As far as I understand this is the latest shot in the conflict between Spain and its lack of affordable housing. I'd put the symbolic start around 2004-2006 [1] with the movement called "you won't have a house in your fucking life" where people all over Spain started demonstrating against high apartment prices.
I don't like AirBnB and I'm glad they got fined, but the Spanish government also needs to accept that they have been sitting around doing nothing for roughly 20 years. Looks like politicians all over will do everything in their power except actually building more apartments.
The main issue with going after airbnb is that its a true bandaid fix: the gains in supply are often offset by just a few years or months progression of the underbuilding of supply
I distincly recall many articles stating that for ridiculous EUR like 50k you could buy housing in spain right after 2007 the crisis, for many years afterward. Because it was so overbuilt , at least outside of the big metros) that the builders and sellers were desperate to move.
I wonder if they all wiped out by the crisis (subprime really hit spain hard), and what we are seeing now is the consequence of that wipeout, and bankruptcies.
This is not just a problem in Spain. Affordable housing is a problem in almost every Western metro, both in the US and in Europe. The problem is caused by the financialization of real estate.
I know it's always been a bit of a financial asset, but the past 40 years have really seen this accelerate to pretty crazy levels. The issue, when you boil it down to the basics is: wealthy folks, development companies, overseas oligarchs, hedge funds, etc. owning many properties where they try to extract as much value as possible. This means that rents go up and short-term-rentals become more viable. This also means that young middle-class families can't afford to purchase or to live there, so it pushes out locals (this is especially bad in Lisbon).
The solution seems to be government telling you what you can or you can't do with your private property, which does not sit well with me, but it's becoming more and more clear that this can't go on forever.
I was in Spain this past summer and it certainly seems they are experiencing tourist burnout. I saw anti tourist messages on banners hung on buildings, graffiti, posters and stickers in Madrid and Barcelona. Some of it was a bit threatening but I had zero issues.
The issue of airbnb is a sticky one. On one hand, being able to temporarily live in an apartment greatly enhances the immersiveness when your travel - you get to feel like a local and experience life in another place. Hotels suck as they cut corners to the point where an article posted here complaining about the lack of bathroom doors in hotels. On the other hand, these rentals drive up real estate prices and drives out locals. And often these rentals are in run-down low-income turning affordable yet poor quality housing into high quality temporary rentals. This drives out low income residents deepening income inequality issues while subjecting them to the threat of homelessness.
As long as we tolerate a society that only values ROI while ignoring the value of investing in humanity we won't resolve any of these issues. In a better world we would think about others and realize that easy access to shelter is foundational to stabilizing people to enable them to succeed in life. It's not hard, we have an abundance of materials and labor yet we have built a culture where helping others is some form of weakness for both parties.
This burden is on politicians. If you can extract enough value from tourism you both lessen the tourism and get people more happy about tourists.
The monetary value has to match the damage it does to have people caring less about the “environment” they are in (gossip puts pressure on people to behave, just like renting puts less pressure on people to take care of their apartment).
Georgism is the only long-term solution to this problem. It's not like there is even disagreement on that; any economist would tell you so.
However, the Landed gentry have no interest in solutions.
I was recently evicted from my apartment in a city in Norway experiencing similar growth in short-term rentals. The rental on that apartment was around €750 (same for my roommate). Apparently, during high season in the winter similar apartments goes for ~€830 a night. High season is 3 months in the winter, but seemingly that is enough to outcompete longterm tenants.
The main issue with Airbnb is that a few companies own a huge percentage of the flats. It's a big, unregulated, industry without any responsibility that is driving regular hotels out of business and locals out of their neighbouhoods. Of course it has to end at some point.
AirBnB should be banned, and I say that as a very pro-capitalist guy.
In an economy where there is a housing shortage local population needs affordable and long-term (6-months+) rental contracts or they don't have stability.
Capitalism is great in general, but some things, such as healthcare, housing, electricity,... needs to have a stronger regulatory framework then eg TVs since the collapse of basic human necessities creates chaos and eventually becomes the foothold of extreme socialist/communist political parties which then finish the job of destroying the economy.
Good. How could these "disruptive" american companies get away with violating local laws that long remains a mystery to me. If I started running an illegal hotel in Barcelona, or a website advertising for illegal rentals in the same city, myself, from Spain, I'd be quickly arrested and thrown in jail as an individual...
I live in Spain. I'll give you an interesting example I've witnessed.
