I'm pretty sick of celebrating AirBnB. They create so many classic externalities problems and are doing basically nothing to address them despite simple solutions being available, like allowing people to look up addresses and file complaints without being a customer (ie: neighbors of AirBnB owners that are adversely affected). It's obvious why they don't do this: they know there are tons of illegal listings that would immediately be identified and pulled down, and they know that's a significant amount of their business.
This doesn't even begin to address the legalities of subleasing, the negative real estate market effects for residents, etc. all of which AirBnB chooses to paper over with ads about how they are helping poor people get additional sources of income.
We should be careful trusting them in having a significant role in our real estate system. As a company they behave irrationally and their values, outside of growth at all costs, are shallow, and as a country real estate provides a huge amount of our economic backbone. We're all still really mad at the bankers about the last economic recession, do we want to blame the next one on the tech companies?
AirBnB: fix your existing marketplace and show that you can run a proper, legal business before expanding.
Maybe, but AirBnB has also been held up as a positive story of tenacity and disruption in this community as well. It's probably gone on so long it's become a parody of itself, but people keep writing these articles because people keep reading them.
Not really clear on your tone, but HN exists as a tech forum because it is developed and hosted by Y Combinator, which funded Airbnb in a seed round (which I believe they still have, and assume is substantially valuable). So there is the probably more of a complicated community dynamic than "HN is extremely anti-Airbnb"
To that same point, Airbnb investors include pretty much everyone who have also invested in other startup darlings: Sequoia, A16Z, Crunchfund, Google, Founders Fund, Greylock, SV Angel, General Catalyst, KPCB
Clearly, based on the comments on this article, that isn't remotely true.
As someone who lives in a city with one of the most severe rental crisis in the world, with a 3:1 ratio of Airbnb properties to rental properties: I earnestly hope they go bankrupt tomorrow and their founders are tried as accomplices to the violations of local law they facilitate.
like allowing people to look up addresses and file complaints without being a customer
Complain to who, and for what purpose?
If your neighbor is breaking the law or violating the terms of their lease, complain to the city or to the property owner. Why are you dragging this platform into it?
I don't really want to live in a world where anyone on the internet can destroy my income via anonymous complaint. That seems really ripe for abuse.
For the same reason we drag YouTube into copyright complaints. You're correct in identifying that there needs to be some kind of fair balance here, but AirBnB makes a lot of business facilitating illegal transactions. I don't really think there are apartments in New York City in which running AirBnB is legal, for instance, and yet NYC is one of their biggest markets. But yes, they also have legitimate, legal business. The trick is it is very difficult for landlords to monitor their properties for this kind of behavior, and also difficult to enforce action against it (getting proof can be extremely difficult, for instance).
Because much of AirBnB's business is flat out illegal due to zoning, property laws, HoAs and leases, I think requiring them to provide a better system for accepting accountability for the negative externalities they create is reasonable.
> I don't really want to live in a world where anyone on the internet can destroy my income via anonymous complaint.
That's not at all what I'm suggesting. I'm suggesting an easy way for landlords and others to determine if a property they own or one near them is being listed on AirBnB. After that there are a ton of avenues for justice one could take, and it would probably include, along with government/HoA response, a procedure for forcing AirBnB to take down the listing given proof of ownership or something, similar to DMCA, but this is not an unsolvable problem by any means. It's one AirBnB is choosing not to solve because it would destroy their business.
No. You can't search for exact addresses, it will just show you available listings in the area. In my area, New York City, when I search my address I get hundreds of results. Beyond this there is the additional complicating factor of current availability. If it's only on AirBnB occasionally, no longer on AirBnB, or booked, it wouldn't appear using this method.
If I search my address, it puts a pin on the map exactly where my address is. I can then look for addresses that are very close to the pin. As far as I know, those locations are pretty accurate.
If you don't include a date in your search, I'm not sure why availability would be an issue. If it's no longer on AirBnB, then I'm not really sure what the problem is.
Can you add and remove listings from the search, while still keeping your ratings?
> If I search my address, it puts a pin on the map exactly where my address is. I can then look for addresses that are very close to the pin. As far as I know, those locations are pretty accurate.
In my experience they are often off by multiple blocks. YMMV.
> If you don't include a date in your search, I'm not sure why availability would be an issue. If it's no longer on AirBnB, then I'm not really sure what the problem is.
One problem is, for instance, if you are a landlord/neighbor who is trying to prove that your tenant/neighbor broke the lease agreement.
> Can you add and remove listings from the search, while still keeping your ratings?
Yes.
Beyond all of this, it's a somewhat laborious process even if it did fully work the way you described, and for a landlord who owns many properties monitoring could be a significant expense. This is the definition of a negative externality.
Really? When I search for my own address, I can recognize that the properties which show up are generally shown on the map approximately 1 block from their actual location. Since addresses are not actually shown for each property, if I were trying to check whether my apartment was listed, I would have to look through all the units available within about a block of the apartment's actual location, and be able to identify it from pictures of the interior, which may be very similar to the interior of other apartments in the building. It doesn't seem 'really easy' and is definitely not intended to work that way.
You drag youtube with the DCMA because you don't know the location or person who did the 'upload', so the complaint has to start with the upload spot. The infringing object is also on youtube itself.
With residences you know exactly where it is, ownership is in a very well maintained database and it's not going anywhere. The infringing behavior isn't occurring on airbnb, but in reality.
Complain to your city / HOA, let some sort of due process happen and then have the city / HOA fine the homeowner out of existence until they comply. Expecting airbnb & other tech companies to act like government is not something you want to become a standard practice, because you lose your say in how that gov't works.
It's like forcing newspapers to remove classifieds because people are advertising stuff you don't like.
I agree with you that I think we need to be careful about asking corporations to be legislative authorities. I'd say this is very similar to the Backpage scandal in which employees were beyond reasonably turning a blind eye to very illegal, preventable behavior happening on their platform. Why not just allow people to involve the authorities in that situation as well?
What I'm proposing seems extremely reasonable considering AirBnB is, at least in NYC and other major metro areas, primarily used for breaking the law.
Here's the thing I think most people are missing: almost every state, city, municipality etc. in existing has laws against short term rentals. The reason for this is very clear because the issues have already been considered at the civic level. There's no reason to think that just because a platform emerged that makes this illegal behavior easier that the behavior has changed. Zoning exists for a reason. People don't want short term rentals. As far as I can tell the vast majority of AirBnB's business is illegal.
This is different from YouTube in that there is a very large legitimate use for YouTube. There is a legitimate use for AirBnB, it's just not $38B large. Asking them to make enforcement easier for externalities seems like a very reasonable alternative to heavy handed government regulation (ie: requiring short term rentals to be registered with cities, which is what cities are doing now to respond to AirBnB's lack of self-policing).
> Zoning exists for a reason. People don't want short term rentals
Zoning exists to separate industry from residential and also to separate middle-class households (people who can afford to use their home only for consumption, whose only animals are pets and whose only crop is grass) from the working-class (people who made income on their home by taking in boarders, growing chickens, doing home businesses, etc.) Middle-class zoning banned these working-class activities (see https://www.amazon.com/American-Nightmare-Government-Undermi...). I think it’s really tricky to separate who is harming whom in the modern day when houses are seen as an investment and there is insufficient zoning for working-class people, and where the norms of what a house is for may be changing.
