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If property owners can make more money renting out properties on Airbnb, that suggests short term rentals are the highest value use of that property. I derive a lot of value from using Airbnb when I travel, particularly in markets with housing shortages. If an apartment can host a hundred visitors a year, is that obviously worse for the city than renting it out to a single person?



>that suggests short term rentals are the highest value use of that property.

that's undeniably true for all property in most places that have any tourism value, but it's a short-term value akin to "if we light this city on fire, we can probably make a lot of money selling tickets to watch it".

People also have to live in the city for it to have any value as a tourism destination. If an apartment can host a hundred visitors a year but there's no service industry staff living within 50km because all their houses have been converted to AirBnB's, your tourism industry is going to collapse.


It creates an economic(and tax revenue) downward spiral in an area if it becomes a significant percentage of vacation rentals.

Real estate isn't really that controlled by market forces. Its a means to an end and pricing does not actually represent best utility.


I think the main issue is that there are laws related to hotels and there are laws around renting/leasing and there are laws around owning houses. The "short term rental" category gets to bypass all these regulations and that is the exclusive source of their margins. Once government constructs rules around short term rentals, the advantage goes away. It is also interesting that the focus of these discussions is never really balanced. It is always why it is bad for home owners or would be renters OR exclusively why it is great for consumers who get to pay less, etc. These things are complicated and it will take slow governments more time to adapt to the changed world.


> The "short term rental" category gets to bypass all these regulations and that is the exclusive source of their margins

I agree in part and disagree in part. I do think that regulatory arbitrage is part of what makes Airbnb, Uber, et al valuable. I don't think it's the exclusive source of their margins. They generate a lot of value through creating a liquid 2-sided market.


Not disagreeing, but aren't classified and brokers and apps like apartments.com already a liquid 2-sided market? If what you are saying is that they create a liquid market for short term rentals where that didn't exist before, then I agree but again I think that is a lot less liquid when regulation gets applied.


They definitely are. I’m saying Airbnb will be valuable for the same reason they are even as regulation limits their market.




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