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> Putting thousands of home owners into financial dire

Not homeowners, short-term rental investors. Many probably are homeowners, but that's not relevant - many more homeowners saw absolutely no change, since they didn't invest into this particular industry.

> Eliminating thousands more rental units of coming onto the market

Thousands more short-term rental units, not real rental units. People who renovate/build for AirBnB will keep their units on AirBnB, not suddenly decide to put them up for real/long-term rental. The units that theoreticallt won't be built now wouldn't have helped the housing crisis even a little bit.

Without regulatory intervention, tourism is so much more profitable, that anyone who wants to invest in realestate and optimise for profit would be foolish to deal in long-term rentals. By making the AirBnB business model less profitable, some investors might actually go "back" to investing in long-term rentals, increasing supply.

Is your hypothesis that supplying more rental units (even if they were mostly short-term) would not reduce the both the price and profitability of that stock?

And, that an increased supply and reduced profitability would not drive some of that short-term rental stock into the long-term rental market?

It appears to be the consensus opinion of HN that reducing supply increases availability and/or affordability.

Howso??

The goal is to add more supply to the long-term rental market and drive costs down, right? That's (part of) how you solve a housing crisis.

The AirBnB market is much more profitable than rentals, so all investment is going there and many flats are even being converted. By incentivising AirBnB, you're driving the supply of flats down as they are converted and the all the new supply that is created goes straight to AirBnB.

The theoretical point of oversaturation when AirBnB supply starts leaking back into long-term rentals would only happen if the number of investors was infinite and prices were set by a perfect inverse relationship to supply. In reality, neither of those assumptions hold. Investors are finite and their number decreases with profitability, which is inversely proportional to supply, so it's unlikely they'd ever reach oversaturation. And AirBnB prices don't decrease linearly with supply, most people just look at what they'd make with long-term tenants and set their price so they end up with some margin more than that...

For a (slightly gruesome) analogy: You have a leech. You want the leech to drink even more blood, until it finally fills up and your circulation reaches an equilibrium. Until that happens, you're bleeding out and you probably won't survive. Why not just cut the leech off?

Units that this “rent control” scheme disallows (source; direct, personal knowledge of individuals experiencing each of these scenarios):

- Studio apartments that are rented to visitors in the summer, and students in the winter.

- homes that the homeowner can vacate during the summer tourist season, and either occupied or rent in the winter.

- Homes, which can be divided into two or more Airbnb, that the owner can can vacate because they have a second home.

- all construction made possible to marginal borrowers, that was rationalized by the potential for Airbnb income in a pinch.

- construction of hotel and apartment units, prevented due to that possibility of further legislative interference by government.

- Loss of productive, wealthy, citizenry who could build, who can move to more business favourable jurisdictions at will.

But, you’re willing to bet that none of these will occur, and that the market will not respond to vastly increased housing unit supply with lowering prices and increasing availability.

Is this a bet that you’re really willing to make?

>- Putting thousands of home owners into financial dire straights, by reducing their income at the same time that their refinanced mortgages are increasing by as much as 100%.

I doubt people are going to shed many tears for people who overleveraged themselves into a risky investment and got burned.

>- Eliminating thousands more rental units of coming onto the market, by eliminating the AirBnB income stream necessary to rationalize building or renovating those units into existence.

What good is all that supply if it's being used for airbnbs? Having a bunch of cheap airbnbs isn't going to help the local housing crisis. You might decry it is nativism, but I think it's totally appropriate for a polity to prioritize the wellbeing of its citizens/permanent residents over tourists.

A first order effect of increasing a stock is that price/profit decreases, driving holders of that stock to diversify into different client bases:

- lower profit AirBnBs to long-term rentals

Reducing supply of AirBnBs does the opposite; drawing marginal suppliers (legal AirBnB units that used to be long term rentals, are converted to AirBnB.)

