There is a fraction of Airbnb's client base that is purely regulatory arbitrage --- the people who buy buildings and rent out all the rooms on Airbnb.
But there's also a large fraction of Airbnb's business that is generating value. The 4-bedroom 2-storey townhouse in W'burg that Airbnb has isn't available on the hotel market at any price, and the owner of that very valuable property has lots of incentive to keep it up, but because he's at Cornell for the next several years, the house is a cash-flow drag to him. Everybody wins when he carefully rents it out on Airbnb.
The challenge is to come up with a system of regulations that works for both circumstances.
Comments
There is a fraction of Airbnb's client base that is purely regulatory arbitrage --- the people who buy buildings and rent out all the rooms on Airbnb.
But there's also a large fraction of Airbnb's business that is generating value. The 4-bedroom 2-storey townhouse in W'burg that Airbnb has isn't available on the hotel market at any price, and the owner of that very valuable property has lots of incentive to keep it up, but because he's at Cornell for the next several years, the house is a cash-flow drag to him. Everybody wins when he carefully rents it out on Airbnb.
The challenge is to come up with a system of regulations that works for both circumstances.
I'd say that both are generating value.
The people who buy building and rent out all the rooms or Airbnb provide a liquidity the market needs - they are doing something "of value"
If they do that for profit, odds are they are making money and the next best use of these buildings would bring less money.
Mob hotels generate value in the hotel market the way an illegal tire fire generates value in the waste management market.
Good point.