Yep, I agree with a lot of your criticisms, but there are a lot of legitimate reasons to not want to live next to a hotel (or farm animals) that aren't about keeping poor people down.
Newspapers actually are forced to take reasonable steps to avoid allowing ads for illegal activity, and owners have been jailed for it. So if making Airbnb police their listings would be like making newspapers police their classifieds, it seems obvious that they should be required to do so. https://www.washingtonpost.com/local/public-safety/top-offic...
Having businesses help people comply with existing laws is not at all uncommon. Ever notice that retail collects sales tax on your behalf when you buy something?
>>>I don't really want to live in a world where anyone on the internet can destroy my income via anonymous complaint. That seems really ripe for abuse.<<<
You already live in this world, because Yelp exists.
Additionally, no one is saying the complaints have to be anonymous, just that one should not need to be a registered user of Airbnb. It’s an important distinction.
> If your neighbor is breaking the law or violating the terms of their lease, complain to the city or to the property owner. Why are you dragging this platform into it?
So maybe the right solution is simply calling the police?
Well, real estate is a very close proxy for "this place is worth living" which is a very close proxy for absolute population which isn't a direct proxy but is certainly a deeply contributing factor to all around economic growth/success. So while there are tons of policies we can tweak, and I'm sure there are horrible ones that create artificial bubbles, it's not really fully divorceable for the economy.
> Well, real estate is a very close proxy for "this place is worth living" which is a very close proxy for absolute population which isn't a direct proxy but is certainly a deeply contributing factor to all around economic growth/success.
When the government is primarily working on the numbers (real estate values, tax revenues from real estate) there's a perverse incentive to maximize the numbers rather than serving the needs of the entire population. SF is a great example of this--the real estate market is a disaster for the middle class, but it's fantastic for the landowners and the city. Indeed, it's in the interests of both of those aforementioned parties to drive out the middle class from the region and replace them with more wealthy buyers. The whole system depends on this happening or it risks collapse.
That day will never come - at least not without blood in the streets - because we've painted ourselves into a corner.
Money is created via bank loans. The largest bucket of loans in the US is mortgage debt -- and it's worth trillions more than any other type.
Should this source of newly minted dollars dry up, the US could very quickly fall into a liquidity crisis.
So, yeah, it's easy to shake our fists at high housing costs -- but what most people don't realize is that almost every dollar you've ever touched or earned was born in some other person's mortgage.
Systems that depend on infinite population growth seem like a bad idea. Mayors of cities who constantly need to grow their population base to prop up housing prices, all the way up to countries who constantly need to grow their population base to prop up entitlements ponzis. At some point, you end up with an unstable system that will fail catastrophically. While you wait for that time, the average quality of life decreases incrementally for all (till the collapse, when the quality of life may collapse all the way to death for many).
Non-debt based monetary systems (gold, bitcoin, etc) will result in slower growth, since developers and governments will need to wait until they can attract enough saved capital to start their projects. This is why people turn up their noses at these systems. But is slower growth really such a bad thing?
Yes and no. But it doesn't matter, since countries are competing with each other. If one decides to forgo growth, it'll lose politically and economically against those who didn't.
I agree. It has to be obvious to those in charge that this debt bubble that every single country is blowing cannot continue to grow forever, yet no country has succeeded in halting or even slowing their debt growth.
They're trapped, as you say, by each other. None can get off the ride before the others do. They will all need to fail together in a worldwide economic collapse, or agree unilaterally on some sort of global debt reset.
But that's not how grownups should run a planet, and it will doubtless lead to a lot of human death. It's already lead to uncontrolled growth that has damaged ecologies, fisheries, and aquifers for thousands of years to come.
I also noticed they're talking about these new dwellings being smart/connected. I told my roommate if he ever got an Amazon Echo/Google Home device, I'd shatter it with a hammer and throw it in the trash.
Sears sold kit homes at the turn of the century (which arrived in train box cars and took 3 ~ 6 months to assemble), some which are still around today. I'd rather have something like that, which people can put together, without AirBNB doing a Google/Facebook style collection operation (I'm pretty sure they'll collect data they can sell to reduce the costs and gain a long tail profit).
Occasional reminder that AirBnB was originally "growth-hacked" with a campaign of deceiptful and TOS-violating Craiglist spam, and your forum host and YC founder specifically looks to fund for founders who break rules (including laws) "that don't matter" (to the rulebreaker), on the advice of YC's current president.
I actually started to do something similar to this when Uber was Lobbying the state legislature of Texas[1] to preempt Austin's goals of regulating background checks and fingerprinting drivers, but never really kept up with it.
If you succeeded, your underhanded tactics suddenly get re-framed in the press as fearless audacity and keen business acumen. If you failed, your underhanded tactics become a cautionary tale, and a reminder of why it<s important to remain ethical in business.
Well at least they're more likely to have to follow local housing/zoning laws if they're going to be outright constructing new buildings, right? Right??
It's interesting to note that California has some incentives in place to help increase housing and Accessory Dwellings are one that frequently are easy to get permission to build. I know here in Berkeley we have new laws in place making this process way easier.
While the state of California and some cities have been making it legal to construct accessory dwelling units, cities commonly prohibit short-term rentals in these accessory dwelling units. (Reference: Berkeley’s BMC 23C.22.020.D [1], and San Francisco’s Planning Code 207(c)(4)(D) [2]). In such cities, it seems that the law discourages you from adding an ADU with kitchen if you want to rent it out on Airbnb (or if you want to rent it out long-term, for that matter, if rent control would apply). It’s less restrictive to add bedrooms without the kitchen. I don’t think Airbnb will be able to build test homes in these restrictive cities either.
That's good to hear. In my town (Grand Rapids, MI) they've been on the radar for a few years, but some NIMBY neighborhood organizations keep killing reform. While the Grand Rapids housing market is far from the craziness of much of California, we are experiencing a significant housing crunch, and costs are rising rapidly—especially relative to wages.
We're actually in the process of building one right now (detached garage with ADU above), and we had to go through the Special Land Use process, which entailed paying a $2000 fee and presenting at a Planning Commission meeting. Most of the other items on the agenda were for things like a nonprofit building office space in a residential neighborhood, a large proposed housing development, and the like. Our little $185k project required the same paperwork and fee as those multi-million dollar endeavors.
IMHO, ADUs have a ton of upsides for communities with few downsides: they increase density with minimal impact to the character of the neighborhood (while we demolished a 80-year-old garage, our 102-year-old house is being left alone), enable small-scale upper-middle-class landlords, and activate underutilized space (such as replacing old functionally obsolete detached garages).
I wonder if there's a market for investors to fund ADU projects, similar to how Solar City and the like sell PV installations: the investor pays for the construction of an ADU, under the condition that they are entitled (via a deed rider) to the majority of rental earnings until the loan is paid off. This would be more complicated (and probably more risky) than the PV business—with PV you don't have to worry about vacancies, managing tenants, and the like—but I think it could work in certain markets, as long as enlightened municipalities remove unnecessary roadblocks.
Attempting a summary since this article was dripping with SV BS. As far as I can tell, they plan to launch some kind of modular prefab home that could scale from adding a backyard cottage to your home, all the way to a multi-family dwelling. There's an indirect hint that they may be considering including some level of space saving furnishing or some other kind of batteries included prefab home.
