Have the Airbnb Bans Backfired on Big Cities?

Dave:
What role do short-term rentals play in the broader economy? Do short-term rentals positively contribute to local economies, or do they raise rents and hurt affordability for locals? Today we’re digging into the economics of short-term rentals.

Dave:
Hey everyone, it’s Dave. If you’re watching on YouTube, you can see that we are bringing you this episode live in person recording from Airbnb’s office here in New York City. Today we’re talking to Taylor Marr, who is the senior housing economist at Airbnb. He’s formerly the Deputy Chief Economist of Redfin. You may have heard him on our sister podcast on the market. He’s been a frequent guest there. And Taylor is an authority on the housing market at large, but also now a specialist in the short term rental space. Today we’re going to discuss with Taylor his take on the economy and housing market overall, how the short-term rental space has changed since 2021 and the current state of short-term rentals and their impact on local economies.

Taylor:
Thank you for having me. It’s good to be here.

Dave:
Well, tell me about your, your role here at Airbnb. Last time we chatted, you were still at Redfin, so what is your new role?

Taylor:
That’s right. So I am Airbnb’s first ever senior housing economist, and I was brought on to really kick off and launch their housing research program. That is a program that, uh, we are doing some research internally to better understand the interaction between the housing market and the short-term rental industry, but also collaborate and share more data with academics. Uh, we also work with a housing council that we launch. These are a panel of experts outside of Airbnb, completely independent, that can help us advise on certain housing issues as well as that we can contribute to organizations that really support the growth of housing. There is undeniably a shortage of about three to 5 million homes in the US that is needed to solve the housing crisis. And we wanna also be a part of that solution and better understand which organizations are doing something. So we’ve donated millions of dollars to support different organizations, support their efforts, uh, to unlock more housing development. We’ve also, uh, you know, tried to work with academics to better understand, uh, the different ways that Airbnb, Airbnb listings or short-term rentals more broadly impact housing. And so by opening more data and really trying to increase this transparency, uh, that’s been some of the initiatives that I’ve been driving forward.

Dave:
Very cool. Well, congratulations. It sounds like an awesome job. Uh, I do wanna get into all the research you’re doing, but let’s just start by having a set the stage a little bit with the broader housing market, because I think that will help frame the rest of the conversation here for our audience.

Taylor:
Yeah. The housing market is basically facing the challenge that it has after coming down from a pandemic high, right? So had a sugar brush, flow rates, all of that. Everyone knows the context now that mortgage rates are up significantly. They’re past 7%, uh, down a little bit now, the lowest in six months today, which is great news. But overall, the housing market is in a tough spot. Still. Sales are low, prices are growing though mm-Hmm. <affirmative>. And they continue to appreciate at a robust pace. And overall the housing market is basically poised for stability and a little bit of improvement, uh, looking forward. But it’s still, you know, it didn’t crash though. So if we look back to a year ago when we saw rates were high, everyone thought, not everyone, but a lot of people were raising alarms saying, home prices are elevated, they’re gonna crash, right? Sales are gonna tank and we’re gonna enter into a recession. And yes, the housing market was hurt hard, uh, but the reality is things have stabilized. Sellers reacted by moving off onto the sidelines. Buyers are sort of waiting for an opportune moment. Uh, but there’s still a lot of demographic factors and long-term trends that create healthy demand stabilizing the market, the housing market, basically.

Dave:
Yeah, we did not see a crash. There are certainly some corrections going on regionally throughout the country, but I’m curious what you think we’ll see for the second half of the year. ’cause from where I’m sitting, inventory’s up like 23% ish year over year. And I’m just wondering if you think things will flatten out. ’cause in my mind that might create better buying conditions if there’s a little bit less competition, more optionality for investors, potential hosts.

Taylor:
That’s true. There are homes that are starting to sit a little bit longer on the market. They’re having to drop their price. That’s a good opportunity for some buyers that are saying, Hey, I’ve been, you know, waiting for rates to fall. They’re starting to come down a little bit, been waiting for prices to come down. There are some price cuts. So there are some opportunities for buyers to jump back in. Uh, at the same time, sellers are in the same boat. Most sellers, uh, are also a buyer and they’re moving up. And I’m, myself, I’m a homeowner, have a low rate. I’m sort of, you know, considering moving up, but I’m waiting for there to be better options, lower prices, uh, a little bit more favorable rates. And so I myself might decide to jump at that and then sell my property. So it’s sort of this great game of musical chairs.

