Posted on 11/07/2015 4:41:59 AM PST by Kaslin
Suppose your best friend is down on her luck. Magnanimously, you give her a spare room in your house, on a temporary basis, and when she starts earning some income, you let her pay rent -- say, $100 a week.
You would think that just about everybody would applaud you. After all, your act of charity has prevented one more person from becoming homeless. But not everybody is happy with that result. The hotel industry doesn't like it for selfish reasons. Progressive politicians don't like it because .... well, it's not always clear why progressives think the way they do.
All of this came to a head this week in a fight over a ballot proposition in San Francisco, a city with two interesting distinctions. With an average-priced home costing $1.1 million, it's the most expensive place to live in America. And, it’s home to Airbnb, a company that came into existence to solve the housing shortage crisis by connecting homeowners who are willing to rent out a room with strangers who need a place to stay. In fact, Airbnb has been so successful in meeting previously unmet needs all over the world that its market value exceeds that of the hotel giant Marriott International.
Let's pause for a sidebar on the economics behind all of this. At any one time, there are millions of opportunities for mutually beneficial exchanges that never get consummated. I have a room I would be willing to rent and someone else would be willing to rent it, but we don't know of each other's existence. When I am not driving my car, I would be willing to rent it to someone else and someone else would like to rent it. I would be willing to pay someone to bring me a takeout hamburger and there is someone who would be willing to do that. But, again, we don't know each other. Modern technology is eliminating all those barriers to mutually profitable exchanges.
But standing between all those willing buyers and willing sellers are a raft of special interests who like things just as they are or were. Just as Yellow Cab and their friends at City Hall have been trying to shut down Uber in every city in the country, in San Francisco the hotel industry, with local politicians in tow, has been trying to stop homeowners from renting out their rooms.
Proposition F, which was soundly defeated in last Tuesday's election would have limited a homeowner's ability to rent out a room to only 75 days. The proponents, including Sen. Dianne Feinstein (who along with her husband has $25 million stake in a San Francisco hotel) even had the audacity to claim that regulating homeowners would actually help solve the city's housing shortage.
It's worth noting that virtually all of California's housing problems especially those in San Francisco are the result of unwise public policies. At e21, Jared Meyer and James Delmore explain:
San Francisco, where rents for a one bedroom apartment frequently exceed $4,000 per month, has the most serious housing shortage in America. Over the past 20 years, San Francisco only permitted the construction of an annual average of 1,500 housing units. Over that time, San Francisco's population grew by 97,000. From 2010 to 2013 it grew by 32,000.
According to a Trulia study that examined housing production from 1990 to 2013, San Francisco had the highest median prices per square foot and the lowest rate of new construction permits among America's ten largest tech hubs.
Nearly 80 percent of San Francisco's housing is occupied by rent-controlled tenants or homeowners. This leaves only one in five housing units available for other renters, artificially driving up rents.
One thing the Proposition F proponents didn't count on was that the companies who service the "gig economy" have the email addresses of lots of voters.
Leading up to the election, Airbnb was only too happy to remind the 138,000 San Franciscans who have used its app that the company was helping to solve the very problem that city government had created. It didn't hurt that the number of app users was greater than the number who actually voted on Tuesday. In New York City, Uber contacted its 2 million app users to help defeat onerous restrictions backed by the taxi cab industry. That's more than the number of people who voted for Mayor Bill de Blasio in the last election.
In both cases the app companies are making the pitch that they, not the politicians, are defending the middle class. Who could argue with that?
And I am a free man. If I wish to rent out a room in my home that is none of my local governments business.
L
A lot of Freepers on this thread are overlooking an important angle to this issue. This is hardly a matter of "freedom" and "liberty" when you look at it closely. The subject of the article involves a ballot initiative in San Francisco, and the author references a similar issue in New York City. How can this possibly involved "freedom" and "liberty" when these involve voters in two of the most radical, Marxist jurisdictions in the United States of America?
Airnbnb and Uber fulfill a legitimate human need. You don’t want to pay for an overpriced hotel room or you need a fast, cheap ride to the airport?
Problems solved. You can negotiate with someone who would provide you with a place to stay or a ride at a reasonable cost and both parties benefit.
The only people opposed to share user services are companies who turf is threatened by them so they want to strangle their competition, with the help of politicians in their pockets.
Its crony capitalism, not the free market at work. Share user services are here to stay.
“As long as there is anything such as a “Property Tax†your home is not yours but belongs to the government taxing body. If you don’t believe me try not paying your taxes and see.”