Thanks for posting this if nothing else as an counterpoint to the vitriol in other comments... perhaps the best example of their current work is a joint effort with a small city in Western Japan [0] which, from having visited this region of Japan, seems like a great benefit to the local community - economic and social. I hope this is the direction Joe Gebbia and team are heading.
I usually try to be a bit more constructive than an article summary, but the discussion here was seriously off the rails. Whatever their failings as a company, prefab homes at AirBnB scale could be very interesting, especially since there're ongoing housing crises all over the USA.
If they can really get the economics of scale going, this has broader implications for long term disaster relief, poverty (not extreme poverty unfortunately), refugees, and climate change migrations. Cheap, robust, and easy housing has long been a goal for architects. Bauhaus has it's roots in German communist housing for the masses, after-all.
Recent state legislation in California has legalized backyard cottages in many places they used to be illegal, including some places where the housing crisis is worst. I know a homeowner who is making use of that new law to build a backyard unit. This is a long, difficult, and expensive process. Hiring an architect, finding a contractor to build it, etc. There are not nearly enough construction workers locally, they can’t afford to live here.
Prefab backyard homes could be part of the solution - and at scale could make a big difference.
While that’s a step in the right direction, it would likely be better to allow mixed zoning, so we could mix more multi-family into existing urban and semi-urban areas.
I love home construction techniques that are "factory-ized" for numerous reasons: consistency, energy efficiency, assembly speed, cost, etc but I fear this has nothing to do with that. the quote:
"... gains vast insight from the Airbnb community to thoughtfully respond to changing owner or occupant needs over time"
to me suggests Airbnb believes their long-term future requires more than ignoring zoning laws and city regulations; it requires changing them to suit the company's goals.
There's nothing wrong with seeking to change laws but we should really look hard at the underlying motivation. Is it to make housing cheaper/better/more plentiful or is it to increase the number of airbnb listings?
Seeing as that would be illegal under most existing zoning laws...that would fit the modern SV blueprint for success.
Facilitate a massive organized effort to break the law using your app, then claim innocence, after all you are “just a software company” you didn’t illegally offer the ride for hire, rent your apt, and now rent an illegal dwelling.
I guess they need to pivot a bit. Since they jacked up fees to booking.com levels they are just a booking.com equivalent in my eyes, the prices are not cheaper anymore.
I like paying hotel level prices on airbnb yet, at the same time, be expected to put up with stuff as if I'm staying over at a friend's house for free. And, if I don't give a 5 star review, I'm a jerk?
If you don't like it, don't use it. If enough people don't like it, they will change or go out of business. My experiences have been awesome, personally.
Well, guess this is a way to add small units to extra space people have which could then be served as Airbnb's.
Overall, Airbnb experience is not the same. The prices are equivalent or in certain cases more than what Hotels charge. And in most cases, you don't get the same kind of privacy/facilities that hotels provide. I stopped even looking for Airbnb unless it's a really nice place which offers some kind of experience which hotels doesn't.
"The prices are equivalent or in certain cases more than what Hotels charge"
You conveniently ignore the huge number of cases where its cheaper than a hotel (especially a suite for a family) and the fact that it contains a kitchen and many other time/money saving amenities
Tbh that still constitutes a significant ahift in societal norms primarily executed by a single company; if they accomplish just that much, they’ve accomplished quite a bit (ofc, it's also a naturally goes hand-in-hand with things like uber).
In a hundred years, architects/urban planners will easily point to this decade as the age of... something (particularly because with any change in societal values will come changes elsewhere; if this sticks, we’ll inevitably start seeing changes in house design and city planning to support it)
Not necessarily, have a friend IRL who was accused of damaging a room he stayed in, he didn't, he was threatened to be banned from their site if he did anything like that again and they fined him for it without proof. Uber has a similar problem of drivers scamming riders for "spills".
> Uber has a similar problem of drivers scamming riders for "spills".
Can confirm a driver attempted to do this to me. He splashed a little water on his (plastic) floor mat and shredded a tiny piece of paper that had fallen out of my pocket, then reported me and attempted to charge me $45 for the cleaning.
I was furious and after a little back and forth with Uber support (which included them sending me photos the driver took of the 'spill') got my money back. He also pulled this scam before I had left a rating - he's the only Uber driver for whom I've given a 1 star rating.
Because there's no option to give someone 0 stars. It's 1, 2, 3, 4, or 5.
I don't use Uber much; I'm mostly a Lyft person, so I'm not 100% sure how Uber does things, but here's how Lyft does it: if you open the app within 24 hours of riding with someone, it opens the rating screen, and you have to rate them in order to proceed. One star is the lowest you can rate somebody. If you want to proceed without rating them, you have to wait 24 hours before using the Lyft app. If you do, the screen goes away. It used to be that if you did this, their rating wouldn't be impacted at all; as far as the rating system is concerned, you never rode with them. But a few months ago, they changed it so that waiting 24 hours without rating someone will automatically rate them 5 stars. So if you try to give them no stars, all you'll end up doing is giving them 5 stars.
Again, I'm not sure exactly how Uber does it. I don't remember if it has the 24-hour window or if you just can't proceed at all if you never rate someone, and if it does have the 24-hour window, I don't know what happens when the window expires.
The non-cynical (Ann’s therefore probably not really correct) explanation is that ratings should also capture the number of rides and these types of services are among those for whom 5 stars is expected unless they burned down your house or tried to rob you at gunpoint.
Also, if you browse /r/Lyft, you'll see multiple cases of drivers bragging about how they like to 3-star or sometimes even 1-star any rider with disabilities because they don't like having to provide accommodations as required by the ADA. I've even seen posters on that subreddit say "why don't they use a service specifically for disabled people?", which is especially awful because that's exactly what the ADA was written to stop.
Fortunately, Lyft doesn't ban riders based on ratings, but it can negatively impact your ability to get use out of the service, as a) rating someone 3 stars or below prevents you from being matched with them again thus denying them the use of your services (and if you do this because somebody is disabled, you're probably violating the ADA), and b) it makes other drivers less likely to accept requests from you. Also, I understand that if you contact Lyft to file a complaint against an abusive driver, representatives will take your rating into account when determining whether or not to believe your word over the driver's.
When I was out of the room, there was apparently a gas leak in it, and the fire department kicked in the door. The replacement door cost $1300.
I didn't use the stove/gas, and the power didn't work at all the night before this happened, it was a poor experience.
The host was great, and told me it was fine, they'd get an insurance pay out.
I was asked to provide evidence I didn't do anything, and wasn't given any information about the price of the replacement door, the extent of the damage, or why the apartment supervisor couldn't just unlock the door.
Anyways. The host sent me an image of her insurance payout from AirBnb and AirBnb asked me to pay them for the damages, so I refused, and was banned.
There's a startup called Cover that's already making homes and ADUs exactly as Airbnb says they hope to make them. Their vision is to build homes like Tesla builds cars. If you live in the LA area, you can order one online and get it delivered in 6 months.
Never hit the entry-level price target, but sell a few of the higher-end ones software locked to emulate the lower-end and say you did (then quickly discontinue).