Taylor:
Perfect analogy for the housing market, that once there’s enough favorable conditions. And prior to, you know, this month it was coming a lot from new construction, creating new home options. Uh, but that coupled with, you know, a little bit of homes that are dropping their prices and sitting longer, that will get more sellers to list to get up out of their chair to move to another one. And that can just create a more, uh, virtuous cycle of a little bit of improvement in housing. Now it’s still sort of constrained by affordability concerns. Prices are high, rates are high, mortgage payments are still very elevated, but it’s a little bit of a improvement to, you know, create circumstances where things aren’t worsening. Mm-Hmm. <affirmative> prices continue to grow. Sales start to improve a little bit.

Dave:
And how do these adverse or at least complex market conditions impact short-term rentals? And specifically, what do you see here at Airbnb?

Taylor:
Right, that’s a great question. There are a lot of ways that the macroeconomics of the housing market impacts the short-term rental market. And one example is that when the pandemic was going and rates were falling and a lot of people were moving around migrating, uh, we also saw some of the biggest increases in home equity ever. So homeowners gained about a 50% increase in, in equity during the pandemic. Uh, there was about $20 trillion of equity, uh, in the US housing market. That’s increased to over 30 million now. Mm-Hmm. <affirmative>. And this is just a massive handout of wealth to homeowners. Some of those homeowners were able to take advantage of that refinance, uh, and use some of that equity or sell to buy additional properties. Some of them got into real estate investing during the pandemic. Uh, but others just bought a vacation home. You know, they have enough wealth to buy a second home.

Taylor:
And we saw a big boom in second home purchases during the pandemic. Part of that was spurred on by a great real estate market with home price appreciation. And the second homes a lot of people were able to list them for, for rent on Airbnb or other providers. So that’s one way in which the housing market impacted. Now, reverse course, right? We saw mortgage rates. People are no longer buying second homes. <laugh> mortgage rates are too high. There were even some additional fees introduced for second homes. And so that limited people going out and acquiring a second home to vacation in, and then maybe rent out occasionally as well. Uh, but also it really limited some of the opportunities for real estate investing for the same reason now, uh, you know, there were still opportunities. There were a lot of homes that dropped their price, especially in markets that cooled.

Taylor:
And as the market is sort of pulling out of the bottom and we see a little bit of improvement in rates, people who have been maybe saving up over the last year trying to weight out these high rates. Mm-Hmm. <affirmative>, they’re also on the sidelines. You know, maybe it’s for real estate investing, but also even just people who wanted to get a bigger home add onto their home that maybe they could even rent out, build an A DU, uh, as zoning laws have have been changing to allow for more housing activity, that also shows up in some of the short-term rental Mm-hmm. Market opportunities as well. So the profitability also of the short-term rental market can impact the real estate market. So if it’s less advantageous to go and buy a, a second home in a vacation area and rented out because there’s maybe a lot of listings, uh, that also means that you might not see as much real estate activity in these vacation markets. So it does kind of go both ways. They interact in a lot of, you know, interesting ways that way. But, uh, but yes, so that’s some of the trends

Dave:
That’s super interesting. I hadn’t really thought about how profitability might slow down transaction volume in a short-term rental market because it’s not just people buying second homes to your point, but it’s also investors who are trying to get into those as well.

Dave:
Okay. We’re gonna take a short break, but on the other side, Taylor and I get into how short-term rental supply relates to the overall economy and the long-term impacts of short-term rental bans. Stay with us. Hey everyone. Welcome back to the show and my conversation with Taylor. Marr,

Dave:
Given that in the broader market we’ve seen transaction volume really come down since pandemic highs. Yeah. It’s down about 50%, right? It’s still, I think 25, 30% below pre pandemic levels. Are you seeing that reflected in the amount of supply of Airbnb listings and hosts? Like has it slowed down how many new hosts are coming onto the platform?

