Is airBnB really to blame for Spain's rental crisis? \ stacker news ~econ

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Is airBnB really to blame for Spain's rental crisis?

888 sats \ 48 comments \ @stack_harder 3 Jun econ

I thought it would be interesting to see what the econ hive mind of Sn thinks about this.

For those unaware, Spain has been making a lot of waves in UK press lately as they are protesting tourists and blaming them for the spikes in rent (among other things).

Lots of pieces like this https://www.msn.com/en-gb/money/other/i-live-in-a-600-cupboard-in-tenerife-tourism-priced-me-out-of-my-home/ar-AA1FSClX?ocid=winp2fptaskbar&cvid=717f23527d3d4e87b7ded7e09c9df5f7&ei=26#comments

A Bank of Spain report last month said the country had a deficit of 450,000 homes. Half the housing stock in the Canary and Balearic Islands is either tourist accommodation or is owned by non-residents etc

One of the commenters said this No. Canarian homeowners caused this problem by listing their homes on short-term letting sites like Airbnb, hoping to make a quick buck. Instead of long-term lets for locals. When all tourists stayed in hotels, there wasn't a problem. The same goes for the mainland.

And I thought that does make sense, you never used to hear of problems like this in the past when tourists, basically, stayed in hotels.

Interested to hear what Spanish stackers think. Also, general stackers, if you were in charge and could magically enact any policy you wanted, how would you tackle the issue?

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65 sats \ 0 replies \ @sox 3 Jun

I live in Italy, sadly in a tourist city. You can't find houses easily: a 2-room house goes by 800 euros at least and if you search listings you can only find 3-4 houses that are actually good albeit expensive.

But then you go Airbnb and you can find 500+ listings, with an average of 80 euros per night for a 2-room house, so 2400 per month. The reason might be better security for the landlord but you can't tell me that there's not an economic reason, too.

226 sats \ 11 replies \ @SwapMarket 3 Jun

Absolutely not. Stupid laws that make long term rentals a high risk business are to blame. It is virtually impossible to evict a not-paying family with children from your house, because police will do nothing without a court order, and courts spend 5+ years to hear the case. So everyone prefers renting 3 months in the summer to foreigners, with weekly cleaning and control, than to let locals move in. Annual yield is the same or better, but the risk is much smaller!

5 sats \ 0 replies \ @stack_harder OP 4 Jun

do you think if the gov made it very easy to evict tennats, people would feel safer letting long term? or do you think short term would still be more popular because a landlord will make more per day?

251 sats \ 8 replies \ @Bell_curve 3 Jun

Plus migrants from shit hole countries flooding Spain

10 sats \ 3 replies \ @SwapMarket 3 Jun

Not as many as in France and further north. Spaniards did not colonize any African countries afaik, and drew out the arabs that captured their land. So they have moral restraints to do that again.

10 sats \ 1 reply \ @SwapMarket 3 Jun

Have NO moral restraints...

0 sats \ 0 replies \ @Bell_curve 3 Jun

When will they start expelling Arabs and other foreigners that resemble the Moors?

0 sats \ 0 replies \ @Bell_curve 3 Jun

That’s right

Spain expelled the Moors or Moops

Germany is lost cause

10 sats \ 3 replies \ @anon 3 Jun

Spain is full of black men from shit hole countries milling about and running various scams. Kicking them all out would free up a lot of housing.

10 sats \ 1 reply \ @stack_harder OP 4 Jun

are they taking up much of the rental stock tho? i cant imagine they want to pay much rent and also cant imagine a landlord would want to rent to them

0 sats \ 0 replies \ @Bell_curve 4 Jun

of course they are unless they own a home (doubtful) or are homeless

0 sats \ 0 replies \ @Bell_curve 3 Jun

Bingo

0 sats \ 0 replies \ @denlillaapan 3 Jun

there we go

41 sats \ 2 replies \ @Undisciplined 3 Jun

I recall someone bringing this issue up wrt mainland Spain.