Huh that is really expensive. According to Fixr, average cost per square foot is $117 [0], so Cover is ~3x as expensive. The benefits of going prefab would have to be pretty extreme to be willing to do that
While $117/sq.ft. is the average cost nationwide, the average in Los Angeles City – where Cover operates – is a lot higher. In addition to that, Cover offers backyard homes, which means they're smaller than a full size home. They're typically between 300-900sq.ft. A lot of the costs of a home are the mechanical systems, kitchens, bathrooms – which you still need in a small space. So the smaller you go, the higher the cost/sq.ft. When you look at the numbers – you can build a 900sq.ft. Cover backyard home in Los Angeles for $300K. It's hard to even find a good apartment at that price in LA. Full disclosure - I'm the cofounder & CEO of Cover.
Alexis, have you guys worked directly with the city to fast track your ADUs from a permitting standpoint? We’re now converting a garage in LA after a brutal time with historic review (mostly) and planning/dbs (less so).
Also to confirm what Alexis is saying about LA... We’re in the middle of our project and though we’re doing it on the cheap it’s mid 200’s per foot. Can easily see how it could be double that.
Harmmonica, Because we build in a factory, we do almost all the inspections and building safety checks with the State, which is a custom process we've developed with the state specific to our building system. This means that our process is faster and more certain than building traditionally. If you're interested in learning more, email us at hello@cover.build - our team would be happy to see how we can help!
I think this is what you’re saying but does “delivered” include everything including permitting, built (on a foundation on the site of your choice) and a certificate of occupancy issued from the city?
“Order today and have one permitted, built and ready to move into or lease in 6 months” sounds great. Even better if somehow an agreement with the city to expedite Cover’s builds could cut that timeframe in half because guessing the fabrication of the structure itself is very fast relative to the entitlements. Hopefully they’ve figured out a way to streamline with the city.
Yes, the 6 months includes all that for flat lots in Los Angeles City. Hillside lots are a totally different ball game because of the regulatory and additional engineering complexity associated with them.
For Airbnb this is a very smart move. Airbnb knows demand and supply extremely well and is poised to be able to offer some very highly leveraged financial products to fund the buildout.
This is in my opinion the most significant initiative being done by any SV or YC company. By significant I mean that it promises to end a lot of market failures and disrupt a lot of big players.
At the risk of making this comment too long for casual readers, I'll elaborate:
Consider the incentives for developers. They buy and develop plots of land or existing distressed properties with the goal of bundling as many profitable sales into the same heavily subsidized financing event.
When the developer sells a property for $500K there may be $250K in the land, $100K in the structure, and another $150K in things like appliances, furnishing, HVAC, etc.
The sale is largely emotional and is driven by the way it is legal to bundle all those add-ons into the subsidized financing. This fact alone explains much about the housing bubble. The $150K worth of bundled items are worth $75K after they have been used for a week.
The buyer consents to this because it's the cheapest way to finance a luxurious lifestyle, even though it's marked up significantly. As long as the market keeps going up, the buyer doesn't get bitten by it.
Airbnb knows which parts of the financing bundle make sense for long term value and which can be most profitably leveraged when the unit is used as an Airbnb listing.
If you think of a rental property simply as an asset, you want the kitchen renovated periodically to maximize the market value of the listing. Landlords with 12 month leases, mortgage companies with 30 year mortgages, and most notably real estate brokers with <30 day commissions have no incentive to maximize any of those elements, and have plenty of incentive simply to maximize the amount financed.
Airbnb's interests align perfectly with home buyers on this, in a way that the incumbents' do not.
If this takes off at scale it will reduce profits for realtors, builders, developers, and interior decorators/furniture sellers. It's a pretty amazing opportunity that uniquely maximizes the value of Airbnb's data. Wow.
This is cool, but selfishly speaking, the area I'd really like to see Airbnb sink their teeth into is the apartment rental market. I've rented a few long-term (~3 month) sublets on Airbnb, and the process was light years better than dealing with landlords.
For example--I've avoided credit cards and loans in the past because I've been lucky enough to have sufficient savings and wanted to keep things simple. This means I have a sparse credit history. I've always had a steady income though, and have rented for many years without ever being so much as a single day late on a payment. Despite this, I get treated like I'm from outer space just because I haven't needed to put myself into debt.
It's just such an utterly stupid evaluation criteria. I'm provably a great tenant, but can easily get passed over in favor of someone who has a much worse record, but keeps their credit score high. With Airbnb, I am judged by my actual relevant track record--a lessor can see that again and again I fulfill my obligations and make a good impression. And of course, there's more accountability on the other side too since tenants can leave reviews.
There's just so much inefficiency they could clean up here.
I would recommend to get a few credit cards so you have a credit rating. Just don't use them for credit. Make a few purchases, pay them off and life is much easier.
I know--everyone tells me this, but at this point I kind of like taking a stand against a system/culture that I consider unfair and designed to benefit banks and cc companies. While it's been inconvenient at times, I'm always able to manage.
Also, as a founder, I like to minimize the things I need to keep track of, and I prefer the simple financial discipline of only spending money I have in the bank. I do use a corporate credit card (Brex), but it's one that is specifically designed to be hands-off so that in practice it works more like a debit card.
Sidenote/plug: Brex is an awesome credit card for startups, and they have a far more enlightened approach to credit history than other cards, being started by two immigrant founders who couldn't get approved for anything despite having plenty of investment money in the bank. I was able to sign up and have a functioning card with decent limits in ~5 minutes. Pretty amazing. I have no connection to them btw (is that why I'm getting downvoted?), just a happy user.
Are you aware you can also make ~$1k just for signing up for a new credit card and using it for a few months? As long as you live within your means and spend responsibly you can get some money back from the banks by playing their games and winning. Just put it on autopay so it pays the balance in full every month.
Yeah, but for where I'm at currently it's not worth having another thing on my plate that I need to think about even a little bit, even for $1k. It also just rankles me that I should have to sign up for something I neither need nor want just to take part in a flawed and often predatory system.
I should also note that I've had multiple friends who gave me this exact advice, then ended up with thousands of dollars of credit card debt a few years later because they got carried away. No thanks. The reason these offers are made available is because cc companies know this will happen to a lot of people.
I don’t blame you, we all have a lot of things to deal with. I wouldn’t worry about ending up in debt from it if you are a tech worker with a significant financial cushion.
I wonder if there’s an opportunity here for a “free travel consultant” who will sign up for credit cards for you, take a cut, keep you up to date on the benefits you’ve accrued, and act as a travel agent, booking trips in a way that maximizes the value of the benefits. If done well, it might make life simpler instead of more complicated.
Why not? If they take 25% of a few thousand per year, that’s hundreds of dollars of annual revenue per customer - great if they can do it mostly through software.
"then ended up with thousands of dollars of credit card debt a few years later because they got carried away. No thanks. "
That really isn't necessary. I haven't paid a single cent in interest in 18 years. Get the credit card, buy a few things, pay it off and throw the card away.
If you have a business you most likely have the discipline to not be stupid.
I know it isn't necessary--just pointing out that pride often goeth before fall with these things, and since people who are otherwise financially successful are unlikely to admit to these kinds of problems, it's easy to have a skewed idea of how common they are. I know people who are financially savvy, business owners, etc., but still have had debt troubles at various points in their lives.
I have a similar opinion of the credit card companies as you. But in my opinion, the way to take a stand is to get the credit card, never give them a penny of interest or fees, take all the benefits from the card, and grow the share of people with credit card customers from whom the cc companies lose money.
They take a cut from every transaction you make. They make money even when you always pay off your balances. Your benefits were paid for by the transaction fees absorbed by merchants.