Taylor:
That’s a great question because it really contrasts what I just said, <laugh> about the ways that the housing market and the short-term rental market interact. And while, you know, on the margins looking at activity month to month of the real estate market, uh, and short-term rental, you know, new hosts coming on, those do relate quite a bit. At the same time, a lot of what’s going on in the short-term rental industry has nothing to do with the real estate market. Mm-Hmm. <affirmative>, it’s a lot driven by the eclipses going on. And people, you know, wanna list their home for Brent, there’s Taylor Swift concerts going around. Uh, you know, there are Paris Olympics and it’s also, you know, a whole more global industry with more complex environments, uh, in every country. And so you have a lot of listing activity of hosts deciding to rent their home out maybe while they travel or, uh, share a room. Or even someone who has a second home that maybe they were working remote in during the pandemic that now they don’t go to as often. And now they’re listing that out. And that activity is just not related as much to, you know, mortgage rates and fluctuations and price appreciation.

Dave:
I’m curious, you know, a lot has been made about the increase in short term rental supply. Yeah. Uh, just in general. And, you know, there’s talk that there’s oversaturation in the market, at least some among investors that I talk to. Mm-Hmm. <affirmative>, do you see that? Like, is revenue stable for most hosts or are people really competing against a lot more hosts these days?

Taylor:
You know, Airbnb is so global that like, there’s always these little markets that have different fluctuations. Sure. So it’s hard to speak to, you know, anything being indicative. But Air DNA does publish data, um, for the whole US at least. And they did cite that in 2023. So looking last year, there was actually a decline in the nightly rate that hosts are getting Mm-Hmm. <affirmative>. And part of that was due to there was a big increase in supply in 20 22, 20 23. Um, but a DR, the average daily rate for this year is actually according to air DNA for the US expected to increase. So that may have been limited. And of course there’s variation. You might have some markets, some cities where, uh, you see bigger drops or, you know, smaller increases or whatever else it might be. Uh, but what’s also always important is when you’re looking at the market wide averages, it doesn’t always reflect, you know, what the host experience was.

Taylor:
So a host might still have a decent increase because, you know, they were able to increase occupancy Mm-Hmm. <affirmative> or, you know, but sometimes looking at like new hosts of someone saying, oh sure, I’ll rent out my home. Um, let’s see if I, you know, get any, uh, offers. That new supply can also alter what the A DR is for a city can also alter occupancy. I think one of the misunderstandings is that every host, uh, is not trying to maximize occupancy. Like I, myself, I listed my home for rent, uh, when we were traveling. Mm-Hmm. <affirmative>. And, uh, I’m not trying to get it booked every single night that it’s available. I might just say, Hey, if the price is right, I’ll rent out my home. Mm-Hmm. <affirmative>. So I might increase that price I’m wanting in sacrifice of occupancy. And that’s the hard part with short-term rentals, is we don’t know exactly what every host is trying to do. And if they were all trying to, you know, maximize profits, you might see a little bit different trends, but a lot of people are just sharing their home. And that kind of shows up in the data a lot too. That is hard to separate out.

Dave:
That’s so true. I never really thought about that. <laugh>, your job must be very difficult because of that. Because from my perspective and those of our audience in BiggerPockets, usually they’re professional investors. You know, they’re looking to do this full-time and they are trying to maximize revenue. But there are tons of people who do this part-time or just opportunistically. And so I would imagine yeah. Pulling out the data is, is challenging. Mm-Hmm. <affirmative> for our audience of people who are trying to maximize revenue, do you have any data on trends or just tips that could help maximize revenue?

Taylor:
Absolutely. So we are getting into this experience economy age, right? Where increasingly people are paying for experiences. So it used to be where, you know, most of people are spending money on goods. Then we had the service economy in the US really expand over decades, and people started to spend more on service. So you go to a restaurant to get the service rather than just, uh, you know, pick up goods at a grocery store. Over the last 10, 15 years, increasingly people have been shifting their spending patterns to spend money on experiences. Hmm. That still might be a restaurant, but you’re no longer going to a restaurant like a diner just to get the food served to you and made for you. You’re also going for the experience. Maybe it’s to throw peanut shells on the floor or <laugh>, uh, to, you know, have it be a themed restaurant like a rainforest cafe.

Taylor:
So people are paying for experiences. And that’s also true when people travel. Increasingly people are wanting to stay in a place that’s unique, that offers a good experience. Maybe that’s coupled with an experience like a Taylor Swift concert or Mm-Hmm. <affirmative> an eclipse, as we mentioned. Uh, but especially what hosts are doing, uh, that they’re finding success in increasing occupancy or even the amount they can charge is making their listing stand out as a unique experience for a guest. Mm-Hmm. <affirmative>. Uh, so it’s not just a cookie cutter, you know, room, but it’s actually offering something different. And maybe, uh, you know, that’s how they design it. Maybe it’s some of the experiences they offer or recommendations that they offer, such as a local tour or something. Um, but those are things that hosts are doing in order to really improve and stand out compared to the competition, especially when there is a lot of supply Mm-Hmm. <affirmative> that might be necessary to kind of, um, you know, figure out if you can’t increase your price, you can also increase your bookings.