First, it's an entirely plausible hypothesis. Markets efficiently allocate scarce resources: so, if a particular location is great for tourism, that's where markets will direct resources.

Second, I suspect this has far more to do with restrictive building regulations. If it were easier to develop real estate, prices would be lower.

47 sats \ 1 reply \ @stack_harder OP 3 Jun

do you think airbnb should have carte blanche or should they get slapped with regs like in some of the US states?

course, if the gov allows a ton of the real estate supply to be bought by foreigners as well, wiuthout building new units, they are kind of contributing (but when arent they lol)

0 sats \ 0 replies \ @Undisciplined 3 Jun

I think property owners have every right to contract with Airbnb to decide who stays in their property, unless they've agreed not to through something like a home owners association.

Yes, people should have "carte blanche" to engage in voluntary transactions.

12 sats \ 1 reply \ @fourrules 3 Jun

The housing crisis basically everywhere has nothing to do with a shortage of housing stock or tourists and everything to do with boomers and gen-Xers storing their wealth in property. They do this because they know that the government will bail them out, they won't allow the property market to crash. Coupled with the income and the investment vehicles that allow pension funds and private investors to purchase equities backed by property, it makes investing in property at scale more liquid than simply buying second, third, and fourth homes to rent out.

Spain, Portugal, and Italy are in particularly dire straights due to the wealth inequality between generations. Spain in particular is the worst offender in Europe, where Gen-Xers were the last generation to receive fat pensions. Spanish millennials simply cannot afford the rents charged by boomers who simultaneously import cheap labour to undercut the salaries of other people's children, meaning wealth accumulates in families who were able to get onto the gravy train.

In a free market you'd have a lot of construction, including affordable homes, but the people who vote make sure they don't build enough to bring down house prices, nor to disturb the local scenery around their own homes.

This all means that younger people who can save, locked out of the property market by the scale of the deposits they are required to have saved, invest in stocks and bitcoin because these are assets they can take with them and liquidate in places that make it easier to purchase homes with decent salaries. That's why these Mediterranean countries, although clearly not the only countries experiencing housing crises, are the oldest countries in Europe demographically. The young people are just opting out.

0 sats \ 0 replies \ @denlillaapan 4 Jun

The housing crisis basically everywhere has nothing to do with a shortage of housing stock or tourists and everything to do with boomers and gen-Xers storing their wealth in property

There we go. Excellent summary

44 sats \ 1 reply \ @Crow 3 Jun

In Tenerife (the south side tourist area anyway) the locals have been sick of tourists for many years. Apartments there have been bought up by foreigners who either live there or rent them out to other foreigners.

If the opportunity arises to make a good amount of money by renting or selling an apartment which was bought for a lot less in the past then many people will take it., especially if the area already has a substantial amount of people from a different culture who do not speak much or any of the language as the erosion of the community had already begun.

So, maybe if the tourism had been mostly confined to hotels it could have been avoided. I'll bet the government saw an opportunity to tax the hotels, which raised the rates and caused people to seek out other ways to enjoy a holiday.

5 sats \ 0 replies \ @denlillaapan 4 Jun

Maybe, maybe. These are good questions, but I don't understand/see any outcome that doesn't abolish free market exchange or devolves into tyranny.

Price we pay for living in paradise/free society? = others want to live there too

7 sats \ 1 reply \ @TotallyHumanWriter 3 Jun

I live in the Canary islands, and there are many nuancesces to the situation.

Firstly, the protests are NOT anti-tourism, despite the poor reprting in the UK media. These reports are aiming to get clicks from angry middle-England holiday makers.

Canarians specifically are questioning the government-approved 'big tourism' model, which greenlights massive resorts at the expense of local resources. These hotels provide jobs, but they are shit minimum wage jobs.

Most young Canarians can work in poorly paid service jobs or leave the islands to find better work. They have no ability to buy property, which has increased greatly in price.

