By: David A. Smith
Dr. David Kibner: Elizabeth, could you please tell me, in your opinion, what is going on?
Elizabeth Driscoll: People are being duplicated. And once it happens to you, you’re part of this… thing. It almost happened to me!
At the conclusion of yesterday’s Part 2, we saw that when a building or even a small neighborhood is infested with Short Stay Rental tenancies, the social ecosystem is disturbed, and not always for the better.
Once it happens to you, you’re part of this … thing
Sources used in this port
(and previous AHI posts on Airbnb and flat-renting)
Prohibition and the rent-easy (August 13, 2010)
Chez Reductio ad Gotham (August 5, 2013)
New York Post (October 16, 2014; brick-red font)
BBC News (December 26, 2014; black font)
Boston Herald (January 17, 2015; olive-green font)
Yet that localized effect has to be seen against the larger city, which like any other complex organism is divided into areas that are specialized organs whose functions serve the whole city – in this case, all those tourists bring more money to the city than they take home, and with all that money comes new jobs for locals.
So perhaps the city’s leadership needs to look beyond the localized complaints at the bigger
voting patterns picture:
5. Short Stay Rental can be symbiotic with a healthier city
Elizabeth Driscoll: There’s nothing to be afraid of. They were right. It’s painless. It’s good. Come. Sleep. Matthew.
[Matthew begins to back away]
Elizabeth Driscoll: Matthew. Matthew!
At the heart of the ‘sharing economy’ business models is an indisputable reality: things that we possess as ours are used infrequently.
Many things are used for only part of the day. Cars are used perhaps two hours in twenty-four even by heavy commuters; offices hum ten hours in twenty-four; homes are occupied perhaps eighteen hours in twenty-four.
Most spaces are under-occupied. When was the last time every seat in your car was taken? Or every bedroom in your apartment or home slept in?
At Airbnb – by far the biggest internet site dealing in holiday lets – they say that the vast majority of their business is with people legally letting primary residences.
The figure offered by Airbnb’s Paris director Nicolas Ferrary is 83%.
Invest in France … so we can ban your investment?
Underuse is an acceptable and accepted consequence of ownership, because we want the thing ready for our use whenever we want it.
(Urban slums are the counterexample: there poverty is so extreme that everything is stressed: construction costs are minuscule, operating costs likewise tiny, and every available space is used for sleeping.)
This over-ownership is natural, even efficient, because compared with the cost of acquisition (including construction and maintenance), the marginal cost of use drops dramatically when the asset is idle, and our planet is (in general) rich enough that we can afford this investment in our built environment.
That figure is disputed by Francois Plottin, who says around half of properties advertised on Airbnb are not primary residences.
Frankly, I would expect the figure of pure-SSR properties to be even higher, because once an owner has configured an apartment to be in the business of being rented, he or she wants to maximize its rental use.
“We do everything to comply with the rules, and it is clearly signposted to users of our website what those rules are,” says Mr Ferrary.
Mr. Ferrary is being doubly disingenuous:
1. Posting to the web site isn’t compliance, it’s covering one’s posterior, like those ubiquitous ‘I have read’ disclosures.
You didn’t, we know you didn’t, we know that you’ll deny you did, but we feel better anyway
2. “We do everything.” Nonsense: Mr. Ferrary means his company does the minimum things necessary to be out of direct liability to the Paris government. If Airbnb wanted to do everything, it could inspect flats listed on the send; send mystery shoppers to flats; offer rewards (of, say two free nights’ lodging) to whistleblower guests who reported their landlords – and that’s only three things I thought of in ten seconds.
You’ll never rent from Airbnb again
No, Mr. Ferrary and Airbnb are rent-easy pushers, as is Ms. Leeds:
Many of her clients bought pied-a-terres which they visit occasionally, but rent out the rest of the year to pay off the mortgage.
‘To pay off the mortgage’ is more self-justifying rationalization– as if without the Airbnb money the mortgage would go into default.
It’s inducing violation of the law, pure and simple.
Like other epidemic, over time an outbreak of law-violation ends up in one of only three possible end states:
Extermination, where the violations are wiped out or at least reduced to a negligible population.
“I don’t know who you are … but I will look for you, I will find you … and I will fine you.”
Overrun, where the law drowns in universal non-compliance, and a new order emerges.
“There are no more than 100 or so owners every year who are going through these compulsory steps, and acquiring the compensatory property,” says Francois Plottin.