Dave:
What you’re saying makes a lot of sense. And it, it sort of jives with what we hear from investors in the industry. And it got me thinking, ’cause I, I only have one short term rental, but it’s got this vacant garage and I was thinking about turning it into a golf simulator. Yeah. ’cause people love those. Just trying to find ways to stand out Exactly. And, and demonstrate, uh, you know, that there’s something unique about my property versus all the other hosts out

Taylor:
There. That’s fantastic. Yeah. And sometimes that’s, you know, a simple amenity you could add. Sometimes it’s just the way you design your place and, you know, this is a, a beautiful scene and I just want to hang out here. You know, and that, and that also can be, uh, a part of it as well.

Dave:
Great. Well, I do wanna switch gears a little bit here. Taylor. Uh, Airbnb has published some really interesting research and data about the role that short-term rentals play in the broader economy, uh, and the housing market. So can you share with us some of the research that, that you’ve been doing about how short-term rentals impact local economies?

Taylor:
Yeah. So every time someone stays in an Airbnb, they’re often not just paying money to the hosts. And obviously that host can take that earnings, uh, those earnings and do a lot with it. They could spend it on, uh, their mortgage, which is the most, number one way that hosts are using their money is to pay for housing costs. In fact, 40% of hosts, uh, reported that the amount of money that they earn from Airbnb is a significant source of, uh, their housing. Interesting. Uh, being able to afford housing where they are, uh, which is great. But they also spend money on renovating their place. Sometimes they add additional real estate space. Uh, sometimes, you know, they just improve the quality of their unit. Uh, but then those guests also, the remaining amount, they spend it on local restaurants. Mm-Hmm. <affirmative>, they spend it on shopping entertainment.

Taylor:
And so what we can do is look at all of this activity that guests are spending, how often are they staying there? How much are they spending per night? And when we look at all of that, we see that overall in the us guests who stay with an Airbnb, uh, contribute about $85 billion to the US economy, that creates tens of thousands of jobs. Uh, and, you know, the massive amount of benefits that this also brings for tax revenue, uh, is just really amazing that a lot of this stays with the local hosts and stays with the local businesses. ’cause Airbnbs are usually dispersed much further from, uh, the city center, where you might have a lot more chain businesses or restaurants, corporate, uh, units versus, you know, hotels that are traditionally, uh, concentrated downtown Airbnbs are more dispersed towards, uh, outlying neighborhoods or even rural areas, supporting those local economies in a different, more unique way. And that economic impact also, uh, shows up in the tax revenue that these cities can then invest into local goods and services.

Dave:
Wow. That’s great to hear. I, I had no idea about that. And I imagine that was pretty difficult to calculate and figure out. I’m curious, would would the impact be similar if people were just traveling and staying at a hotel?

Taylor:
So, not exactly. And I already mentioned that people, uh, so New York City for an example, more than 80% of hotels in New York City are concentrated in Manhattan. Mm. In fact, a lot of ’em are in Midtown. And, uh, if you look at where short-term rentals were, uh, you know, a couple years ago, especially the majority were actually not in Manhattan. The majority were in the outer boroughs, and especially in more suburban areas. And when guests travel to these areas, they tend to support these local businesses. And that has a larger impact on jobs. And, uh, so, so the guests spending that comes from staying in Airbnb actually has larger impacts than when you’re staying at a hotel. Hmm. And at the same time, you know, now we’re in New York City, we don’t have as many, uh, short-term rentals now because of the recent loss. And because of that, that’s pushed up hotel prices. And so fewer guests also even travel to the city in general. So the economic impacts are partly, uh, you know, only available because of the increase of short-term rentals that helped re relax some of the accommodation prices. And that brought in more tourist activity. So that’s also an important factor of like, you know, some of that would be reabsorbed by hotels, but a lot of it also wouldn’t. And it would also show up in different, different places.

