Airbnb Reinvents Feudalism

Airbnb Reinvents Feudalism

Airbnb has launched a new long-term listing service intended to make it easier for would-be-renters to find apartments where they’re allowed to sublet short-term. The site, similar to Zillow or StreetEasy, currently shows listings for about 175 buildings in more than 25 U.S. locations.

Airbnb doesn’t own these apartments or buildings, instead they’re owned by management companies who’ve opted to partner with Airbnb. These partners include Equity Residential and Greystar Real Estate Partners LLC, and 10 other companies, according to a report from the Wall Street Journal. In exchange for listing their buildings on the new Airbnb site, these landlord companies will get to monitor all of the apartment statuses through an online dashboard, and receive a cut of the booking revenue from any sublets their tenants offer — generally 20%, according to WSJ.

Though Airbnb’s profits have reached record heights this year, and the number of overall listings on the platform has been rising, the number of listings in rental apartment buildings was down almost 5% in October 2022 vs. 2019 numbers, the Journal reports.

The company has decided the primary thing holding back apartment building supply on Airbnb from reaching its full potential is that people are too afraid of their landlords’ disapproval to list their home. “A lot of people are worried their landlord is going to say no, and that even raising the topic might disqualify them from becoming a tenant,” Airbnb co-founder and CSO Nathan Blecharczyk told WSJ.

Airbnb Reinvents Feudalism

So, in exchange for the promise of a landlord who won’t evict for Airbnb-ing and will take about one-fifth of the profits, users can browse and rent an “Airbnb friendly” apartment. It is Airbnb’s version of feudalism: use of a property in exchange for pay and protection.

“We believe cities can help renters better afford where they live by supporting Airbnb-friendly apartments and embracing policies that allow renters to share their space,” said Airbnb in a blog post announcing the new feature. Never mind that the proliferation of short-term vacation rentals like those offered through Airbnb is a big part of why rent prices have skyrocketed across major cities to begin with. Airbnbs eat into long-term housing stock and drive up rental value.

One 2017 study found that one-fifth of total rent increase nationwide between 2012 and 2016 was attributable to Airbnb. Another 2020 study found that every 1% increase in the number of Airbnb listings in a location leads to a subsequent 0.018% increase in rent prices.

The “Airbnb Effect” is real. So much so that some cities with dwindling housing supply have implemented regulations to try to combat the problem. Earlier this year, Atlanta began requiring short-term rental licenses, limiting the total number of licenses a person can be issued to two, and mandating that Airbnb listings within the Georgia city be registered to an owner or renter with a primary residence there.

But again, instead of admitting to their part in that issue, Airbnb has decided to tell you the best way to afford your rent is to make your place an Airbnb. They even offer a nifty little calculator tool that lets users calculate their potential earnings. Did you know that if you vacate your $US2,776 ($3,854) studio apartment in San Francisco for one week out of the month, you can make back $US900 ($1,249) of that rent money (not excluding taxes or host expenses)? Where would you sleep during those seven nights? Why not another Airbnb? What a deal.

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