How Airbnb accidentally screwed the US housing market and made $100 billion

They didn't accidentally do shit. They ignored the consequences of their decisions for profit at the expense of everyone else. You don't get to make $100 billion dollars and feign ignorance about how you got it and the damage you caused to obtain it.

I still think municipalities share a significant amount of blame here. They definitely could have at least limited vacation rental saturation, and didn't do anything.

I live in a ski town, and have been to city hall meetings on this issue. The overwhelming amount of attendees at these are vacation homeowners or their representatives, and the prevailing attitude is, "fuck the locals, our profit is at stake here." A number of owners have changed their primary residence to our town just to have more say that local long term renters. These meetings are held at 2pm, when locals are working. It's about as fucked as it can get. And when we've had a sympathetic council person, they're immediately recalled or replaced the following election cycle. It's a shitshow.

During COVID, when the Airbnb boom really took off, we had a 25% resident attrition rate. That's no typo; twenty five percent of our valley's residents had to leave town because they were priced out (about 5000 in a population of 20,000) because either rents skyrocketed, or the owners of their homes sold out from beneath them. These days, much of our local labor force commutes at least an hour into town. It has gotten a little better, and some have been able to moved back, but the damage is done.

Even for prospective buyers, like my wife and I, prices are outrageous. Our current home, which is valued around $600k, would have been $200k pre COVID. And this is solely because of Airbnb assholes.
- My office regulates airbnbs for the city and it's very hard to do anything about it. None of the rental platforms will work with us - we've sent them about a million notices that they're collecting the wrong tax amount and they don't even bother to respond, and they just send a check every quarter but refuse to break it out by address/owner. They won't provide any data on what addresses are being rented, either. Apparently some other cities have successfully sued airbnb, but for a small city with a correspondingly small budget, that's an expense that's hard to justify to taxpayers.
  
  We have some owners that are great - they get licensed right away, get their inspections done, no problem. Then there are other people who have done things like dig out their crawlspace themselves and turn it into non-conforming bedrooms with no egress windows - no permits or inspections, of course, and an engineer basically said the entire thing was in danger of collapsing any minute. Or the person who had a buddy do a bunch of unlicensed electrical work that was so bad the city couldn't even let the owner stay there until it was fixed. I honestly wouldn't stay in an airbnb now, having seen what I've seen - people will absolutely put renters at risk to make a buck. And we can go after them but only if we know it's happening.
  
  I'd personally love it if rental platforms were forced to provide owner data to cities/states, and for cities to tax the shit out of rentals that aren't also owner-occupied, but I'm not in charge and the people with money have a vested interest in making sure that doesn't happen. It sucks.
- Visiting my husband's home town where this has happened and all his parent's friends have moved into trailers because the houses where they raised their kids were bought for insane amounts but then they couldn't afford a smaller house in the same town. Where we live now on the East Coast, we can no longer stay in our school district for less than half a million because doctors from larger urban areas keep buying the houses in our school district and we're being forced 60+100 miles out from my hometown where we raised our young kids to even begin to afford housing.
- The government just doesn't work for the people anymore. It works for the donors that fund them.
You don't get to make $100 billion dollars and feign ignorance about how you got it and the damage you caused to obtain it.

Don't you? I can't think of any instance of justice truly being served to billionaires, can you?
- SBF recently and Madoff before him.
...decisions for profit at the expense of everyone else.

-The American Dream™
They are a company with zero morals and the goal to maximize profits. That's what capitalism is for and were it's good at.

The government needs to create rules and laws to make sure that this profit maximizing doesn't happen on the back of ordinary people, but since corporate america is allowed to control the government through money, this doesn't happen.

Capitalism is a tool, can we please start to use it like that again?!
- the problem is already in the word itself.. capitalism
  
  aka to capitalize on someone else's problems\misfortunes

Accidentally? Man these writers will suck any corporate dick.

Yeah, real hard-hitting journalism here from... arktrek.shop?
The guy seems to rehashing news (probably with AI) and posting it on his ad filled blog for clicks. Check his profile.

“accidentally” 🤦‍♂️

It was - and is - entirely fucking intentional.