Dave:
That’s super interesting that, that it sort of grows the overall pie, right? Because the competition forces hotels to compete. Right. And they do that with price. And we’re sitting in New York City right now and staying in a hotel. I can speak to the fact that they’re extremely expensive here in New York. And just speaking to my own, uh, experience that’s limited, but with short term rentals, is that where I bought one? I bought one where there’s very few hotels. It’s in a ski town in Colorado. You think there’s a lot of hotels, there’s actually not Mm-Hmm. <affirmative> very many. Um, and like you said, some people wanna stay in a rural area, they’re in the mountains. They wanna have that experience of being up in the woods. Mm-Hmm. <affirmative> not necessarily in town or on the slopes. And so it allows people to have a different type of experience. And it also brings, I would think, tax revenue to this. My, the, the town I invest in is like a small little hamlet. Mm-Hmm. <affirmative> near the local town. It’s probably helping generate tax revenue Yeah. For, uh, a municipality that otherwise wouldn’t get that.

Taylor:
Absolutely. And you know, just speaking from personal experience, I have three boys when we travel, you know, we don’t fit into a hotel room anymore. And so oftentimes short-term rentals are really a key opportunity for us to go to a place and spend money in those local areas. And, uh, you know, so not having that accommodation option also oftentimes means we just don’t go there. We go somewhere else instead where we contribute to the local economy. And so that’s also what, uh, short-term rental supply offers in these ski towns too, is really a huge increase in economic activity that didn’t happen when most of those homes were someone’s second vacation home sitting empty. So Airbnb is making use of a lot of what would otherwise be vacant units. There are nearly 5 million vacant second homes in the US Wow. According to the census, which is really only about 3.2% of the US housing stock. And if I were to ask you, you know, do you think that number has grown over the last 15 years from 2007 before Airbnb existed? You know, what do you think?

Dave:
I would think that the number has declined.

Taylor:
Okay. Because

Dave:
People are more likely to list on platforms like Airbnb.

Taylor:
Well, here’s the thing. When someone’s listing their home as a short-term rental, uh, it shows up in this stock of vacant second homes. And there’s actually fewer, you’re right, there are fewer second homes and vacation rentals than there were before Airbnb existed. So Airbnb has not caused this massive acquisition of properties to, uh, to be someone’s second home or, or vacation rental. Instead. It’s really, there was a large stock, about 5 million, uh, vacant homes that were used for this purpose. There’s another 10 million that’s vacant. Mm-Hmm. <affirmative> for other reasons. Maybe it’s listed for rent on the market or for sale. Uh, but these vacant second homes are now being utilized by Airbnb. And really for every Airbnb that’s regularly rented out on the market in a place like Colorado, it’s about 16 times that are actually just sitting empty as someone’s second home that maybe they, uh, stay in for a month when they go skiing. And then they said empty. And so, you know, the one myth is that these properties would otherwise just be on the market. Mm-Hmm. <affirmative> the reality is most of them would actually otherwise just be empty as someone’s second home, which they were previously. If we look back at the data before, uh, the rise of the short-term rental industry grew.

Dave:
That’s so interesting because there is this narrative that Airbnb or short-term rentals in general, not specifically Airbnb, you know, has contributed in some way to the affordability issues that are going on in the housing market. Yeah. But it sounds like you believe that or the data shows that, um, these homes wouldn’t be listed as a long-term rental, for example, if they weren’t listed as a short-term rental, they would just be sitting vacant perhaps.

Taylor:
That’s exactly right. And I think that’s one of the biggest gaps in understanding that the reason I joined Airbnb is to lead off our housing research program to really better understand what is the supply. How many of our homes are actually just someone sharing a room, someone sharing their primary residence when they travel, like I myself have done, uh, or you know, is it someone who has acquired property to rent it out? And when we work to understand that, it also helps set up how we can better understand, uh, any housing impact, how it intersects with the local housing market. And as places have, you know, looks to restrict short-term rentals and we see people no longer able to list their home, the question is, what happens to those homes? Do they show up on the rental market? Mm-Hmm. <affirmative>. So New York City is just the best example of this ’cause it has recently enacted almost a year ago now.

