Well, ok, hotels are more expensive now, but are houses and long term rentals any cheaper? Was the ban successful at improving housing affordability for the people who live there? The article doesn't seem to discuss that at all.
What? Why would I? I don't live there but genuinely want to know. It's a thing that affects many other desirable cities too, and short term housing bans are discussed often. I'd like to know how well it does or doesn't work and what variables contribute to it.
The problem is that no one has the courage to run a controlled trial to isolate the effect of banning short term rentals. Best you'll get is some natural experiments where you pretend you can compare NYC and Hoboken.
They certainly made it impossible to plan a trip to NYC with more than 2 people if that's what they were aiming for.
I had previously been planning yearly trips to visit NYC with friends. For the last 3 years with Airbnb and I was booking 2-4 bedroom places for between 3-6 people. The cost per person per night jumped from ~$75-150 to $150-250 depending on the week. :-O
That sounds more expensive, but not impossible. Frankly, that's how much I used to pay for a room in Manhattan before AirBnB existed. I chalked it up as the reality of booking in the most populated city in the world.
More pedantry:
Population density would make more sense in this context, but it's also not true. It's the most densely populated major city in the US, but that's definitely not the world.
Per the same article, by city limits NYC is #18 out of 81, by urban area it's #74, and by metropolitan area it's #19. Densely populated, but it's no Mumbai - which, no matter how you measure it, eclipses NYC in both population and population density.
I've only ever booked the Airbnbs in Brooklyn before. (We usually try to visit friends in Williamsburg/Greenpoint/Bushwick) Hotels in those neighborhoods are easily $300-500 per night for a queen bed on a weekend.
The alternative of midtown/queens hotels are typically still $200-300, but cost more in travel time/expense.
My gripe here is mainly that before I could plan an outing for group and we could all live in the space and have common areas for eating/relaxing. Even if hotels were the same price, they still are a worse experience than staying in a house/apartment with friends.
It does, both in the title here, and in the article's title. "Only" is clear, and "All that's done so far is make hotels more expensive" from the article title, is also exceptionally clear.
I don't think this is the strength of evidence you seem to think it is. I would like to see some actual data and analysis, not just a throwaway clickbait headline.
The article’s premise is flawed. Banning Airbnbs obviously won’t reduce housing costs; rather, it aims to prevent even further price increases. One study confirms this link[0], but it’s unclear whether the effect size is meaningful.
Why is it obvious getting rid of Airbnb won't reduce housing costs? All else being equal, it could increase supply if the hosts are holding on to them only for renting. Increase supply = reduce cost, no?
Edit, and by cheaper, I mean less than they would be otherwise. Maybe that's the confusion I'm having.
Strictly speaking, the word "only" isn't in the original title (it was editorialized to fit the character limit). And the article barely discusses the effect on housing costs, this is the one paragraph devoted to it and it comes down to "further research needed":
But Airbnb and other critics say the near-ban won't do much to address the housing crisis and will hurt homeowners who relied on the rental income and visitors who couldn't afford sky-high hotel costs. There is a slew of factors — including new housing construction and migration patterns — that impact housing costs and vacancy rates. But there's some evidence, including from Irvine, California, that restricting short-term rentals can reduce rents. It's not clear how much of a role LL18 has played so far in changing these conditions.
Strictly speaking, the word "only" isn't in the original title.
I listed two title snippets, said which was from the article, and said one was from here. That's exceptionally clear.
From what I replied to:
Well, ok, hotels are more expensive now, but are houses and long term rentals any cheaper? Was the ban successful at improving housing affordability for the people who live there?
These questions are answered, as I specifed, by the title.
You.may not like the lack of detail, but that was not the criticism I responded to.
That is what the article's author seems to think, but they give zero evidence for it. The criticism you responded to was The article doesn't seem to discuss that at all. -- and it doesn't. All it does is concede ignorance on the topic.
OP would have been more prudent, if that was the real question, to say "Provides no evidence". It's OK for an article to focus on one thing, in this case, hotel pricing.
I would also like to know the impact on the quality of housing left in the city. Short term rentals like Airbnb incentivize owners to update their properties. Long term rentals combined with rent control laws do the opposite.