Big tech - move fast, break things, disrupt, and destroy

Like kudzu
- or feral swine
- Southerner here. FYI, kudzu is nowhere near as bad as this big tech shit. It doesn't actually engulf entire forests; it just looks like it does because it covers the edges of them and that's mostly the part that people see.
Mostly profit though.
- Forgot the opportunity cost.

US policymakers screwed themselves with crappy urban planning, leading to insufficient housing supply and bad transit options. Blaming AirBnB for high housing prices is like setting up a chain of dominos, and criticizing a guy who comes by and knocks it over. If it wasn't him, it would have been someone else, or the wind.

This is happening worldwide. It has very little to do with urban planning and more with lax homeownership restrictions that allows the wealthy and corporations to scoop up housing supply for profit.
- "The wealthy and corporations" have choices of how to invest their money. If housing supply is sufficiently elastic to meet demand, they'll find somewhere else other than housing to put their money. Ain't nobody trying to corner the Chinese real estate market in 2024, for instance (*).
  
  There are a few places where land shortages genuinely constrain housing supply, like Singapore and Hong Kong. But the US has tons of land; things are simply not well optimized. That, plus high interest rates due to fiscal/monetary mismanagement.
  
  (*) Not saying the Chinese real estate market is worth emulating.
- It's both.
  
  An example of bad urban planning is low density urban sprawl, which requires lots of resources for few housing units.
  
  Less housing, price go up. High build cost, price go up.
Blaming AirBnB for high housing prices is like setting up a chain of dominos, and criticizing a guy who comes by and knocks it over.

Yeah, and that's exactly what they chose to do. They contributed to the reasons John Public can't afford housing, and were rewarded massively for it.

If it wasn't him, it would have been someone else, or the wind.

Yeah, anyone can rob a bank with poor security, but we should still punish the guy who actually robs the bank.
Air BnB effectively pitted average renters and homeowners against the luxury hotel market. From a supply/demand standpoint its basically moving something like 10% of the rental market to the hotel market.

What this does is it means luxury long term rentals slot out the next lower tier of housing at higher pricing it slides down the economic ladder until a percent of people at the bottom is simply outbid for the reduced normal rental housing stock.

Its not airbnb's fault the market shifted but it is a problem with the market as a result of blending the luxury hotel market with residential housing.
Updoot for wind because Mother Nature doesn’t give a fuck :)

This is a stupid light take, starting with the flowery version of their early 2010-ish "good intentions".

Their "guarantee" insurance was notoriously difficult to actually access if needed. This was typical enshitification from the start, they just had to do a bit more early to gain public trust, until they reached critical mass and then flipped the switch.

The drug dealer gives you the first baggie for free, not because they are good dudes that care about you saving money...

The drug dealer gives you the first baggie for free

We should kill this urban legend, this simply doesn't happen in the real world
- Not an urban legend, just not in your first hand POV - Many examples around crack in the 80s, Molly at raves, a bump of coke at a party... All followed by, "and hey man, if you ever want more, hit me up"
  
  When you're making definitive statements try to add "doesn't happen TO ME...." or "IMO/IME", otherwise you just sound like you base the truth of the entire world solely on your own hyper limited, lived experience.
- Can confirm this happened to me a few times, especially with dope, you don't know what you're talking about
- Sure it does. Or at least it happened all the time when I was in college.
- I actually was talking to a neighbor at my apartments 20 some-odd years ago. We got to talking about coke and he asked if I'd ever smoked it before.
  
  "No..." So I followed him across the hall to his apartment and took a hit. "Whoa, this is fucking great! ...Wait, when you smoke it isn't it crack?"
  
  "Yeah, it's awesome isn't it!? You know, if you want more I can probably find some..."
  
  So, yup. I got my first hit of crack for free. I never thought that happened in real life before, either, and I've never had or heard of it happening since. Additionally, about six months later I stopped smoking crack.
- It also never happened to me.
  
  Or maybe it has happened to me a dozen times but I'd shout, "No way man! Drugs are for losers!" And hand him a DARE pamphlet and then I gained a reputation.

