WATCH OUT, BOSTON! UMass study blames high rents on Air BNB!

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WATCH OUT, BOSTON! UMass study blames high rents on Air BNB!

Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes

Watch out Boston short-term rental owners!  Boston 25 News had a report this morning about a UMass study on Boston rentals.

http://www.fox25boston.com/video?videoId=682572778...

The study (to which they did not provide a link) is blaming the shortage of rental units and the rising prices on the increase in short term rentals.

They include footage of a mom with 3 kids (presumably single - no mention of dad), complaining about paying $1600/month in Allston, where the average rent over the last 6 months was $2,854.  

She's getting a KILLER deal on rent, but they make her out to be this poor downtrodden mom.

Typical of a biased media report, they claim correlation between the rise in Air BNB units and increasing rents, but failed to even address whether there is causation - they just assume it.  

They also include footage from a spokeman from ADCO - an alliance of 9 different "resident groups", talking about how bad things are for renters.

http://www.adco.rocks/

They're pushing for regulating Air BNB and presumably others like VRBO.  They even included a boneheaded statement from a real estate agent (!!!) agreeing that regulation is needed - and a mention of a state rep who has filed for more regulation and TAXATION of short term rentals.  Of course, politicians can't resist the urge to stick their hands in the pockets of you greedy property owners.

So watch out, Boston short term rental owners.  Here comes the onslaught of regulations and new taxes!

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
8y

So I guess the high rents in Boston for the 50 years before air b n b, was the market pricing in the expectation that air b n b would some day emerge and put pressure on available units for rent?

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y

    So I guess the high rents in Boston for the 50 years before air b n b, was the market pricing in the expectation that air b n b would some day emerge and put pressure on available units for rent?

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group546 Reviews
    WebsiteView Page
    2Reply
  • Charlie MacPherson
    OP
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    8y

    @Russell Brazil Exactly.  Correlation doesn't not mean causation.  

    Living people excluded, I can confidently state that 100% of people who ate carrots during their life eventually died.  That's 100% correlation.  

    Therefore, carrots cause death.  

    Therefore, we need to regulate and tax carrots.

    I swear, critical thinking is a lost skill.  Especially when ratings are at stake.

    4Reply
  • Jerry AgbonPro Member
    Raleigh, NC · Member since 2015 · 40 posts · 19 votes
    8y

    Ha... The mainstream media the favorite tool used by the thugs we call politicians, the bane of all problems to the common hard working man. Massachusetts is called Taxsachusetts for a reason, every and all activity must be taxed, any activity that isn't taxed must be labeled as illegal or bad, and therefor they must come up with a means of taxing it, even if the means is fraudulent. And we the sheeple of the state applaud, while we're being robed blind in the name of liberalism.

    Indeed we are witnessing the aftermath of the death of critical thinking!      

    1Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    8y

    Airbnb is a relatively new enterprise. Why should it not be regulated and taxes as all businesses are. Regulations and taxes contribute to the overall good of the communities involved. All businesses should be willing to be responsible and contribute.  

    1Reply
  • Cosmo Iannopollo
    Investor · Wakefield, MA · Member since 2016 · 107 posts · 71 votes
    8y

    I just moved to MA from CT. Couldn't believe how high the rents were. The mortgage on my two-unit house in New Haven is $500 cheaper than my rent in Wakefield. At least now I know who to blame. 

    (Insert sarcasm font)

    What's funny is, the politicians will use this report to tax the hell out of these short-term rentals, and then what? Even if they were the cause of high rents (they're not), the owners will simply raise their rates or sell to other investors who will maintain the high rates. 

    If they really want to lower the rents, keep hiking taxes to drive businesses out of state. 

    2Reply
  • Robert B.
    New York, NY · Member since 2018 · 7 posts · 8 votes
    8y

    What’s the argument that Airbnb does not lead to rent increases? It seems like basic supply and demand to me. Supply for renters is decreased because homes that were previously used as traditional rentals are now being converted to Airbnb properties. If you decrease supply and hold demand equal, surely prices will rise? 

    Here’s an actual study documenting the increase: https://www.google.com/amp/s/www.citylab.com/amp/article/535674/

    The problem Airbnb faces as opposed to say, Uber, is that one of the main groups that benefits from their existence is tourists and tourists can’t vote. Not to mention the lobbies of entrenched interests like hotels. I personally expect Airbnb to face strong headwinds in any cities that have a high proportion of renters and tight rental markets 

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  • Charlie MacPherson
    OP
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    8y

    @Thomas S.  It's a difference in philosophy.

    I think that property owners should have the freedom to do as they wish with their own property.  Striking the right balance between profit-killing regulation and endangering the public is a tricky thing.

    The free market does a very good job at sorting out bad operators - now more than ever, with the prevalence of social media as a feedback mechanism.

    Screw somebody once and it will be all over Twitter, Facebook, G+, Yelp, Angie's List in the blink of an eye.

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