AIRBNB, RISING RENT, AND THE HOUSING CRISIS IN LOS ANGELES from Les and Elaine

new_home_sale_soldSharing our homes has been commonplace for as long as there have been spare rooms and comfortable couches. Whether through word of mouth, ads in newspapers or flyers on community bulletin boards, renters and homeowners alike have always managed to rent out or share rooms in their living spaces. These transactions were decidedly analog, but they represented a genuine peer-to-peer marketplace. Websites like Craigslist eventually made connecting sellers to buyers far more common. Companies like HomeAway applied the same principle to the vacation home rental market, allowing owners of vacant homes to connect with vacationers. In all these cases, transactions were limited to the buyers and sellers. If there were negative effects arising from the transaction, they were largely limited to the buyers and sellers.

AirBnB changes this basic formula. By incentivizing the large-scale conversion of residential units into tourist accommodations, AirBnB forces neighborhoods and cities to bear the costs of its business model. Residents must adapt to a tighter housing market. Increased tourist traffic alters neighborhood character while introducing new safety risks. Cities lose out on revenue that could have been invested in improving the basic quality of life for its residents. Jobs are lost and wages are lowered in the hospitality industry.

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Elaine                                                     

DRE #00598428

Senior Director, Coldwell Banker New Homes Division

With over 200 condominium, townhome and loft projects successfully marketed

310.453.1965 Cell: 310.633.4742  Fax: 310.756.1233

elaine@elaine360.com

“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”

 

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