The only thing they've ever done on accident was make their logo look like a ballsack.

Accidentally?

Same when NASA accidentally landed on the moon

I don't think it was accidental

I can't believe people trust others enough to rent their house out like a hotel. I've already seen so many problems from this I can't believe it's still legal. My neighbor moved and they turned it into an AirBnB, some kids threw a party and left some trash out that poisoned my other neighbors dog. There's a lawsuit, but the dog is still fucking dead.

I don't know if I've ever been in an airbnb that's actually somebody's house. It seems like they're mostly "investment properties" that people rent out. I'm sure that's great for housing. \s
- It started this way tho, people renting a room or a couch in their home. Pretty quickly it became either full units or rooms in a share appartement with other AirBnB guests.
What does some kids leaving trash out have to do with air bnb?

Edit: didn't read about how Airbnb insured property damage. But still, it's hard to be responsible for the actions of others.
- Yeah that's why inviting strangers into your home unsupervised is stupid.

There are a few things humans (and thus a healthy society) require for survival. Water, food, shelter.

When we start to point unadulterated VC backed capitalism at those resources, I think we give up something in our society and culture that we don't actually want to give away.

I travel a lot worldwide and have used Airbnb quite a few times. However I'm now on the side of "Airbnb is evil".

A couple years ago had a horrific experience in a villa and Airbnb customer support didn't give a rats ass. Fortunately, my bank did and my credit card chargeback for $4,000 was successful. While I was going through that experience I came across a multitude of communities of travelers who have had equally horrific, oftentimes more horrific experiences with Airbnb where they've failed to step in and assist in any way.

Random dudes who own houses are on average unqualified in the hospitality business and not incentivized by maintaining a brand reputation. There are so many issues caused by shitty Airbnb hosts that hotels - real hotels - just don't suffer from.

So now we have this situation where a lot of spaces are allocated to hotel businesses, more space is allocated to residential housing, And any random dude who can qualify for a mortgage can take a house off the market, fill it for 10 or 15 days out of the month, and keep both a domicile unused for a resident and a hotel room empty.

This is one of the few areas where I think hotel regulations are smart.

Just had an Airbnb cancel on us in Japan 1 week before our trip... Won't be doing that again after seeing how little Airbnb gave a shit
- I've heard a lot of people having this problem. Airbnb is next to useless, even with their guarantee.
  
  Prices goes up, other hotels are booked solid, there are fewer options and travelers are left in the cold.
  
  A big brand would be less likely to risk their reputation over $50 or $100/night difference if there's some new big event in the area
Yeah, but on the same token you don't want to give hotels the monopoly.. There is so much price gouging if they know some big event is happening in town. Plus many areas have fuck all for hotel capacity. I do AirBNB because I don't have $150 every time I want to go to a city. I wish we'd have capsule hotels
- Are you implying that AirBNB hosts don’t do this price gouging as well?
- What you describe is just another example of poor urban planning + untapped market of public transport.

I feel like the US is far down on the victims list. Look how they massacred my boys Spain and Italy

Prague city center is basically just airbnb flats now
- Same in Nashville. It's a shame. I wish the government would regulate this more.

Remember back before Airbnb when this was just a free thing called couch surfing?

i mean couch surfing is guest and host being there and interacting with each other.

AirBnB is getting the flat for yourself for the time you rent it.
- A big part of Airbnb used to be spending time with a host. It has since turned into just landlord via app.
- That's exactly how airBnB started though. Then they moved to renting out the whole place and now we are where we are.
Not really. Couch surfing was only for a certain type of person.
why free when you can make money?

Oopsie doopsie

Oopsie poopsie...

Because everything went to shit

https://www.insideairbnb.com

Just gonna leave this here. Pick your favorite city.

edit: guess we killed it. But there are a lot, a lot

Jesus. I can't find an affordable apartment in Boston but "Blue grounds" is listing fucking 372 of them on Airbnb....

EDIT: so Blueground is the biggest property holder in almost every city? Or one of the top 5 in the places it isn't #1. What the hell?
- There are whole 30 story apartment buildings which are managed and run like a hotel but with units purchased by owners for STRs. Crowd-sourced hotels. So might be that company managing a whole building.