People here do want more regulation against second homes, and short-term lets. The reality is that governmental controls and intervention are likely to make things more inefficient.

Also, the pinch points for rental properties are highly desirable city centre and beachfront areas. You would dream of renting in Zone 1 in London as a young professional, but Spanish have strong family ties, and see it as unfair if they have to move to different barrios.

It's not an easy situation to resolve, mostly because EU law prohibits Spain from taxing foreign buyers. Plus destinations like Canarias are trapped in a cycle of big tourism (to explain why would take another long essay).

Essentially, it's about money. Yes, the Canarian economy is almost excluvisely tourism, but local people are struggling more than ever, as the money is not trickling down to wage workers.

0 sats \ 0 replies \ @stack_harder OP 4 Jun

appreiciate the nuance from the ground

7 sats \ 5 replies \ @cryotosensei 3 Jun

If the nation is short of 450k homes, where are the Spaniards staying now?

I don’t know anything about this crisis, but your post reminded me of my honeymoon in Madrid!

36 sats \ 2 replies \ @SwapMarket 3 Jun

mostly living with their parents

0 sats \ 1 reply \ @denlillaapan 4 Jun

Then there's no shortage.

Like dude says below: #996439

they'd rather just live with their parents.

That's a choice, a tradeoff. You wouldn't say that there's a Netflix shortage simply because I'd rather watch YouTube/nothing than pay $9.99 a month

12 sats \ 0 replies \ @SwapMarket 4 Jun

Well, there are also lots of people living in tents across the country. But the root cause is that Spain is a backwards agrarian country with low wages and high unemployment. But great climate, so rich foreigners love to go there for vacations and retirement. Tourism is the number one source of income for many locals. But it is en vogue for politicians to blame outsiders for all the problems in every country nowadays.

5 sats \ 0 replies \ @fm 3 Jun

If the nation is short of 450k homes, where are the Spaniards staying now?

Its crazy here.. After 2008 the picture changed a lot.. We cant buy houses.. Madrid is now same aprox price of places like Washington DC where the income is like 5X

0 sats \ 0 replies \ @denlillaapan 4 Jun

Yeah, these sort of figures are mostly made-up bullshit. Some report asking people whether they would like to live alone, or estimate some ideal household size vs actual.

If anything indicates a shortage, it's the above-inflation price growth — not that some people, somewhere, say that they'd like a house

31 sats \ 12 replies \ @denlillaapan 3 Jun

Sitting in an airbnb in a sleepy Spanish village, this is definitely on my mind. Roughly three separate topics.

Pecuniary externalities: these are second-order impacts on someone because of economic transactions that two people willingly engage in. We usually don't care about others' feelings toward mutually beneficial exchange. Tourism/housing/accomodation doesn't seem to be different here. Pecuniary externalities are not a thing anybody should care about.
It matters whether we're in small-town, low-competition places like I'm in right now (it's not like tenants are lining up for this house; and if there weren't an airbnb service here, the owners would probably just use it for occasional vacation or housing-market-savings account -- hashtag short the currency #994746) or downtown Barcelona. In the latter, still someone would be "priced out" -- whether by tourism or high-end immigration, by business offices -- and the blame would lay with the very obstacles that stop the price from falling to marginal cost (zoning + fiat money), not the exact facility that's taking place there.
What would have to be true for this to be the outcome? a) hotels either bankrupt, or on their way there because they're empty since the tourists now don't go there but stay in airbnbs, b) strict zoning would stop developers from expanding the supply in combination with increased demand, c) I guess, a ton more tourists that usually/in recent times.

Maybe a little bit of (c), but in the absence of (b) that would adjust very quickly.

Plus, this (and gentrification etc) is usually a convo about morality and "rights", since there's no formal transgression made. At the end of the day, all kinds of claims about unfair housing comes down to someone, somewhere, objecting to what others do with their money and stuff. That seems outdated and silly, or in the limit confiscatory and undermining of the idea of property; call the Catholic Church or the Greta morality police, whatever.

