening. The drive to separate out work from living quarters goes back to the industrial revolution when work suddenly became noisy, dangerous and polluting, so the old model (working and living in the same place) had to go. This required mass transport, be it cars or public transport Anyway, there is nothing wrong with living in the outskirts. Many prefer it, especially those with children.
In Prague, most people don't work in the center, so the commuting to the center argument is a mute point. The center is literally only for tourists.
> Yes, and why is this interesting? The minimum wage in Malawi is ... what $1 per year? The cost of accomodation always correlates strongly with the average income
The reason why it is interesting, is that a €50 flight to Brussels, and a €8O AirBnB stay for two nights, would be a third of a months salary at Czech minimum wage. So it is totally unrealistic for people on the east who make that kind of money to travel west. However, westerners have no trouble traveling east. (Some eastern students are able to travel west, but they are among the wealthy).
> economies of scale
Economies of scale do not exist in the urban housing market, because supply is pretty much fixed. The more demand, the higher the price.
I'm not %100 against AirBnB. But I feel that the use of AirBnB to rent out whole apartments is unfair in cities where taxpayers heavily subsidize infrastructure and common spaces. Especially when the investor is a foreign one. Then the money from the west flows east and then flows right back out again.
Economies of scale do not exist in
the urban housing market, because
supply is pretty much fixed. The
more demand, the higher the price.
This is not the case, and the issue has been discussed many times here on HN with respect to San Francisco.
There is no technical reason that prevent increase of supply. You could flatten the old town and build Dubai-style 100 floor skyscrapers, creating >20k new flats. The only reason why this doesn't happen is legislation, zoning laws, building codes etc, which in turn reflect the will of the majority of the population who don't want radical change of cities.
In Prague it would suffice to start walking around throwing paint at tourists and smashing 14th century statues. That would get the demand down enough that normal people could move back to the center.
Edit: My point being, that buldozing the center and building high rises would solve the problem, not due to incresed supply, but due to decreased demand. There's a reason why Frankfurt and London are the only cities in Europe with high rise centers and its not the price of steel. There are pleanty of sky scrapers in Europe, but they always end up being some dead part of town that nobody visits for any reason other than work or sleep. I guess that just returns to my point about "real infrustructure". I think that in the US, you can't even really talk about the "center of the city" because people don't "go to the center" as a thing to do. People stay at home, or drive to the gym, or go to the movies. They don't "go to the center, stop to watch a movie, get out, walk around a bit, have dinner in the center." While all the time thinking of their activity as "spending time in the center" rather than "going somewhere".
If that's what you think the problem is, then I've got bad news for you: this system applies to a whole lot more than just housing. This is how all scarce resources are allocated, and it's the most fair and efficient system that has been invented so far.
Agreed. If a location is attracting tourists (and their money) from across the globe, it would be wasteful to turn all that money away because locals want to live there and not 4 subway stops further.
Or, to put in other terms: your historic city centre is a gem, a rarity and such things are understandingly more valuable (in monetary terms) than ordinary locations. Want to live there? Make enough money to afford it.
This turns the districts into cheap theme parks (even though everything is expensive). It takes 10 min bus ride to discover that people in the country actually don't speak English, beer doesn't have to cost 8 euro, the history left many marks many of which are not photogenic, and not all local females work in strip clubs.
Why would it be "wasteful" to prioritize quality of life for residents over investors' profits? Some cities (like Copenhagen) structure their housing mainly as owner-occupied cooperatives for a reason. A functioning city that works for its residents is valuable, and it'd be wasteful to throw one away in hopes of speculating on some kind of Disneyland attraction.
> Why would it be "wasteful" to prioritize quality of life for residents over investors' profits?
Fair enough but are you willing to compensate the investors/landlords for the lost income from foregoing these opportunities or asking the govt to have the tax payers foot the bill to help tenants stay in their properties at artificially lower than market rates?
I say let supply and demand sort this out and just focus our efforts on exposing anti-competitive violations like price collusion among landlords etc etc.
Usually landlords/investors who are attracted to this "trade" are lured by the prospects of short-term profits and if that doesn't materialize for any reason, they'd seek more stable income by entering into long-term arrangements at more economic rates with permanent tenants.
> Why would it be "wasteful" to prioritize quality of life for residents over investors' profits?
Because investors' profits don't come from nowhere. You're prioritising the residents' wishes over the tourists' wishes, despite the fact that the tourists are willing to pay more to use the property. That's not fair.
What ? You would have said Paris I would totally agree but Berlin, really ? It's definetly not expensive to live here compared to other european capitals (buying a flat costs 3,036€[1] per square metter, compared to the 8000 you need in Paris) and even compared to other german big cities (München, Hamburg).
They are not necessarily at the beginning. However if they are interesting, then they will draw visitors (tourists) which will lead to opening lodgings for them because enough of them like to stay close to places they like. This will then lead to higher rent prices for reasons already mentioned in articles so eventually, if area is popular enough, previous habitants can't afford to live there anymore.
This does not have to happen, but it does rely on relative draw of the area and therefore its relative "dullness" to visitors. In effect they can't be too externally interesting to survive.
It sounds like the process you are describing will result in the creation of lots of awesome areas that are worthwhile to visit, together with an increasing supply of housing in these areas. Why is this a bad thing?
Are you postulating that there is an infinite demand for interesting areas to visit, and an infinite supply of tourists who will completely displace locals everywhere?
I did none of those things. It was just a description of a process as value-less as I was able to write it.
However I do not think this process necessarily leads to the creation of an awesome area. Just one catered to particular type(s) of people which may or may not include people previously living there. "Awesomeness" depends on a personal point of view. I think most of us can think of an otherwise popular spot that we personally find repelling.
I also doubt it leads to increased supply of housing useful to locals in the same way as building hotels generally doesn't. It may increase capacity of a city to hold more people at any time, but without some redistribution (e.g. from taxes of such properties) may not have any (positive) effect on availability of long-term housing apart from moving some of it elsewhere.
I don't think there is infinite demand of areas or supply of tourists and certainly don't think locals will be displaced from everywhere. Their quality of life however may be reduced and it should be no surprise that they are not fond of this. If my daily commute becomes 15 minutes longer in each direction, than there are 2.5 hours fewer weekly or almost a week yearly over which I lost agency.
And I am only scratching the surface here of the problem(s) or my position which is unhelpfully that it depends. Sometimes such developments are positive, but not always or not forever. It may be a balancing act and what I am certain of is that there is no answer that would always be correct.
I also doubt it leads to increased supply of housing useful to locals in the same way as building hotels generally doesn't.
If that's the case, then building nice residential areas outside the touristic core which are useful to locals will not result in a horde of tourists AirBnBing those areas.
I think at this point it's important to note that the core issue here is that in most areas locals pass dumb protectionist laws against new construction, making it impossible for supply to increase.
I agree with you that when demand for a good increases the price of that good, the people who were previously enjoying lower prices might be unhappy. That doesn't mean the original purchasers of that good have some right to prevent new people from purchasing it.