You’ll have to provide extraordinary evidence that reducing total supply of something (units) can lead to lower prices and more availability. Because it has never done so, in all of history…

>A first order effect of increasing a stock is that price/profit decreases, driving holders of that stock to diversify into different client bases:

You know what would result in "driving holders of that stock to diversify into different client bases" (ie. long term rentals) even more? Forcing them to do so eliminating all demand from the short term rental side. Moreover, doing that would convert almost all of those units to long term rentals, not some marginal percentage your model implies.

As someone who was considering building a home with a rental suite, and who knows multiple others who were planning to do the same — I can assure you this is an incorrect hypothesis.

What's the logic here? If say, 20% of the housing supply is tied up in short term rentals (ie. airbnbs), why wouldn't outlawing them convert most of that supply into long term rentals?

The logic here is they might just not rent it out as housing stock, preferring instead to have a movie room or office and downstairs kitchen instead. If you make this huge hassle, they can find something else to do with their time than go have a fight with city hall for a bit of money.

>The logic here is they might just not rent it out as housing stock, preferring instead to have a movie room or office and downstairs kitchen instead.

But the scenarios you described seem to be excluded from the legislation?

https://www2.gov.bc.ca/gov/content/housing-tenancy/short-ter...

>Effective May 1, 2024, the Province is implementing a provincial principal residence requirement which will limit short-term rentals to:

>* The host’s principal residence

>* Plus one secondary suite or accessory dwelling unit on the same property

ah, you're right. I was thinking of more in the general case of anti-airbnb laws written elsewhere. the comment that started this thread's a bit hard to read.

AirBnB units are profitable but impose significant externalities on surrounding properties, including noise and antisocial behaviour. Unlike a hotel, they're not staffed with somebody who can deal with the problem or escalate to the authorities.

For a while maybe it's a profitable trade to put your hands in your neighbour's pockets, but when it stops working, you don't get to cry about "dire financial straights".

Having stayed in ~50 AirBnBs, we have very seldom used sketchy ones that have the problems you describe (once).

Are you certain you are representing most unit owners fairly?

How would staying in an Airbnb give you any insight? The problem isn't the hosts, it's the folks staying. They're substantially more likely to be drunk and partying, and don't need to worry about any long term consequences of their antisocial behaviour.

I check Airbnb when I move, and I'd rate a full time rental next to me similarly to a busy street. Not a deal breaker, but certainly a strike against it. If others do the same, that translates to a direct reduction in property value for the host's neighbours.

I don't have any moral issue with Airbnb hosts or travellers - I have used it about as much as you have. I don't mind people making money from it.

But when a city decides to quantify the externalities and impose restrictions, it is absolutely not appropriate to talk about financial losses hosts have. They made a cynical bet on relaxed (poor) governance, and lost. You or I shouldn't care any more than they should care about my startup failing.

The cities that have done so are likely to experience the outcomes historically associated with rent controls — disaster.

I’m just stating the obvious.

Banning or controlling Airbnb is simply not analogous to rent control. Assuming free market long term rentals and no NIMBY building restrictions, long term rental prices will fluctuate, and if the demand is sufficient, more units will be built.

That your plan for a house with a rental unit attached isn't profitable under the new regime isn't a disaster, it's the market doing its job. If residents wanted it enough, they'd be willing to pay for it. There is no disaster by definition.

You're not stating the obvious, you're talking your book.

Your hypothesis, that AirBnB units are not fungible with long-term rentals, is not sound.

I personally know property owners, large and small, and their properties are fluidly exchangeable between long and short term rentals.

Reducing the production of new rental units will have the obvious result.

If you don't have rent control or NIMBY blocking construction, you've got a free market and everything will be fine. The legality of Airbnb is completely orthogonal to this.

I'm not even suggesting that cities should ban or restrict Airbnb, just that doing so can be rational and business owners need to take the risk of this into account. Given the delta in profitability, the market does understand this.

I did not claim that Airbnb units aren't fungible with rentals, that's obviously true, and rereading this discussion I don't understand how you believe I made that argument.

but the city does care about your failing startup if you've taken a loan from them and owe back taxes to them.