We can use the law to stop them
“That means 20,000 people breaking the law. But now we are slowly starting to levy fines. This year 50 people have been fined 10,000 euros (£8,000; $12,000) each.”
In other words, the odds of getting away with it are 1 to 400 (99.75% success rate).
Elizabeth Driscoll: Matthew, we’ll never be able to stop them!
Matthew Bennell: Yes, we will.
Elizabeth Driscoll: We can’t! Look it, they control the whole city.
Matthew Bennell: We’ll find a way somehow.
Redefinition, where both the law and the behavior are changed and a new symbiosis emerges. When policy and power clash, there are always at least two critical questions:
1. What should happen?
2. What will happen?
6. What should happen? What’s the right answer?
Like many organisms, when Short-Stay Rental (SSR) proliferates, it permanently changes its environment:
The repercussions on the Paris residential market are severe, according to Ian Brossat, Director of Housing at City Hall.
Hearing tourists’ footsteps? Ian Brossat
“There is already a serious shortage of flats in Paris, especially studios and two-room apartments where couples might start a life together,” said Mr. Brossat.
While Mr. Brossat’s statement may be true, he’s not seeing the whole system.
Some cities are magnets for transients, who can be immigrants:
We’re just passing through, heading for the hinterlands
Every dot is a magnet
Get your picture taken with the shoe
People-magnet cities are also jobs magnets: all those tourists visit the museums, go to the restaurants, climb the Eiffel Tower, take the taxis or the metro, ride the Air France planes, and fill up the hotels,
Discharging loads of rubes heading into town
“Now we have this growing problem of holiday lets, with investors moving in and buying up as much as they can. It has become a business, and the result is fewer properties on the market for ordinary Parisians, and higher prices for what is available.”
There are fewer homes for rent because the jobs and population are growing, but the city isn’t adding supply – and probably for the same reasons that two other Airbnb-popular cities, San Francisco and New York, are likewise running short – development restrictions and development disincentives (rent control).
Paris is an urban disneyland. So are the Italian hill towns. So is Venice.
A gorgeous tourist trap …
… since at least 1730 (Canaletto)
So is downtown Charleston, South Carolina.
Charleston, South Carolina
Because tourist attractions have higher foot traffic than residential neighborhoods, they have higher real estate value. So tourist neighborhoods inevitably tourist-ify, and that means apartments are replaced by transient-occupancy dwellings, by demolition and new construction, or by retrofitting small flats into extended stay hotels, or by simple SSRs facilitated by Airbnb.
“When [Short-Stay Rental takes over] a whole neighbourhood, then the life just drains out of it,” said M. Guillot.
‘Life,’ for M. Guillot, means the rhythms of residential living, the place where people know your name. everyone is familiar, because everyone is known, and because everyone is known, everyone is familiar.
Some Parisians worry that holiday lets are changing the character of neighborhoods
But in cities, by contrast with neighborhoods, strangers live companionably side by side, sharing streets, entries, corridors, walls, floors and ceilings. What distinguishes a good city from a bad city is the ability of people who do not know each other to become neighborly; in a bad city, those anonymous flats can become handy entrepots for drug deals, pied-a-terres for call girls, or staging areas for terrorists.
Ms. Leeds says inspectors are following people with suitcases on the street to see what apartments they go to.
“We feel like we are being spied on. It’s like World War Two. And they have the right to enter apartments without the owner even being there. It is incredible!”
It may be incredible, Ms. Leeds, but you are a fool if you equate occupancy checkups with Nazi police.
The cost of anonymity
The hotel industry is also watching the accelerating spread of Paris holiday lets with misgiving.
“The distortion comes because on our side we have all the taxes and the legal obligations concerning security and access for the disabled and so on.”
“And the flat-owners have none of it.”
Ah, but should they?
In some ways, yes: the flat-owners should be regulated. While the consumer-protection aspect of renting a room is less essential with the power of social media to report and ostracize bad landlords, issues of habitability, wiring, safety and so on.
Conversely, cities have long used hotels as a convenient source of soak-the-tourist revenue streams, and a single apartment isn’t a hotel; it’s much less and there is at present no standard for what it is and what is the appropriate level of regulation – and hence, the policy-justifiable level of taxation or assessment of the cost of that regulation.
Dr. David Kibner: We came here from a dying world. We drift through the universe, from planet to planet, pushed on by the solar winds. We adapt and we survive. The function of life is survival.
We adapt and we survive
[Continued tomorrow in Part 4.]