You'd need to do more math than that: has the rate of change in prices of those things decreased?
It could be more 10% more expensive but previously would've gotten 15% more expensive, for instance.
And of course even that is trivializing it: there have been outside factors that would also affect the baseline trend in the price of housing for the last 5-10 years, so it could be tough to measure against it.
The authors of the article don't really try: "it's not clear whether the near-ban is achieving one of its central goals: relieving pressure on the city's severe housing shortage."
Only building more housing will make housing cheaper.
It's remarkable how some cities will do literally anything but that, probably because they know it will work and they're controlled by property owners.
True, but while they're not building more housing at least in this case they're making it so the people who do have a house to live in don't have to contend with it being surrounded by hotels.
That would make buying houses cheaper, but would probably make housing in general more expensive- and less accessible to people that can’t get or afford a home loan. Ultimately if there is too much demand, nothing but more supply will make housing affordable.
More housing only slows the rate of housing inflation. Making housing affordable means raising wages or subsidizing rent so that worker rental costs 1/3 of their wages.
"Affordable" housing is not a magic number; it's a ratio as defined by financial "experts." It's usually one-third of your net or gross income, depending on the advisor you talk to.
Supply and demand is the main factor that affects the price of anything. No amount of subsidies, wage changes, etc. will have any effect on a physical problem of having not enough houses for the population in an area. If you subsidize rent or raise wages that will further increase demand and make prices go even higher.
Think of an extreme example- take a town with 20k families and only 10k houses. Now setup some program where many of those houses are part of an affordable housing program with a price cap. This changes basically nothing because only a few lucky people will get them, the rest will still be unhoused or move. This is literally the exact situation in most small USA west coast college towns like Davis- where the city government will do anything to make housing more affordable except construction- and we can see that none of it works.
I was using the standard English language definition of the word affordable, which is qualitative and has no specific quantitative definition.
I was using the economist's definition of affordable housing, which is that only 1/3 of your income is consumed by housing. If a term isn't quantifiable, then it's useless for making plans.
You are right that if there is a market where the scarcity is caused by insufficient supply, building more slow costs increases. But there is a point where the costs of the product cannot be cut anymore. The more you produce it will not be cheaper.
Let's take another extreme example. Start with the city of 10,000 people. A developer razes the city center and rebuilds with very dense housing capable of housing 10,500 people. Is the cost of housing cheaper because of those extra 500 units? The answer is no; they would increase the cost of all the other units. Why? Someone has to pay for the materials, labor, and profit. If someone is not renting those units, the cost of creating those units is now spread among all the other units.
The core question is how to lower the cost of the unit. Building more once you satisfy demand is not the answer. Building more expensive units frees up cheaper units if and only if enough people can afford them and move into them. But the cheaper units are not going to drop in cost. They will rent for at least the same price.
It's important to acknowledge a couple of truisms. Demand for urban space will grow, and landlords will do everything to minimize expenses and maximize profits. There will never be enough housing to meet the demand. The question is how far behind demand is the housing production rate
You are right that prices can't fall forever with supply and demand, there is a floor of the actual cost of the supply- but the cost of construction is nil compared to the prices houses sell for in high demand areas like the SF Bay area. Once you have a situation where, e.g. the cost of construction labor to build a house is a major fraction of the price of a house, logically- someone doing construction labor could themselves afford a house in that area. We're so far from something like that, that arguing about how to make housing even cheaper than that in theory is a red herring.
I don't agree at all that "there will never be enough housing to meet the demand." There was enough in the past when populations were lower, and wealthy nimby landowners blocked construction from keeping up with population growth- you don't need that much more to just catch up with growth. It's also very regional- there are many places where supply radically exceeds demand, mostly because there aren't jobs. Much of the rural USA has nice houses that sit on the market for years at low prices because populations in those areas are declining.
Housing could be way cheaper if innovation were legal in housing... there are a lot of creative ideas to radically reduce materials and labor required, but they are also completely illegal with building codes in most places. So you get a situation where something like Fuller's Dymaxion House would be criminal because building codes say the HVAC system is undersized or something (because it's more efficient and doesn't need more), but in practice you have people living in highly flammable plywood and PVC shanty towns on every corner. If you consider the illegal shanty towns and homeless camps, supply already meets demand, you really just need to make it legal to build low cost housing that meets a minimum standard of safety to replace the shanty towns with something safer but still cheap.
