Your second claim that this would increase rents doesn't make sense on the larger scale. For every apartment that is rented out on Air Bnb a hotel room goes vacant. After a bit of time the hotel industry would decrease it's capacity to meet the decrease in demand. That would open up former hotels as new apartments.
The possible increase in flexibility and therefor efficiency is more likely to lower rental costs across the city, and increase income opportunities when apartments have a room to rent.
No, as the hotels shrink capacity, unless there's a corresponding rise in amount of residential property, it'll be more people packed into a smaller space. The higher end hotels and rooms will go first, and that's the money that will end up sloshing around the residential and rental market. All that's left will be shitty motels, insanely expensive apartments and houses for purchase or long term rental, and short-term rental at current rates or maybe a tiny bit lower (I agree that the market will force short term rates down.)
and increase income opportunities when apartments have a room to rent.
This will increase income opportunities for landlords. Especially all of those cash buyers that were riding the upside of this last rally, buying hundreds of properties at a time. In cash.
Edit: Even though, now that I think about it, there's a lot of shadow inventory that will come back into the system with price rises. Residential might be able to keep up with demands for a while.
For every apartment that is rented out on Air Bnb a hotel room goes vacant.
This isn't true. NYC already prevents a lot of short-term visits because of the high nightly hotel rentals. If that price becomes cheaper, then more people will travel there.
Comments
Your second claim that this would increase rents doesn't make sense on the larger scale. For every apartment that is rented out on Air Bnb a hotel room goes vacant. After a bit of time the hotel industry would decrease it's capacity to meet the decrease in demand. That would open up former hotels as new apartments.
The possible increase in flexibility and therefor efficiency is more likely to lower rental costs across the city, and increase income opportunities when apartments have a room to rent.
No, as the hotels shrink capacity, unless there's a corresponding rise in amount of residential property, it'll be more people packed into a smaller space. The higher end hotels and rooms will go first, and that's the money that will end up sloshing around the residential and rental market. All that's left will be shitty motels, insanely expensive apartments and houses for purchase or long term rental, and short-term rental at current rates or maybe a tiny bit lower (I agree that the market will force short term rates down.)
This will increase income opportunities for landlords. Especially all of those cash buyers that were riding the upside of this last rally, buying hundreds of properties at a time. In cash.
Edit: Even though, now that I think about it, there's a lot of shadow inventory that will come back into the system with price rises. Residential might be able to keep up with demands for a while.
For every apartment that is rented out on Air Bnb a hotel room goes vacant.
This isn't true. NYC already prevents a lot of short-term visits because of the high nightly hotel rentals. If that price becomes cheaper, then more people will travel there.