My husband can’t wait until his credit rating is 0 - due to not enough info because we haven’t had any debt for however many years :) I definitely get the no credit cards on principle thing! We’ll just deal with any additional hassle that comes about from not having a credit score. It won’t be the end of the world.
Dave Ramsey has encouraged millions of his followers to do the same ("indeterminable" score"). For the most part, it is not that much of a problem. Even home mortgages can done through manual underwriting.
The biggest pain point seems to be car rentals as they seem to have constantly shifting and strange rules about whether and when they accept debit cards. The next seems to be car insurance discounts as insurers seem to have strangely connected your driving risk with your credit score.
Yep, car rentals are a pain point for sure. There are companies/franchises that will accept debit cards with a deposit, but it can be really hard to get a clear answer one way or the other apart from just showing up and trying. In my experience, it has been about 50/50.
It's not very rational, since I'm perfectly happy to leave a deposit higher than some people's credit limits.
Could you share what kinds of banks will do manual underwriting? I am another person that refuses to get credit cards, but I did run into issues getting a mortgage.
All the banks that I spoke with would concede in person that I am an extremely low risk, but they all intended to sell my mortgage on the secondary market (but still do the servicing themselves). So, they wouldn't / couldn't give a mortgage to someone who doesn't fit the "normal" boxes.
Finding a bank that was willing to not sell the mortgage took a bit.
Society operates on credit and you're only hurting yourself by not engaging in the benefits of having a credit card. Use it like a debit card and you'll earn cash back and you will build your credit.
Putting exactly the same spend on a credit card rather than a debit one does not conflict with living within your means. Making use of credit facilities does not mean being in debt or doing anything wrong.
It's the same in the UK - there's a world of benefit in showing that you're able to use credit products responsibly and there is no risk or any cost if you just treat a credit card like it's a debit card.
There is a risk that you can't pay the bill. Losing your job may still mean you can at least pay the minimum but it can sometimes be the start of a slippery slope.
Anyone who says 'it can't happen to me' either has very rich parents or is a fool.
Responsibly using CC isn't about "relying on future income to pay off present debt". If you have 5k in the bank, don't spend more than that, and pay it off at the end of the month (or if you're paranoid like I was right out of school, pay it off every week)
If you can't trust yourself, sure. But most people do have the ability to simply not spend more than they have in their bank account and then pay off in full even before they receive a statement. Even if you lost your job, you'd still be fine.
Most people don't use credit cards to borrow. The point of the credit is just to hold until the end of the next month and then pay off in one go. The point of doing that is to allow a period of time to resolve any disputes for example.
Credit cards give you extra consumer power - actual extra laws backing you up (at least where I am).
I can't understand people who don't like credit cards if they say it's not living within your means.
Because a lot of people don't seem to follow that. You get paid X on the 1st, as long as you spend X-1 within the month you have no need for a credit card.
Other than showing some opaque credit agency that your ok for more credit.
What about the consumer protection aspects? You don't get that with a debit card. I suppose you don't need it in the same way you don't need lots of things, but it's ignoring legal protection you could have for free? Plus every single time you buy on credit you are subsidising my credit card rewards.
In the UK it's Section 75 of the Consumer Credit Act, 1974.
> Under Section 75 of the Consumer Credit Act 1974, the credit card company is jointly and severally liable for any breach of contract or misrepresentation by the retailer or trader.
> You don't have to reach a stalemate with the retailer or trader before you can contact your credit card provider - you can make a claim to both the retailer and credit card provider simultaneously, although you can't recover your losses from both.
> This right is particularly useful if the retailer or trader has gone bust, or it doesn't respond to your letters or phone calls.
> Section 75 of the Consumer Credit Act also applies to foreign transactions as well as goods bought online, by telephone or mail order for delivery to the UK from overseas.
>Which ones specifically? If they are truly for free then I don't need to pay for them by virtue of having a credit card.
Chargebacks, protection against a stolen card, no real money being tied up during a dispute, etc.
>If they are truly for free then I don't need to pay for them by virtue of having a credit card.
Every consumer is already paying for them because business price in the credit card fees into their retail prices. If you don't get a discount for using cash/debit, you are already paying for this protection.
In the US, by not using a card, you are still paying for the benefits without getting them.
With a credit card, you've introduced a new failure mode where you can end up in debt. If you do it right, you won't, but the cc companies know that a lot of people will mess it up--that's their business model.
It's a bit like with alcohol. If you never drink, you can be 100% confident you'll never become an alcoholic. If you do drink, even a little bit, that chance goes up. Plenty of people are able to drink responsibly, sure, but I can understand wanting to avoid the possibility entirely.
Say you're self-employed and your best client suddenly stops paying. They have a good track record and assure you it's just a technical blip or something. You have bills to pay so request an increase in credit limit. Then your client's blip turns into something much worse, and on it goes...
That's how people become unstuck. Very few people start off with bad intentions.
all merchants who accept credit cards incur fees for doing so and pass that cost on to consumers. Not using credits cards is giving up the opportunity to recapture some of that cost in the form of rewards. There is not a good reason to not use a credit card as a debit card.
The difference is pretty crazy. In the Netherlands, where I live, you can't use a credit card in most supermarkets, due to the extra transaction costs. The one chain that does accept credit cards charges an extra 50 cent if you pay with credit card.
Debit cards are the standard way of paying for stuff, and are accepted everywhere. For online shopping credit cards are used a bit more often, but payment through online banking is a lot more common.
I guess in practice the system is a bit like credit cards, because it is relatively easy to have a negative balance on your checking account. There are no overdraft fees, you just pay interest on the negative balance.
Credit is determined by a lack of a 'BKR registration', which keeps track of both existing loans and payments that you missed for previous loans. If you have no 'BKR registration', you can get approved for a mortgage, a loan or a credit card, provided you meet the income criteria.
There's not a lot of "discipline" that goes into paying off your credit card each month (in the sense of practice); my credit card auto-debits from my checking account at the end of the month to pay off the full balance for that billing period, so I passively pay for my purchases shortly after making them. The only way I lose money to interest is if I actively decide to log into my account and tell the system to stop paying my balance, which is something which would be bad on a variety of levels and doesn't appeal to me tremendously, so I guess it requires discipline for me to stay out of credit card debt in the same sense that it requires discipline for me to refrain from shoving a chunk of lard into my mouth.
At a minimum, you could benefit from having a credit card that you just use to pay for a monthly subscription (e.g. Netflix, Github, Patreon) and just not use it for any other expenses; stuff it in a drawer and forget about it, or physically destroy the plastic if you don't want the temptation. (Heck, you could probably even request that your credit card have a $15 limit if you want to ensure it never gets used for anything other than your Netflix subscription.)
>(btw I'm in the EU, so I don't get the obsession with CC in the USA)
I wouldn't say that Americans are "obsessed" with credit cards any more than they're "obsessed" with shampoo. Which is to say, yes, there are some people who care a great deal about hair care products and have five different bottles in their shower, but for a lot of people it's just a basic fixture of living that you're kind of expected to deal with and isn't really in people's minds. Yes, I use it every day, but I'm not a credit card enthusiast any more than I'm a shower enthusiast.
'With Airbnb, I am judged by my actual relevant track record..'
Your credit record is based on your actual payment record. Your Airbnb reputation can be easily manipulated since you can have multiple accounts and play the review game.
It is standard in the UK for regular bill payments to be recorded on a credit register regardless of how you paid those bills. Not sure if it's the same where you are? Technically, a bill is a form of debt.