Taylor:
What are the most strict regulations for short-term rentals? Mm-Hmm. <affirmative> in nearly the world. And as such, uh, you know, we have tens of thousands of fewer properties are actively being used as short-term rentals. Uh, there’s about 40,000 homes in the New York City rental market available for rent in a given month. Have we seen any increase in that number as a result of unlocking short-term rentals? No, it’s actually declined. Uh, when we look at the data from StreetEasy on available rental inventory, there’s fewer homes available for rent now than there was before the law was enacted. And a lot of hosts are just, they use their home for other reasons. They might have family stand a few months of the year. And so now that they can’t use it as a short-term rental, it sits empty when their family’s not in it. Or, uh, when we look at how many listings are actually earning more money than they could on the long-term rental market in New York City, most of these listings where in neighborhoods where, uh, more than 90% where in neighborhoods where they could have earned more listing it for the long-term rent than they did earn as a short-term rental.

Taylor:
And that just speaks to, there are other reasons other than just simply trying to maximize profits and not putting it on the long-term rental market, that they are using it as a short-term rental. And so I think that’s also trying to understand, you know, when these listings aren’t being used as short-term rentals, when whether it’s a renter renting out their home, a homeowner who’s renting out their home, or an investor or a second homeowner, you know, what happens to the supply? It’s not always the case that Mm-Hmm. <affirmative>, it’s one for one, just gonna go to the long-term rental market. Some might list it for sale, some might just let it sit empty and use it for other purposes too.

Dave:
And this seems to be backed up by third party research, not just the Mm-Hmm. <affirmative> research you’re doing here at Airbnb, I think I talked about in a recent episode, but I think there was a, uh, from Harvard was it, was it there was a study recently that’s right. About the impact of on rent prices, uh, due to the short term rental ban. And I forget the exact details, but I remember that it was pretty negligible. Mm-Hmm. <affirmative>. Right. And the places where there even was a decline in rent or a positive trend, it was mostly in affluent areas anyway. So it wasn’t necessarily even helping the folks that the ban was intended

Taylor:
To help. That’s exactly right. A lot of the units also can be at the high end that maybe get listed for sale. Um, so if, you know, looking at affordable housing needs, it’s not necessarily coming from short-term rental options.

Dave:
Okay. We’re about to take one last break to hear from our sponsors, but we’ll be right back with more discussions. Add Taylor’s tips for short-term rental investors. Welcome back to bigger news. Let’s jump back in with Taylor Marr.

Taylor:
There are a lot of unintended consequences. So we mentioned the economic impact that these listings provide. It’s local jobs that is providing source of income for the hosts as well. But also, uh, there’s a lot of ways that if you could rent out your property on an Airbnb, you’re more likely to invest in, you know, building real estate. ’cause that value is, uh, unlocked as well. And there’s even a study that was done out of Los Angeles that looked at local regulations for short-term rentals, and they found that there was a 9% drop in permit activity in places that restricted short-term rentals relative to those that didn’t. And here’s the thing for when you zoom into properties that, uh, you know, are difficult to finance, but also make great rental options like accessory dwelling units, those drop 17%. And so by removing the ability, you also are overall dampening the housing construction.

Taylor:
And there are a lot of other economic benefits that come with, you know, short-term rentals thriving in a, in a place. But I think people, you know, might look at just one slice of the pie not understanding all of these other ways that they impact, uh, the local market. So that’s also key to understanding is, you know, what are all the other ways that it impacts? It reduces things like financial, uh, delinquencies on mortgages because someone can, if they’re, you know, see a cut to their income, they could rent out their property and, you know, generate to cover some of those costs. And this is, you know, backed by third party research academic papers that have focused on this. Um, so, and it’s, it’s sort of like, what do we know? What do we don’t know? And how can we help develop more research, uh, as to better understanding the all the ways that the short-term rental industry interacts with the broader housing market.

Dave:
It’s super cool that you’re doing all this research. ’cause it, I I get it. It’s sort of logically makes sense when you’re like, oh, you know, rent is super high. Yeah. Because there are short term rentals, or at least that’s one of the contributing factors, but obviously res your research here and of course you work for Airbnb. Third party data is also supporting this. And I hadn’t even thought about that idea of the disincentive it creates for building Mm-Hmm. <affirmative>, um, and how that actually in the long run might make rent prices even higher because That’s right. As you and I know from just talking about the housing market in general, like the solution to the affordability problem long term has to be more supply. Yeah. And so anything that’s gonna inhibit supply and builders building is probably gonna be detrimental in the long run.

