Politicians unwilling to pursue radical structural reforms to solve large, complex problems often settle for boring proposals that are only half-clever. These proposals usually involve complex plans, are often “supported” by opaque but detailed data, and studiously avoid root causes. Politicians who advocate such proposals benefit from appearing to be actively working to solve the problem, and inevitable failure is often less politically costly than risking to enact bolder, more appropriate solutions. This dynamic plays out repeatedly in American housing policy in cities struggling with rising rents.
The small sticking point that local policymakers have uncovered this time is the idea that regulating short-term rentals, i.e. services like Airbnb, will encourage landlords to convert their properties to long-term rentals. More supply would drive down prices, at least in theory.
Prosecuting new and innovative market entrants like Airbnb has an ease and simplicity that is lacking when pursuing real reforms like zoning overhauls.
Unsurprisingly, abolishing STRs has not eliminated urban housing shortages, and anti-STR policies have proven to be primarily an inconvenience for travelers and an unfair obstacle to property owners earning (often desperately needed) income.
Such policies have been tried on a large scale. maximum Size: January 2022, New York City Kneecap Short-term rentals, instituting burdensome regulations; Excised In the month leading up to the enforcement date, 70% of the city’s Airbnb listings (about 15,000) were closed, and to the dismay of lawmakers, those properties never reappeared on the market as standard rental housing. WiredThe study found that many short-term Airbnbs remained Airbnbs after the restrictions were put in place, simply extending rental periods beyond 30 days to comply with the law. Essentially, the city’s efforts did nothing to alleviate the affordability crisis.
Most Airbnb landlords are looking to avoid the hassles of being a full-time traditional landlord, Tony Lindsay, president of the New York Homeowners Alliance, told Wired.“More than 95% [his] According to Wired, members of the group said they “have no intention of being long-term landlords.”
And about 75% have pivoted to provide long-term services. Thousands of landowners I gave up my Airbnb income entirely and simply quit.
The New York City hospitality industry… if you will… Hospitality This statement to local politicians suggests that councillors were concerned about someone other than ordinary citizens and property owners. The New York TimesNeat“The Hotel Labor Council, a powerful force in local politics and an ally of Mayor Eric Adams, has long opposed the expansion of the platform,” it said.
Sure enough, hotels are benefiting: “Hotel occupancy in New York City is up slightly compared to last year, at 4% in January and 3.4% through February 24.” Wiredreport.
Other areas besides New York are also benefiting: “Jersey City is seeing increased demand,” Wired noted in March. [for STRs] As of mid-February, demand was up 77 percent from a year ago, while in Weehawken and Hoboken, demand was up 45 percent and 32 percent, respectively.”
The Big Apple created chaos with little in return. Harvard Business Review“Airbnb contributed about 1% of total rent growth,” and that’s in cities where the average monthly rent was above $1,800 in 2021. Moreover, Airbnb’s modest impact on prices was concentrated in “centrally located neighborhoods with higher-income residents” rather than in lower-income areas where shortages and high prices may be most adversely affected.
Politicians have an innate tendency to try to solve systemic problems through short-sighted, scapegoating, donor-driven, politically expedient, property-rights-violating policies, and this tendency will likely never go away. It is easy and simple to prosecute new, innovative market entrants like Airbnb, but lacking when pursuing real reforms like rethinking urban planning.
But politicians who choose the easy way out over the right way should be held accountable after their policies inevitably go wrong.
