The morality of short term rentals

[Robert Frazier]

This is just a question I’ve been wondering as we deal with a huge housing crisis in our city.

is it moral to convert properties to short term rentals in a city with a deep housing crisis?


if a city has 500 units converted from long term to str, then the average occupancy is 70%, we have lost 54,000 nights of housing per year.


If vacancy is less than 1%, those 500 units of housing could be responsible for a significant amount of upward pressure on housing prices.

with the high cost of management for str, wouldn’t the world be better off with less of them?

[Jim K.]

Quote from @Robert Frazier:

This is just a question I’ve been wondering as we deal with a huge housing crisis in our city.

is it moral to convert properties to short term rentals in a city with a deep housing crisis?


if a city has 500 units converted from long term to str, then the average occupancy is 70%, we have lost 54,000 nights of housing per year.


If vacancy is less than 1%, those 500 units of housing could be responsible for a significant amount of upward pressure on housing prices.

with the high cost of management for str, wouldn’t the world be better off with less of them?

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I’m working through it myself.

People can do what they want with their properties, I love helping people invest in properties. But my question is, is it good?

Using Kant’s categorical imperative, you could say clearly no.

We don’t ask enough questions about what is good here, we ask: ‘what’s our highest return?’ Instead. As people we have moral responsibilities to each other, even as soulless real estate investors we have to think about the cost our choices have on others.

 So I'm actually going to answer this, Robert. Are short-term rentals good for keeping the cost of local housing markets down? No, as you've clearly demonstrated.

But you can't get to any sort of categorical imperative this way.

1. STR units cost more to manage. Yes. They give local people jobs.
2. STR units encourage overnight tourism versus in-and-out day trips. They give local souvenir sellers money, local restaurants new business, local tour operators expanded client lists.
3. STR units help local businesses by housing short-term local workers in a more cost-effective and desirable alternative than hotels.
4. STR units, when taxed effectively, add more to local tax bases.
5. STR units provide competition to hotels, especially during peak seasons/festivals/major events, which redistributes profits from hotel stakeholders (who are often not local) to locals.