Even if more housing is built, I see some areas that are purposefully optimizing for short term rentability, meaning building luxury vacation homes in resort-like areas, instead of generic housing for the masses.
More housing doesn't necessarily mean more affordable housing. And I don't even mean section 8, just units that two median wage earners (outside of tech) could potentially afford together.
Not just that but I also resent the fact that many modern apartment buildings are "luxury" apartments that come with a gym, a pool, a coworking space, a garden and whatnot. I don't care about these amenities. Renting these places makes me think I'm wasting part of my rent on these amenities that I'll never use.
But actually, it does, because more housing supply (even on the high end) means fewer higher earners are forced to bid up generic housing for the masses.
On the other hand, refusing to build any housing at all (for whatever the reason is: too unaffordable, too gentrified, too out-of-place) means those high earners will live in generic housing for the masses, and those places will be expensive.
There’s this tacit myth that it’s possible for the lower end homes to get cheaper while, simultaneously, the middle/high end homes continue their regular 6% (or more) YoY gains (on which owners’ financial health depends).
I think this belief gives hope that affordability can improve even without new inventory.
In reality, the entire stock (low to high) moves lock/step as if they are chained together. Gaps cannot exist because buyers will eagerly move a little up or down (in quality) based on pricing changes.
If you want it cheaper - not just to make a dent in the curve - "building more housing" is no guarantee by itself. You need to actually outpace moneyed demand! Most of the places that are the most expensive are the ones that HAVE built the most housing in the past (look at density vs cost).
And developments happen in order to increase value of land and demand for that land, so it's not necessarily trivial. (For instance: people with money go to new suburbs because the units of housing are larger and more upgraded; new in-city units are built that are larger and more upgraded than the old one -> some of those people want to move back. And hundreds of other little interplaying loops of human activity.)
It's pretty trivial actually. You can'y just build 50 apartments and call it a day. You have to build way, way, way more housing.
Is the scale of it complicated? Absolutely. But the solution itself is simple. Double the size of the city. Triple the size of the city. 10x the size of the city. Shenzhen can show you how it's done.
Shenzhen has some of the most expensive housing in China if not the world.
Also, I agree more housing is necessary. But building more housing also risks induced demand. Cheaper houses encourages people to move to buy them. Therefore, we probably would need to also restrict demand, either with a hard limit (max properties you can own) or more likely with a soft limit (2nd property is taxed 2x, 3rd is taxed 3x etc).
Somehow people can understand the supply and demand mechanics when it comes to banning Airbnb but suddenly that understanding disappears when it comes to building more supply.
It's more like both airbnb and migrant sheltering move prices in the direction one would expect but they are so small as to be rounding errors in effect since there's around 8 million housing units in the city vs maybe 40k airbnb listings. The real story is people want to live in NYC and NYC is doing a combination of underbuilding due to bad city regulation slowing redevelopment processes down and causing rental units to sit empty because of foolish city regulation around rent stabilization making it more profitable to just sit on an empty unit than to spend money on repairs and rent at the stabilized price (also the city is utterly failing to maintaining their almost half a million units of low cost housing). So instead of fixing the problem (getting rid of rent stabilization on units that are sitting empty if they are renovated to code to unlock the 10-20k units sitting vacant for this reason, repairing their low cost units, getting out of the way to bring the embarassingly low ~30k units built annually to a multiple of that) They screw over airbnb's to hurt tourism and maybe slow rent appreciation for a quarter or two.
> it's not clear whether the near-ban is achieving one of its central goals: relieving pressure on the city's severe housing shortage
Shame on Business Insider for running a headline that contradicts the article. And shame on the authors for not even investigating the issue at all. You can pretty easily check the effect simply by comparing the change in rental prices in NYC to those in places that didn’t ban Airbnb. Maybe Boston, a nearby city.
That's because regulations do not work, socialism does not work, communism does not work, how many times should these mistakes be made? Only working policy is a free market, competition and full deregulation.