My point, really, was that airbnb reviews are not a reliable measure of anyone's credit worthiness or trust other than their ability to participate in a mutual bulls..t exercise.
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[ 3.4 ms ] story [ 212 ms ] threadThis doesn't even begin to address the legalities of subleasing, the negative real estate market effects for residents, etc. all of which AirBnB chooses to paper over with ads about how they are helping poor people get additional sources of income.
We should be careful trusting them in having a significant role in our real estate system. As a company they behave irrationally and their values, outside of growth at all costs, are shallow, and as a country real estate provides a huge amount of our economic backbone. We're all still really mad at the bankers about the last economic recession, do we want to blame the next one on the tech companies?
AirBnB: fix your existing marketplace and show that you can run a proper, legal business before expanding.
As someone who lives in a city with one of the most severe rental crisis in the world, with a 3:1 ratio of Airbnb properties to rental properties: I earnestly hope they go bankrupt tomorrow and their founders are tried as accomplices to the violations of local law they facilitate.
* https://www.theguardian.com/cities/2018/nov/29/empty-dublin-...
Complain to who, and for what purpose?
If your neighbor is breaking the law or violating the terms of their lease, complain to the city or to the property owner. Why are you dragging this platform into it?
I don't really want to live in a world where anyone on the internet can destroy my income via anonymous complaint. That seems really ripe for abuse.
Because much of AirBnB's business is flat out illegal due to zoning, property laws, HoAs and leases, I think requiring them to provide a better system for accepting accountability for the negative externalities they create is reasonable.
> I don't really want to live in a world where anyone on the internet can destroy my income via anonymous complaint.
That's not at all what I'm suggesting. I'm suggesting an easy way for landlords and others to determine if a property they own or one near them is being listed on AirBnB. After that there are a ton of avenues for justice one could take, and it would probably include, along with government/HoA response, a procedure for forcing AirBnB to take down the listing given proof of ownership or something, similar to DMCA, but this is not an unsolvable problem by any means. It's one AirBnB is choosing not to solve because it would destroy their business.
If you don't include a date in your search, I'm not sure why availability would be an issue. If it's no longer on AirBnB, then I'm not really sure what the problem is.
Can you add and remove listings from the search, while still keeping your ratings?
In my experience they are often off by multiple blocks. YMMV.
> If you don't include a date in your search, I'm not sure why availability would be an issue. If it's no longer on AirBnB, then I'm not really sure what the problem is.
One problem is, for instance, if you are a landlord/neighbor who is trying to prove that your tenant/neighbor broke the lease agreement.
> Can you add and remove listings from the search, while still keeping your ratings?
Yes.
Beyond all of this, it's a somewhat laborious process even if it did fully work the way you described, and for a landlord who owns many properties monitoring could be a significant expense. This is the definition of a negative externality.
With residences you know exactly where it is, ownership is in a very well maintained database and it's not going anywhere. The infringing behavior isn't occurring on airbnb, but in reality.
Complain to your city / HOA, let some sort of due process happen and then have the city / HOA fine the homeowner out of existence until they comply. Expecting airbnb & other tech companies to act like government is not something you want to become a standard practice, because you lose your say in how that gov't works.
It's like forcing newspapers to remove classifieds because people are advertising stuff you don't like.
What I'm proposing seems extremely reasonable considering AirBnB is, at least in NYC and other major metro areas, primarily used for breaking the law.
Here's the thing I think most people are missing: almost every state, city, municipality etc. in existing has laws against short term rentals. The reason for this is very clear because the issues have already been considered at the civic level. There's no reason to think that just because a platform emerged that makes this illegal behavior easier that the behavior has changed. Zoning exists for a reason. People don't want short term rentals. As far as I can tell the vast majority of AirBnB's business is illegal.
This is different from YouTube in that there is a very large legitimate use for YouTube. There is a legitimate use for AirBnB, it's just not $38B large. Asking them to make enforcement easier for externalities seems like a very reasonable alternative to heavy handed government regulation (ie: requiring short term rentals to be registered with cities, which is what cities are doing now to respond to AirBnB's lack of self-policing).
Zoning exists to separate industry from residential and also to separate middle-class households (people who can afford to use their home only for consumption, whose only animals are pets and whose only crop is grass) from the working-class (people who made income on their home by taking in boarders, growing chickens, doing home businesses, etc.) Middle-class zoning banned these working-class activities (see https://www.amazon.com/American-Nightmare-Government-Undermi...). I think it’s really tricky to separate who is harming whom in the modern day when houses are seen as an investment and there is insufficient zoning for working-class people, and where the norms of what a house is for may be changing.
You already live in this world, because Yelp exists.
Additionally, no one is saying the complaints have to be anonymous, just that one should not need to be a registered user of Airbnb. It’s an important distinction.
So maybe the right solution is simply calling the police?
I could do without the economy depending on real estate being a good investment.
When the government is primarily working on the numbers (real estate values, tax revenues from real estate) there's a perverse incentive to maximize the numbers rather than serving the needs of the entire population. SF is a great example of this--the real estate market is a disaster for the middle class, but it's fantastic for the landowners and the city. Indeed, it's in the interests of both of those aforementioned parties to drive out the middle class from the region and replace them with more wealthy buyers. The whole system depends on this happening or it risks collapse.
Money is created via bank loans. The largest bucket of loans in the US is mortgage debt -- and it's worth trillions more than any other type.
Should this source of newly minted dollars dry up, the US could very quickly fall into a liquidity crisis.
So, yeah, it's easy to shake our fists at high housing costs -- but what most people don't realize is that almost every dollar you've ever touched or earned was born in some other person's mortgage.
Non-debt based monetary systems (gold, bitcoin, etc) will result in slower growth, since developers and governments will need to wait until they can attract enough saved capital to start their projects. This is why people turn up their noses at these systems. But is slower growth really such a bad thing?
Yes and no. But it doesn't matter, since countries are competing with each other. If one decides to forgo growth, it'll lose politically and economically against those who didn't.
They're trapped, as you say, by each other. None can get off the ride before the others do. They will all need to fail together in a worldwide economic collapse, or agree unilaterally on some sort of global debt reset.
But that's not how grownups should run a planet, and it will doubtless lead to a lot of human death. It's already lead to uncontrolled growth that has damaged ecologies, fisheries, and aquifers for thousands of years to come.
Sears sold kit homes at the turn of the century (which arrived in train box cars and took 3 ~ 6 months to assemble), some which are still around today. I'd rather have something like that, which people can put together, without AirBNB doing a Google/Facebook style collection operation (I'm pretty sure they'll collect data they can sell to reduce the costs and gain a long tail profit).
has anyone made a start?
---
[1] https://www.theregreview.org/2018/06/28/schriever-uber-lyft-...
https://www.berkeleyside.com/2017/03/20/new-laws-make-even-e...
[1]: https://www.codepublishing.com/CA/Berkeley/html/Berkeley23C/...
[2]: http://library.amlegal.com/nxt/gateway.dll/California/planni...
We're actually in the process of building one right now (detached garage with ADU above), and we had to go through the Special Land Use process, which entailed paying a $2000 fee and presenting at a Planning Commission meeting. Most of the other items on the agenda were for things like a nonprofit building office space in a residential neighborhood, a large proposed housing development, and the like. Our little $185k project required the same paperwork and fee as those multi-million dollar endeavors.