Two of my neighbors rent seasonally on airbnb. Middle class women, one of them a widow. I assume they used to make a tidy profit. I believe they worked quite hard on making those houses pretty, and I've seen they had good reviews.
Just now their license to operate has been denied, apparently without much explanation (I believe the Property Registry is making the decision, this is a bureaucratic body of state employees, not democratically elected).
Across the street lies a hotel, a true tourist trap. They have a 6/10 rating on booking and rely on scamming British tourists, whom you can see balancing drunk on their balconies daily. It's owned by a national conglomerate.
As you may guess, as of now the airbnbs are closed and the hotel is thriving despite only bringing the worst kind of tourist to the community.
An astute observer will note that the hotel industry is one of the biggest lobbyists supporting the current government at a national level.
I am not one to defend big companies, but for some people here Airbnb was freedom. Now they have to go work cleaning rooms or just collect retirement checks, as obtaining a license to run a hotel is impossible without political connections / corruption.
My point is, not everywhere are laws as fair as in the United States.
Before someone talks about housing pressure, this is a relatively out of the way area where 40% of houses sit empty most of the year.
I have legal holiday rentals on two properties in Spain, but they are managed by an specialized company:
* The regional administration handed out licenses without problems until a year ago, even when everyone was complaining already about these rentals. It was just paperwork + fee to get the license. They did for years and now they wonder why there are so many flats: they allowed it.
* The main issue these rentals cause to the neighbors is people partying, being noisy, inconsiderate. Rentals have rules against these behaviors yet they happen frequently. I wish we or the police had tools to legally kick people out in the middle of the night for this behavior.
* Apart from legal rentals, which are being limited now, there are a lot of illegal rentals. They are only starting to crack down on them. AirBNB and others have not complied with the law and this should not come as surprise. They have actively enabled illegal businesses for years. People go to jail for that and they should shut them down.
* There is no affordable housing in the city-center. Rental flats make it worse but in many places the issue will not be fixed if they disappeared. The causes are deeper and a nice flat is not going to become "cheap" to rent in any case.
* Holiday rentals are a bit more profitable that long-term rentals, but not crazy unless you are doing it at scale and they come with their own problems. Many are switching now to "seasonal" rentals, which are rentals for a period less than a year and the tenants need to go then. They forgot to handle these in the new regulations. Long-term rental is problematic because you can't use your flat when you need it. i.e. if you have a flat that you come to spend your own holidays. So people in that situation have limited alternatives.
* I am personally not against switching to long term rentals, but the current situation wrt. licenses etc. puts me in a "wait and see" mode. My flat is legal, so they might make it more profitable by cracking down on illegal ones. Once I put a long-term rental I cannot ever go back to vacation rental either. There is little incentive to switch right now, but I will of course do it if I'm legally required to do so. For all the talk, they haven't taken that step, which is a testament to how politicians can say one thing and then do close to nothing in the end.
... because the government is in the pocket of the big hotel chains, which are ruining the country.
Airbnb: World travelers who try to blend in.
Hotel: Drunk Brits who puke all over the place.
We have 3 Airbnb flats in our house for 2 years now.
Never had an issue with any of the renters;
But, the lights in the stairwell are working now,
the door locks work, electricity is stable, and I haven't seen a cockroach in a long time.
Meanwhile the guests from the hotel across the street keep us awake every freakin' night.
Bonus:
Those 3 flats had been sitting empty for nearly 10 years, just like the other ~30 thousand flats sitting empty in the city.
22 comments
[ 26.3 ms ] story [ 1000 ms ] threadI don't like AirBnB and I'm glad they got fined, but the Spanish government also needs to accept that they have been sitting around doing nothing for roughly 20 years. Looks like politicians all over will do everything in their power except actually building more apartments.
[1] https://www.leonidasmartin.net/artes/no-vas-a-tener-una-casa... (in Spanish)
I wonder if they all wiped out by the crisis (subprime really hit spain hard), and what we are seeing now is the consequence of that wipeout, and bankruptcies.
I know it's always been a bit of a financial asset, but the past 40 years have really seen this accelerate to pretty crazy levels. The issue, when you boil it down to the basics is: wealthy folks, development companies, overseas oligarchs, hedge funds, etc. owning many properties where they try to extract as much value as possible. This means that rents go up and short-term-rentals become more viable. This also means that young middle-class families can't afford to purchase or to live there, so it pushes out locals (this is especially bad in Lisbon).
