Rethinking the Impact of Airbnb Investments on Local Communities: Build Don't Buy

[Daniel Bourdeau]

Hi everyone,

As a fellow Airbnb investor, I've been reflecting deeply on our role in the real estate market and its broader implications. I recently came across a study from UPenn in 2019 that really put things into perspective. It quantified the impact of Airbnb listings on the housing market, showing that a 1% increase in Airbnb listings leads to a 0.018% increase in rents and a 0.026% increase in house prices.

This revelation led me to a significant shift in my business strategy. I've moved away acquiring and converting long-term rentals into short-term ones. Now, I focus exclusively on ground-up luxury builds. It's a decision driven not just by business considerations (these structures earn significantly more than basic houses) but by a conscious effort to mitigate the negative impacts on the housing market.

It strikes me that not many real estate investors ponder the ethical dimensions of their ventures or the ripple effects on the communities where they operate. Consider this: as the ratio of Airbnbs to long-term rentals increases, the availability of long-term housing for residents decreases. Where will our staff and contractors live if we buy up small communities?

This is more than just an invitation to a discussion - it's a call to introspection. How does your real estate journey affect the communities you're part of? I'm keen to hear your thoughts and experiences in this realm. Let's have an open and honest conversation about the ethics and impacts of our investment choices.

Looking forward to your insights,

Dan

[Bruce Woodruff]

Thoughts?

a) The numbers you show (if even true-college study) do not merit even a yawn....a .018% increase in rents? The horrors.....

b) Where will our staff and Contractors live? Where they always have, outside the city where they commute to work. Not a problem.

c) It's nice that you can focus on 'ground-up luxury builds' but those are out of reach for all but the elites among us.

The housing market is driven (as it should be) by the market and supply-and-demand. These factors will always be the best arbiters of the market.....and it will self-correct as it always does. One only needs to look at the history of the STR market over the past 5 years as an example.

Just my .02