IMHO, ADUs have a ton of upsides for communities with few downsides: they increase density with minimal impact to the character of the neighborhood (while we demolished a 80-year-old garage, our 102-year-old house is being left alone), enable small-scale upper-middle-class landlords, and activate underutilized space (such as replacing old functionally obsolete detached garages).
I wonder if there's a market for investors to fund ADU projects, similar to how Solar City and the like sell PV installations: the investor pays for the construction of an ADU, under the condition that they are entitled (via a deed rider) to the majority of rental earnings until the loan is paid off. This would be more complicated (and probably more risky) than the PV business—with PV you don't have to worry about vacancies, managing tenants, and the like—but I think it could work in certain markets, as long as enlightened municipalities remove unnecessary roadblocks.
[0]: https://www.airbnb.com/rooms/14378543?s=51
If they can really get the economics of scale going, this has broader implications for long term disaster relief, poverty (not extreme poverty unfortunately), refugees, and climate change migrations. Cheap, robust, and easy housing has long been a goal for architects. Bauhaus has it's roots in German communist housing for the masses, after-all.
Would prefab housing really help with poverty when the production is suddenly offshored?
Prefab backyard homes could be part of the solution - and at scale could make a big difference.
"... gains vast insight from the Airbnb community to thoughtfully respond to changing owner or occupant needs over time"
to me suggests Airbnb believes their long-term future requires more than ignoring zoning laws and city regulations; it requires changing them to suit the company's goals.
There's nothing wrong with seeking to change laws but we should really look hard at the underlying motivation. Is it to make housing cheaper/better/more plentiful or is it to increase the number of airbnb listings?
Wouldn't it make more sense to look at the effects than the underlying motivation? Why would you care what the motivation is?
Facilitate a massive organized effort to break the law using your app, then claim innocence, after all you are “just a software company” you didn’t illegally offer the ride for hire, rent your apt, and now rent an illegal dwelling.
Overall, Airbnb experience is not the same. The prices are equivalent or in certain cases more than what Hotels charge. And in most cases, you don't get the same kind of privacy/facilities that hotels provide. I stopped even looking for Airbnb unless it's a really nice place which offers some kind of experience which hotels doesn't.
You conveniently ignore the huge number of cases where its cheaper than a hotel (especially a suite for a family) and the fact that it contains a kitchen and many other time/money saving amenities
In a hundred years, architects/urban planners will easily point to this decade as the age of... something (particularly because with any change in societal values will come changes elsewhere; if this sticks, we’ll inevitably start seeing changes in house design and city planning to support it)
Can confirm a driver attempted to do this to me. He splashed a little water on his (plastic) floor mat and shredded a tiny piece of paper that had fallen out of my pocket, then reported me and attempted to charge me $45 for the cleaning.
I was furious and after a little back and forth with Uber support (which included them sending me photos the driver took of the 'spill') got my money back. He also pulled this scam before I had left a rating - he's the only Uber driver for whom I've given a 1 star rating.
Why would you give that interaction any stars at all?
I don't use Uber much; I'm mostly a Lyft person, so I'm not 100% sure how Uber does things, but here's how Lyft does it: if you open the app within 24 hours of riding with someone, it opens the rating screen, and you have to rate them in order to proceed. One star is the lowest you can rate somebody. If you want to proceed without rating them, you have to wait 24 hours before using the Lyft app. If you do, the screen goes away. It used to be that if you did this, their rating wouldn't be impacted at all; as far as the rating system is concerned, you never rode with them. But a few months ago, they changed it so that waiting 24 hours without rating someone will automatically rate them 5 stars. So if you try to give them no stars, all you'll end up doing is giving them 5 stars.
Again, I'm not sure exactly how Uber does it. I don't remember if it has the 24-hour window or if you just can't proceed at all if you never rate someone, and if it does have the 24-hour window, I don't know what happens when the window expires.
Fortunately, Lyft doesn't ban riders based on ratings, but it can negatively impact your ability to get use out of the service, as a) rating someone 3 stars or below prevents you from being matched with them again thus denying them the use of your services (and if you do this because somebody is disabled, you're probably violating the ADA), and b) it makes other drivers less likely to accept requests from you. Also, I understand that if you contact Lyft to file a complaint against an abusive driver, representatives will take your rating into account when determining whether or not to believe your word over the driver's.
I didn't use the stove/gas, and the power didn't work at all the night before this happened, it was a poor experience.
The host was great, and told me it was fine, they'd get an insurance pay out.
I was asked to provide evidence I didn't do anything, and wasn't given any information about the price of the replacement door, the extent of the damage, or why the apartment supervisor couldn't just unlock the door.
Anyways. The host sent me an image of her insurance payout from AirBnb and AirBnb asked me to pay them for the damages, so I refused, and was banned.
https://www.cover.build
So... with severe delays and rising costs?
From Cover's FAQ page (https://www.cover.build/faq):
Seems expensive to me. Isn't part of the promise of prefab lower costs?[0]: https://www.fixr.com/costs/build-single-family-house
Also to confirm what Alexis is saying about LA... We’re in the middle of our project and though we’re doing it on the cheap it’s mid 200’s per foot. Can easily see how it could be double that.
“Order today and have one permitted, built and ready to move into or lease in 6 months” sounds great. Even better if somehow an agreement with the city to expedite Cover’s builds could cut that timeframe in half because guessing the fabrication of the structure itself is very fast relative to the entitlements. Hopefully they’ve figured out a way to streamline with the city.
This is in my opinion the most significant initiative being done by any SV or YC company. By significant I mean that it promises to end a lot of market failures and disrupt a lot of big players.
At the risk of making this comment too long for casual readers, I'll elaborate:
Consider the incentives for developers. They buy and develop plots of land or existing distressed properties with the goal of bundling as many profitable sales into the same heavily subsidized financing event.
When the developer sells a property for $500K there may be $250K in the land, $100K in the structure, and another $150K in things like appliances, furnishing, HVAC, etc.
The sale is largely emotional and is driven by the way it is legal to bundle all those add-ons into the subsidized financing. This fact alone explains much about the housing bubble. The $150K worth of bundled items are worth $75K after they have been used for a week.
The buyer consents to this because it's the cheapest way to finance a luxurious lifestyle, even though it's marked up significantly. As long as the market keeps going up, the buyer doesn't get bitten by it.
Airbnb knows which parts of the financing bundle make sense for long term value and which can be most profitably leveraged when the unit is used as an Airbnb listing.
If you think of a rental property simply as an asset, you want the kitchen renovated periodically to maximize the market value of the listing. Landlords with 12 month leases, mortgage companies with 30 year mortgages, and most notably real estate brokers with <30 day commissions have no incentive to maximize any of those elements, and have plenty of incentive simply to maximize the amount financed.
Airbnb's interests align perfectly with home buyers on this, in a way that the incumbents' do not.
If this takes off at scale it will reduce profits for realtors, builders, developers, and interior decorators/furniture sellers. It's a pretty amazing opportunity that uniquely maximizes the value of Airbnb's data. Wow.
For example--I've avoided credit cards and loans in the past because I've been lucky enough to have sufficient savings and wanted to keep things simple. This means I have a sparse credit history. I've always had a steady income though, and have rented for many years without ever being so much as a single day late on a payment. Despite this, I get treated like I'm from outer space just because I haven't needed to put myself into debt.