Worse yet, the propertyt tax is mostly paying for things that are totally unrelated to property. Schools should not be funded by property ownership for openers. Here in California it was these school taxes being shouldered by property owners that fostered Proposition 13. Prop 13 has forced the RAT State Government to take on a much larger portion the costs of education and they really don’t like it. And it has also caused a huge disparity in property tax bills owing to the fact that Prop 13 caps annual increases to 2% (of the tax bill). So here we sit in a 4,000sf home that’s a whole lot bigger than we need, but that’s “cheap” taxwise, so we don’t intend to move. The house across the street just sold for the 4th time since it was build in 1983. The new owner’s taxes are 3x ours because the sale allows the property to be reassessed at it’s new value based on it’s sale price. And the real bitch is that a huge percentage of the increase in home values is simply inflation, so the government is making money off of it in this instance.
What he didn't mention is that Uber is now working with the NYC Taxi & Limousine Commission to shut down Lyft's operations in the city. As a side note, New York City is one of the only places I've seen where an Uber ride is more expensive than a regular taxi for the most common rides (from airports, for example).
See what happens when these companies that shovel out these "freedom and liberty" platitudes in their PR campaigns become dominant players in the market? They all become crony capitalists at the end of the day.
If I want to do business with someone and provide them a service they need, I not only gain clients, I gain friends. And there is nothing like someone willing to help out at a modest cost.
Politicians tell us they fight for us but in reality they fight for whomever can line their pockets, as we’ve seen with the Ex-Im Bank.
Whatever Airnbnb and Uber are, they’re the exact opposite of corporate welfare titans.
That’s the argument for downsizing government for a government that picks winners & losers is a threat to freedom.
I agree that crony capitalism is a serious threat as well to our wll-being.
I don't know how they work in other places, but in New York City that's exactly what they are. Uber is now functioning as a partner of the NYC taxi commission. And Airbnb's business model is built on people who can easily undersell regular hotels because they live in rent-controlled apartments and don't pay the full freight anyway.
Whatever Airnbnb and Uber are, they’re the exact opposite of corporate welfare titans.
Are you suggesting that companies like Marriott and Hertz Car Rental are?
Feel free. We have a nice vacant lot right down the street.
I read the article. Are you sure you did?
How does a tenant subletting space diminish the property rights of anyone? While subletting isn’t as common as it once was, it still does exist. It’s both legal and moral. All a tenant is doing is assigning all or a portion of their property right, their tenancy, to another person.
As for zoning, there is no place in local governance that is more rife with corruption than zoning. There are places in the US that don’t have zoning such as Houston. They’ve managed to survive. Deed restrictions prevent rendering plants from being put next to daycare centers.
And where do you build in SF?
I guess the next best thing would be eminent domain .
Rip up existing housing,put in dense housing (200 sqft after all no one in SF has kids)and then have a nice tax base to feed government.
>> I read the article. <<
Uh, I thought we’re not supposed to read the articles around here — only the headlines. Do you know something I don’t?
I read the article, too. I’m still trying to figure out how Airbnb has any relevance to addressing a “housing shortage.” I don’t think the author has a clue what he’s talking about on this subject.
1. In many cases it isn't even permitted under the terms of a lease (I'm sure Airbnb acknowledges that this is a problem they have to address with in their dealings with their partners).
2. In the case of rent-controlled apartments (New York City and San Francisco have "written the book" on rent control), a tenant who sublets is basically making money off a subsidized apartment that is basically financed by other tenants.
Why, that sounds like the right thing to do. Who can see the harm in that?
Now suppose your neighbor has twelve "best friends" who just happen to be illegal aliens or gangbangers or thieving crackheads...
If you cherry-pick specific, anecdotal examples, you can convince a lot of mushy skulls to agree with your agenda.
You say you have a right to use your property as you see fit? Then you won't mind if I drill for oil in my back yard, right? Or start a pig farm?
I would stand for it. It is disheartening to see how many “conservatives” still engage in magical thinking regarding the state.
1. Having a contract is one thing, enforcing the terms of it is quite another. Anti subletting terms are fairly common, but in the airbnb world, probably unenforceable. You’ll probably see them go by the wayside and be priced accordingly. There is also an interesting legal question as to whether a short term “guest” is subletting or not. Probably turns on the terms of the contract.
2. Rent control is state implemented socialism. I have zero sympathy for the predictable consequences. Airbnb is merely scratching the surface of the evils of that practicee.
“The new owner’s taxes are 3x ours because the sale allows the property to be reassessed at it’s new value based on it’s sale price.”
If it weren’t for prop 13 his taxes would be 6x or 8x what you’re paying now with the added benefit of yours being that also.
The free market always benefits (defends) The Middle Class.
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