Here are my two sats:

Nobody has a right to live anywhere;

if the most efficient use of a plot of some Canaray island land is to build quaint houses to rent out short-term for British tourists... why shouldn't humanity do that? Put differently, if you don't like that, you gotta bid that away from the current owners -- that is, pay top dollar to have that place for yourself. That's what a free world does.

Anything else is imposing a loss on those people. Why do you, in your moral elevation, have the right to impose losses on others simply because you "don't like" what they're doing?

Plus, your Tenerife dude can just move if he doesn't like the offered trade-off. What's the problem...?

10 sats \ 0 replies \ @stack_harder OP 4 Jun

extra zaps for being in the epicentre lol

0 sats \ 10 replies \ @Bell_curve 3 Jun

What about the impact of immigrants in the last 20 years?

17 sats \ 5 replies \ @Crow 3 Jun

last time I was in Tenerife over 10 years ago immigrants had appeared, trying to sell sunglasses when we were trying to have a meal or a drink, or sitting on the beach. Kinda ruined the holiday.

There was also a scam running, selling timeshares in a large rented building next to the beach! Police were around the beach a lot and must have been aware of it.

0 sats \ 4 replies \ @Bell_curve 3 Jun

At least they didn’t rob or assault or stab you

10 sats \ 3 replies \ @Crow 4 Jun

yeah, they were pretty harmless. Just an annoyance.

0 sats \ 2 replies \ @Bell_curve 4 Jun

that was 10 years ago

they are more harmful and more annoying today and annoying would be an understatement

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0 sats \ 3 replies \ @denlillaapan 3 Jun

I dunno... what, in the absence of broken money and zoning regulations, do you think that does?

Can't any place, regardless of influx, adjust by building more...?

7 sats \ 2 replies \ @Bell_curve 3 Jun

More supply will lower prices

Unfortunately that is not the case today or the near future

What has been the impact of immigration in Sweden and Denmark on housing prices and quality of life?

10 sats \ 1 reply \ @denlillaapan 4 Jun

On housing prices? Probably nothing. Again: with sufficiently flexible market, liberal zoning regulations, and a non-broken money, immigrants can't "impact" housing prices anymore than you or I could impact steak prices by going carnivore.

Quality of life is a different story: some people don't like them around. And there's undeniably an effect in deteriorated culture/social cohesion/misusage of public services etc.

0 sats \ 0 replies \ @Bell_curve 4 Jun

Housing prices in Japan are relatively low.

Japan has a declining and aging population with a low birth rate and almost zero immigration.

Population affects demand for housing

Regarding steak prices what if one million vegans decided to convert to carnivore? I think the price would increase

You or I can’t affect prices because we are one person. One million persons can affect housing prices especially in a small country

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5 sats \ 0 replies \ @The_Young_Bitcoiner 3 Jun

They are less people being born. They are less people interested in paying absurd amounts of rent, they'd rather just live with their parents. Real Estate is a bubble which is about to explode, not just in Spain, but everywhere.

5 sats \ 0 replies \ @optimism 3 Jun

Just wait for the tourists to no longer come. Austerity is knocking that door.

how would you tackle the issue?

build, baby, build.

0 sats \ 0 replies \ @nikotsla 4 Jun

No.

Who? Politician, But who? Socialist wing.

0 sats \ 0 replies \ @Bell_curve 4 Jun

the solution is to ban tourism, problem solved, you are very welcome

send me sats!

0 sats \ 1 reply \ @fm 3 Jun

problem is FIAT and Government.. airBNB does not help, and that is a fact, but not the main reason.

If you look into specific turistic places like Tenerife or Ibiza, has more impact but Fix the money, fix the world

26 sats \ 0 replies \ @Crow 3 Jun

FIAT and government - the source of most problems!

0 sats \ 0 replies \ @zuspotirko 3 Jun

No. The culprit is NIMBYism