The solution seems to be government telling you what you can or you can't do with your private property, which does not sit well with me, but it's becoming more and more clear that this can't go on forever.
The issue of airbnb is a sticky one. On one hand, being able to temporarily live in an apartment greatly enhances the immersiveness when your travel - you get to feel like a local and experience life in another place. Hotels suck as they cut corners to the point where an article posted here complaining about the lack of bathroom doors in hotels. On the other hand, these rentals drive up real estate prices and drives out locals. And often these rentals are in run-down low-income turning affordable yet poor quality housing into high quality temporary rentals. This drives out low income residents deepening income inequality issues while subjecting them to the threat of homelessness.
As long as we tolerate a society that only values ROI while ignoring the value of investing in humanity we won't resolve any of these issues. In a better world we would think about others and realize that easy access to shelter is foundational to stabilizing people to enable them to succeed in life. It's not hard, we have an abundance of materials and labor yet we have built a culture where helping others is some form of weakness for both parties.
The monetary value has to match the damage it does to have people caring less about the “environment” they are in (gossip puts pressure on people to behave, just like renting puts less pressure on people to take care of their apartment).
Wow, it looks like unbridled capitalism isn't the answer after all.
In an economy where there is a housing shortage local population needs affordable and long-term (6-months+) rental contracts or they don't have stability.
Capitalism is great in general, but some things, such as healthcare, housing, electricity,... needs to have a stronger regulatory framework then eg TVs since the collapse of basic human necessities creates chaos and eventually becomes the foothold of extreme socialist/communist political parties which then finish the job of destroying the economy.
Across the street lies a hotel, a true tourist trap. They have a 6/10 rating on booking and rely on scamming British tourists, whom you can see balancing drunk on their balconies daily. It's owned by a national conglomerate. As you may guess, as of now the airbnbs are closed and the hotel is thriving despite only bringing the worst kind of tourist to the community. An astute observer will note that the hotel industry is one of the biggest lobbyists supporting the current government at a national level. I am not one to defend big companies, but for some people here Airbnb was freedom. Now they have to go work cleaning rooms or just collect retirement checks, as obtaining a license to run a hotel is impossible without political connections / corruption. My point is, not everywhere are laws as fair as in the United States. Before someone talks about housing pressure, this is a relatively out of the way area where 40% of houses sit empty most of the year.
* The regional administration handed out licenses without problems until a year ago, even when everyone was complaining already about these rentals. It was just paperwork + fee to get the license. They did for years and now they wonder why there are so many flats: they allowed it.
* The main issue these rentals cause to the neighbors is people partying, being noisy, inconsiderate. Rentals have rules against these behaviors yet they happen frequently. I wish we or the police had tools to legally kick people out in the middle of the night for this behavior.
* Apart from legal rentals, which are being limited now, there are a lot of illegal rentals. They are only starting to crack down on them. AirBNB and others have not complied with the law and this should not come as surprise. They have actively enabled illegal businesses for years. People go to jail for that and they should shut them down.
* There is no affordable housing in the city-center. Rental flats make it worse but in many places the issue will not be fixed if they disappeared. The causes are deeper and a nice flat is not going to become "cheap" to rent in any case.
* Holiday rentals are a bit more profitable that long-term rentals, but not crazy unless you are doing it at scale and they come with their own problems. Many are switching now to "seasonal" rentals, which are rentals for a period less than a year and the tenants need to go then. They forgot to handle these in the new regulations. Long-term rental is problematic because you can't use your flat when you need it. i.e. if you have a flat that you come to spend your own holidays. So people in that situation have limited alternatives.
* I am personally not against switching to long term rentals, but the current situation wrt. licenses etc. puts me in a "wait and see" mode. My flat is legal, so they might make it more profitable by cracking down on illegal ones. Once I put a long-term rental I cannot ever go back to vacation rental either. There is little incentive to switch right now, but I will of course do it if I'm legally required to do so. For all the talk, they haven't taken that step, which is a testament to how politicians can say one thing and then do close to nothing in the end.
Airbnb: World travelers who try to blend in. Hotel: Drunk Brits who puke all over the place.
We have 3 Airbnb flats in our house for 2 years now. Never had an issue with any of the renters; But, the lights in the stairwell are working now, the door locks work, electricity is stable, and I haven't seen a cockroach in a long time.
Meanwhile the guests from the hotel across the street keep us awake every freakin' night.
Bonus: Those 3 flats had been sitting empty for nearly 10 years, just like the other ~30 thousand flats sitting empty in the city.