Is Airbnb a prime target for regulation, or is it just another way to expand the marketplace for bedrooms? Dan Bertolet urges caution. After all, couldn't less Airbnb just mean more hotels?

In cities like Seattle, where concerns about local affordability have been brewing for a while, short-term rental platforms like Airbnb look like a threat. As the common wisdom has it, they cut off the supply of long-term units, driving rents up. "In response, the Seattle City Council is considering new restrictions targeted at hosts who use Airbnb or similar services as a sort of mini virtual hotel."
But Dan Bertolet of the Sightline Institute sees no reason to panic. While Airbnb's critics aren't necessarily wrong, we don't know enough yet to make a judgement. For one thing, restricting Airbnb would place additional regulatory pressure on an already constrained market. Bertolet writes, "web-based STRs, LTRs, and hotels are each interrelated components of the same citywide housing market, each utilizing the same basic resource: bedrooms."
He goes on, "We also know that housing markets in North America are extremely rigid and inflexible, discouraging all manner of inexpensive housing that could otherwise be helping to ease the affordability squeeze."
As usual, it all comes back to supply and demand. And the demands of Airbnb users more closely align with those of hotel guests than long-term renters. "Hotel and apartment developments compete for the same scarce urban land, so more new hotels means fewer new apartments, and fewer apartments means higher rents. If so, then STR restrictions may be a zero-sum game for affordability."
His overall message is one of caution, but Bertolet also notes that the hospitality industry wouldn't be so vigorously opposed to Airbnb if it didn't cut into their business.
FULL STORY: Why Quashing Short-Term Rentals Is a Zero-Sum Game for Housing Affordability

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