Taylor:
That’s exactly right. I mean, it is undeniable that there is a housing crisis that people are struggling with rents, that people are having a hard time coming up with a down payment ’cause prices are high. The problem is, I think there’s a lot of scapegoats in the housing industry, whether that’s certain investors or short-term rentals. And the thing I worry about is that cities use these scapegoats as a political win Mm-Hmm. <affirmative> rather than doing what’s necessary to unlock more housing development, whether that’s zoning reform or encouraging, uh, you know, building code reform, whatever else it could be that would allow for more housing construction. And at the end of the day, that’s what makes a difference. We see that in Minneapolis after their zoning reform. We’ve seen a massive increase in multifamily permits, uh, over the last few years. Mm-Hmm. <affirmative>. And that’s resulted in drop in rents.

Taylor:
Now, it took a while ’cause that was back in 2017 or so. It took a while for that to, to really come to fruition. Uh, but we’ve seen it in place after place. Austin is another recent example where they made some zoning reforms in 2015 that’s resulted in more housing construction. Uh, Montana has made some big statewide reforms and these reforms that are unlocking more housing construction are really what works. And, uh, meanwhile, you know, the short term rentals can help contribute to housing affordability. They can also provide some opportunities for host to earn money to, you know, make their mortgage payments as well, to share their home. And, uh, and so, you know, there’s also just in our country, we’ve shared our homes as far back as since our founding, even George Washington, if you go to Mount Vernon, half of Mount Vernon is just guest rooms really for people that stayed there.

Taylor:
Absolutely. And up, up and down the East coast, you will find, you know, plaques that say Thomas Jefferson stayed here. And in fact, before he was inaugurated, he was staying at a boarding house in, uh, uh, in the Northeast. And all around, even Boston at one point was about 50% boarding houses and, and which is equivalently short term rentals, bed, bed and breakfasts. Uh, but zoning in the, you know, about a hundred years ago, really restricted single room occupancy and limited the potential for people to do this. And so there’s, there’s just really a lot of benefits that go back as old as time Mm-Hmm. <affirmative> to being able to open your home and share it with a guest. And that brings about a lot of, a lot of, you know, benefits to the broader community as well.

Dave:
Yeah, it’s a great point. And I, I echo your concern about short term political maneuvering that avoids solutions that take a long time. Right? Like it’s easy to say, oh, we’re gonna ban Airbnbs. And I’m sure constituents might, if they haven’t read your research <laugh>, um, might, might think that that’s going to work. But then it sort of avoids these bigger longer term initiatives like the one you mentioned in Minnesota Yeah. Where you actually do see rents coming down because they enable more supply. Yeah. And I know that that’s probably not the sexiest thing to campaign on. Mm-Hmm. <affirmative>. But, you know, the evidence and the data bears out that that’s actually what needs to be happening.

Taylor:
Right. And Airbnb wants to work with cities to help them find solutions, whether maybe there are some regulations that are needed to, uh, to limit any impact on housing. There’s certainly some markets where that might be needed. And Airbnb works with policymakers. They support clear, good common sense regulations. Uh, but at the same time, you know, we have a seat at the table with these local policy makers and I was really excited to help, you know, talk about what are things cities can do to open up the housing construction to, to really help create real solutions for housing affordability. And, uh, and so we start to see, you know, some successes there all around. But, uh, but there’s a lot more that’s needed, you know, for, for cities to understand what actually helps, uh, create, you know, the, the things that their locals need.

Dave:
Great. Well, Taylor, thank you so much for sharing this research with us. Mm-Hmm. <affirmative>, before we get outta here, do you have any last tips for, uh, our audience of real estate investors, short term rental investors?

Taylor:
You know, I think the tips are to always be on the lookout for different events and opportunities where we saw more than a thousand percent increase in people looking for homes along the solar eclipse path. Hmm. We saw a lot of hosts list their home for the first time for the Paris Olympics. And, you know, these other events that come around, there’s even, you know, natural events like, uh, animal migrations or, you know, there’s creativity in terms of what to look for for opportunities. And, uh, that’s increasingly, again, going back to the experience economy, it’s increasingly what people are wanting. They’re wanting these unique opportunities to say, I, you know, I traveled here. I did this one thing. Um, and so that’s something that, uh, I think people can be on the lookout for.

Dave:
Great. Well, thank you so much, Taylor. We really appreciate you being here. And thank you all so much for watching and listening to this episode of the BiggerPockets Real Estate Podcast. We will make sure to put Taylor’s contact information in the show notes below. Thanks again for listening and we’ll see you for the next episode very soon.