Another thing that has happened is that there are a lot of hotels are operating as migration shelters. I've heard something like 15% of hotel rooms aren't on the market for that reason, and those rooms would have skewed toward the more affordable end of the spectrum.
Also, regarding rents not going down. According to the MNS report for Manhattan [1], non-doorman studios are down ~1.2% from last year, and non-doorman one-bedrooms are up only ~.6%. Those are exactly the types of units that were commonly being set up as full-time Airbnbs. Also, Airbnbs were especially concentrated in neighborhoods that did see large drops in rents, like EV and Soho, so maybe it did have an impact.
I would imagine the rent cartel folks had a block in place to keep NYC rents from dropping when all the Airbnbs eventually hit the market, and I bet NYC is collecting evidence from rents following this event to use against them.
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[ 2.0 ms ] story [ 84.9 ms ] threadI had previously been planning yearly trips to visit NYC with friends. For the last 3 years with Airbnb and I was booking 2-4 bedroom places for between 3-6 people. The cost per person per night jumped from ~$75-150 to $150-250 depending on the week. :-O
Have you tried Queens or Brooklyn?
Sorry for being pedantic but I believe this isn't really true.
New York ranks 11th in the world [0], it's not even the most populated in the Americas, nor 2nd.
[0] https://en.wikipedia.org/wiki/List_of_largest_cities
The alternative of midtown/queens hotels are typically still $200-300, but cost more in travel time/expense.
My gripe here is mainly that before I could plan an outing for group and we could all live in the space and have common areas for eating/relaxing. Even if hotels were the same price, they still are a worse experience than staying in a house/apartment with friends.
Something the post I directly replied to showed confusion about.
[0]: https://marketing.wharton.upenn.edu/wp-content/uploads/2019/...
Edit, and by cheaper, I mean less than they would be otherwise. Maybe that's the confusion I'm having.
But Airbnb and other critics say the near-ban won't do much to address the housing crisis and will hurt homeowners who relied on the rental income and visitors who couldn't afford sky-high hotel costs. There is a slew of factors — including new housing construction and migration patterns — that impact housing costs and vacancy rates. But there's some evidence, including from Irvine, California, that restricting short-term rentals can reduce rents. It's not clear how much of a role LL18 has played so far in changing these conditions.
I listed two title snippets, said which was from the article, and said one was from here. That's exceptionally clear.
From what I replied to:
Well, ok, hotels are more expensive now, but are houses and long term rentals any cheaper? Was the ban successful at improving housing affordability for the people who live there?
These questions are answered, as I specifed, by the title.
You.may not like the lack of detail, but that was not the criticism I responded to.
The title says "no, not cheaper".
OP would have been more prudent, if that was the real question, to say "Provides no evidence". It's OK for an article to focus on one thing, in this case, hotel pricing.
You'd need to do more math than that: has the rate of change in prices of those things decreased?
It could be more 10% more expensive but previously would've gotten 15% more expensive, for instance.
And of course even that is trivializing it: there have been outside factors that would also affect the baseline trend in the price of housing for the last 5-10 years, so it could be tough to measure against it.
The authors of the article don't really try: "it's not clear whether the near-ban is achieving one of its central goals: relieving pressure on the city's severe housing shortage."
AirBnB is located in SF is it not? So so some of the profits flow from NYC to SF.
I get it that hotels too are not Head quartered in NYC so profits leave the city too.
But why support housing for financial gain?
It's remarkable how some cities will do literally anything but that, probably because they know it will work and they're controlled by property owners.
This debate ends in the same way as always. It's a bit of everything. Nightly rentals, REITs, build more, yada yada yada...
"Affordable" housing is not a magic number; it's a ratio as defined by financial "experts." It's usually one-third of your net or gross income, depending on the advisor you talk to.
Think of an extreme example- take a town with 20k families and only 10k houses. Now setup some program where many of those houses are part of an affordable housing program with a price cap. This changes basically nothing because only a few lucky people will get them, the rest will still be unhoused or move. This is literally the exact situation in most small USA west coast college towns like Davis- where the city government will do anything to make housing more affordable except construction- and we can see that none of it works.
I was using the standard English language definition of the word affordable, which is qualitative and has no specific quantitative definition.