It also doesn't help housing prices that the landlords are colluding to raise prices:

https://www.ftc.gov/business-guidance/blog/2024/03/price-fixing-algorithm-still-price-fixing

It isn't just Airbnb's fault, it's landlords wanting to maximize their return, no matter the method (short-term rentals or price fixing collusion).

Then explain why this is a global phenomenon?
- Then explain why this is a global phenomenon?
  
  Because the same causes are happening mostly all over the world. Meaning, buying up houses. Driving up rent, etc.
- Because often it is a nightmare to evict a tenant that do not pay the rent.
  
  I can speak for where I live where a lot of people gone to the short-rental way exactly because that way they have the certainty that when they want the house back, for every reason, they have it.
  
  To me AirBnB is not the problem, it is the wrong solution to a real problem.

Just a little fucksy wucksy :3

Maybe they should ban whole home AirBNB.. i only ever do rooms.

Theyd part out a hous into multiple rooms. I stayed at one airbnb that were 3 stories and each one was another airbnb, with a kitchen on the main level that had to be shared. No one used it for the 3 days i was there, but still.
- You can easily regulate against that.

“Accident” fkn lol

'Company that made bank deliberately flouting zoning, renting and subleting laws claims it was all an accident'

Hotels were a nightmare, cabs were a nightmare. These companies indisputably changed the game in the favour of the consumer all around the world.

Where we are now having an issue is large swaths of housing taken over by companies and investors wanting a return. As long as housing and renting are attractive for investment over and about housing and transitory renting, it will attract lots of money.

Supply must be improved to improve the housing market. This should be a continuous government function at least at the low and middle income level not just a private endeavour.

Density and public transport is the answer - not killing something that absolutely changed the game and took the hotel and cab market back to their customers begging for a chance.

Agreed on cabs but hotels haven't changed anything significantly and they're looking much better than AirBnB at this point.
- They ripped out the carpets. It made everything better.
Sure, but AirBnB and Uber didn't improve the hotel and taxi markets, they just joined them. They each took advantage of a tech debt and then lowered the barriers for entry to the market. In doing so, they made a shit ton of money by carving out market share from the fucked up systems you described.
- Also by doing and end run around regulations by pretending to be people just renting their house when they are away or giving rides to people going in the same directions. That is why they have names like 'ride share' instead of 'contracted cabbies who drive their own cars'.
- Seriously? Not sure about airbnb since I use booking, but Uber was so much better than cabs it wasn't even close. They didn't even make that much money. They lost money last quarter
What wasn’t a nightmare was bed and breakfasts. They also weren’t an excuse to keep property off the housing rental market at scale.

These companies aren’t saviours, they’re businesses who rode public tech optimism and common frustration at established industries in the same fields to stay ahead of regulation and have the public demand it. Surprise, they’re the same businesses.
- Yes, bed and breakfasts rock, and I try to use them when I travel because the experience is way better.
- They also weren’t an excuse to keep property off the housing rental market at scale.
  
  True. But given that houses were off the market even before, I don't think it is exclusively their fault.
  
  For example Milano historically always had about 30% of the available homes empty, and that even before Airbnb.
Yeah, I think the main issue is supply. Airbnb works because of a mix of supply and costs. There just aren't many nice places to stay in resort areas, and the few that exist are extremely expensive (e.g. fancy hotels). Likewise, hotels are often more expensive and less convenient if you have a large group (e.g. my family likes to vacation together, and there's like 20 of us).

The problem seems to be long term residents feeling the pain of increased housing costs. If you legislate against that, those tourists will still need to go somewhere, which means more hotels or more strain on transportation from the outlying areas to the tourist area. If mass transit is effective, that's not a big issue, but far too often that's not the case, so you'll just end up with tons of traffic.

My proposal is to not ban it, but instead limit it to residents, so in order to do short-term rentals, you need to be physically present a majority of the year. Otherwise, you need to apply as a regular rental, which can be limited to certain areas near transit hubs to keep traffic under control. Then improve transit into the area so tourists who don't fit in the city can easily get there.