It's just such an utterly stupid evaluation criteria. I'm provably a great tenant, but can easily get passed over in favor of someone who has a much worse record, but keeps their credit score high. With Airbnb, I am judged by my actual relevant track record--a lessor can see that again and again I fulfill my obligations and make a good impression. And of course, there's more accountability on the other side too since tenants can leave reviews.
There's just so much inefficiency they could clean up here.
Also, as a founder, I like to minimize the things I need to keep track of, and I prefer the simple financial discipline of only spending money I have in the bank. I do use a corporate credit card (Brex), but it's one that is specifically designed to be hands-off so that in practice it works more like a debit card.
Sidenote/plug: Brex is an awesome credit card for startups, and they have a far more enlightened approach to credit history than other cards, being started by two immigrant founders who couldn't get approved for anything despite having plenty of investment money in the bank. I was able to sign up and have a functioning card with decent limits in ~5 minutes. Pretty amazing. I have no connection to them btw (is that why I'm getting downvoted?), just a happy user.
I should also note that I've had multiple friends who gave me this exact advice, then ended up with thousands of dollars of credit card debt a few years later because they got carried away. No thanks. The reason these offers are made available is because cc companies know this will happen to a lot of people.
I wonder if there’s an opportunity here for a “free travel consultant” who will sign up for credit cards for you, take a cut, keep you up to date on the benefits you’ve accrued, and act as a travel agent, booking trips in a way that maximizes the value of the benefits. If done well, it might make life simpler instead of more complicated.
That really isn't necessary. I haven't paid a single cent in interest in 18 years. Get the credit card, buy a few things, pay it off and throw the card away.
If you have a business you most likely have the discipline to not be stupid.
So if you want to take a stand, use only cash.
The biggest pain point seems to be car rentals as they seem to have constantly shifting and strange rules about whether and when they accept debit cards. The next seems to be car insurance discounts as insurers seem to have strangely connected your driving risk with your credit score.
It's not very rational, since I'm perfectly happy to leave a deposit higher than some people's credit limits.
All the banks that I spoke with would concede in person that I am an extremely low risk, but they all intended to sell my mortgage on the secondary market (but still do the servicing themselves). So, they wouldn't / couldn't give a mortgage to someone who doesn't fit the "normal" boxes.
Finding a bank that was willing to not sell the mortgage took a bit.
Live within your means.
It's the same in the UK - there's a world of benefit in showing that you're able to use credit products responsibly and there is no risk or any cost if you just treat a credit card like it's a debit card.
Anyone who says 'it can't happen to me' either has very rich parents or is a fool.
Responsibly using CC isn't about "relying on future income to pay off present debt". If you have 5k in the bank, don't spend more than that, and pay it off at the end of the month (or if you're paranoid like I was right out of school, pay it off every week)
Most people don't use credit cards to borrow. The point of the credit is just to hold until the end of the next month and then pay off in one go. The point of doing that is to allow a period of time to resolve any disputes for example.
Credit cards give you extra consumer power - actual extra laws backing you up (at least where I am).
I can't understand people who don't like credit cards if they say it's not living within your means.
Other than showing some opaque credit agency that your ok for more credit.
Which ones specifically? If they are truly for free then I don't need to pay for them by virtue of having a credit card.
In the UK it's Section 75 of the Consumer Credit Act, 1974.
> Under Section 75 of the Consumer Credit Act 1974, the credit card company is jointly and severally liable for any breach of contract or misrepresentation by the retailer or trader.
> You don't have to reach a stalemate with the retailer or trader before you can contact your credit card provider - you can make a claim to both the retailer and credit card provider simultaneously, although you can't recover your losses from both.
> This right is particularly useful if the retailer or trader has gone bust, or it doesn't respond to your letters or phone calls.
> Section 75 of the Consumer Credit Act also applies to foreign transactions as well as goods bought online, by telephone or mail order for delivery to the UK from overseas.
https://www.which.co.uk/consumer-rights/regulation/section-7...
> If they are truly for free then I don't need to pay for them by virtue of having a credit card.
But law says you only get these protections if you buy on credit.
Chargebacks, protection against a stolen card, no real money being tied up during a dispute, etc.
>If they are truly for free then I don't need to pay for them by virtue of having a credit card.
Every consumer is already paying for them because business price in the credit card fees into their retail prices. If you don't get a discount for using cash/debit, you are already paying for this protection.
In the US, by not using a card, you are still paying for the benefits without getting them.
I have all of this already.
And they price the risk of a card being fraudulent, which isn't specific to credit cards.
This credit agency determines your ability to rent with a low deposit and your ability to purchase a home with a loan.
With a credit card, you've introduced a new failure mode where you can end up in debt. If you do it right, you won't, but the cc companies know that a lot of people will mess it up--that's their business model.
It's a bit like with alcohol. If you never drink, you can be 100% confident you'll never become an alcoholic. If you do drink, even a little bit, that chance goes up. Plenty of people are able to drink responsibly, sure, but I can understand wanting to avoid the possibility entirely.
But it's more dangerous than using a debit card where a stolen card ties up real money during the dispute window.
Also, you can have a credit card limit set low enough that maxing it out still means you can pay it off.
That's true--my solution to this is not keeping too much money in my checking account.
That's how people become unstuck. Very few people start off with bad intentions.
Using a credit card does not mean living outside of your means. I have used a credit card for 20ish years and have never carried a balance.
That's not living beyond your means.
On the other hand, my debit card is accepted anywhere where a credit card is.
(btw I'm in the EU, so I don't get the obsession with CC in the USA)
2% cash back on all transactions for example mean that you're essentially getting a free discount on everything.
Debit cards are the standard way of paying for stuff, and are accepted everywhere. For online shopping credit cards are used a bit more often, but payment through online banking is a lot more common.
I guess in practice the system is a bit like credit cards, because it is relatively easy to have a negative balance on your checking account. There are no overdraft fees, you just pay interest on the negative balance.
Credit is determined by a lack of a 'BKR registration', which keeps track of both existing loans and payments that you missed for previous loans. If you have no 'BKR registration', you can get approved for a mortgage, a loan or a credit card, provided you meet the income criteria.
At a minimum, you could benefit from having a credit card that you just use to pay for a monthly subscription (e.g. Netflix, Github, Patreon) and just not use it for any other expenses; stuff it in a drawer and forget about it, or physically destroy the plastic if you don't want the temptation. (Heck, you could probably even request that your credit card have a $15 limit if you want to ensure it never gets used for anything other than your Netflix subscription.)
>(btw I'm in the EU, so I don't get the obsession with CC in the USA)
I wouldn't say that Americans are "obsessed" with credit cards any more than they're "obsessed" with shampoo. Which is to say, yes, there are some people who care a great deal about hair care products and have five different bottles in their shower, but for a lot of people it's just a basic fixture of living that you're kind of expected to deal with and isn't really in people's minds. Yes, I use it every day, but I'm not a credit card enthusiast any more than I'm a shower enthusiast.
Your credit record is based on your actual payment record. Your Airbnb reputation can be easily manipulated since you can have multiple accounts and play the review game.
Not mine. It has no record of any of my past rent payments, bill payments, etc. since I paid them all on time without using debt.
My point, really, was that airbnb reviews are not a reliable measure of anyone's credit worthiness or trust other than their ability to participate in a mutual bulls..t exercise.