You are right that if there is a market where the scarcity is caused by insufficient supply, building more slow costs increases. But there is a point where the costs of the product cannot be cut anymore. The more you produce it will not be cheaper.
Let's take another extreme example. Start with the city of 10,000 people. A developer razes the city center and rebuilds with very dense housing capable of housing 10,500 people. Is the cost of housing cheaper because of those extra 500 units? The answer is no; they would increase the cost of all the other units. Why? Someone has to pay for the materials, labor, and profit. If someone is not renting those units, the cost of creating those units is now spread among all the other units.
The core question is how to lower the cost of the unit. Building more once you satisfy demand is not the answer. Building more expensive units frees up cheaper units if and only if enough people can afford them and move into them. But the cheaper units are not going to drop in cost. They will rent for at least the same price.
It's important to acknowledge a couple of truisms. Demand for urban space will grow, and landlords will do everything to minimize expenses and maximize profits. There will never be enough housing to meet the demand. The question is how far behind demand is the housing production rate
I don't agree at all that "there will never be enough housing to meet the demand." There was enough in the past when populations were lower, and wealthy nimby landowners blocked construction from keeping up with population growth- you don't need that much more to just catch up with growth. It's also very regional- there are many places where supply radically exceeds demand, mostly because there aren't jobs. Much of the rural USA has nice houses that sit on the market for years at low prices because populations in those areas are declining.
Housing could be way cheaper if innovation were legal in housing... there are a lot of creative ideas to radically reduce materials and labor required, but they are also completely illegal with building codes in most places. So you get a situation where something like Fuller's Dymaxion House would be criminal because building codes say the HVAC system is undersized or something (because it's more efficient and doesn't need more), but in practice you have people living in highly flammable plywood and PVC shanty towns on every corner. If you consider the illegal shanty towns and homeless camps, supply already meets demand, you really just need to make it legal to build low cost housing that meets a minimum standard of safety to replace the shanty towns with something safer but still cheap.
More housing doesn't necessarily mean more affordable housing. And I don't even mean section 8, just units that two median wage earners (outside of tech) could potentially afford together.
On the other hand, refusing to build any housing at all (for whatever the reason is: too unaffordable, too gentrified, too out-of-place) means those high earners will live in generic housing for the masses, and those places will be expensive.
I think this belief gives hope that affordability can improve even without new inventory.
In reality, the entire stock (low to high) moves lock/step as if they are chained together. Gaps cannot exist because buyers will eagerly move a little up or down (in quality) based on pricing changes.
And developments happen in order to increase value of land and demand for that land, so it's not necessarily trivial. (For instance: people with money go to new suburbs because the units of housing are larger and more upgraded; new in-city units are built that are larger and more upgraded than the old one -> some of those people want to move back. And hundreds of other little interplaying loops of human activity.)
Is the scale of it complicated? Absolutely. But the solution itself is simple. Double the size of the city. Triple the size of the city. 10x the size of the city. Shenzhen can show you how it's done.
Also, I agree more housing is necessary. But building more housing also risks induced demand. Cheaper houses encourages people to move to buy them. Therefore, we probably would need to also restrict demand, either with a hard limit (max properties you can own) or more likely with a soft limit (2nd property is taxed 2x, 3rd is taxed 3x etc).
https://www.nytimes.com/2024/05/25/nyregion/hotels-prices-mi...
> Axel Springer, Insider Inc.'s parent company, is an investor in Airbnb.
Won't anyone think of the poor AirBnB investors!?
Shame on Business Insider for running a headline that contradicts the article. And shame on the authors for not even investigating the issue at all. You can pretty easily check the effect simply by comparing the change in rental prices in NYC to those in places that didn’t ban Airbnb. Maybe Boston, a nearby city.
This just hands control from an elected government over to whomever has the most money.
Also, regarding rents not going down. According to the MNS report for Manhattan [1], non-doorman studios are down ~1.2% from last year, and non-doorman one-bedrooms are up only ~.6%. Those are exactly the types of units that were commonly being set up as full-time Airbnbs. Also, Airbnbs were especially concentrated in neighborhoods that did see large drops in rents, like EV and Soho, so maybe it did have an impact.
1. https://www.mns.com/manhattan_rental_market_report