Airbnb and Relative Villainy

The NYT has a piece up about Airbnb, which lets people sublet out their apartment for people to use as quasi-hotels.  I have very mixed feelings about it (and have a lot of friends who use it).  On the one hand, it is a neat solution with a lot of potential to massively improve the availability, flexibility, and cost of short-term housing.  On the other hand, their business is built on large-scale lawbreaking.  The subleasing most people are using Airbnb for is very often straightforwardly forbidden by their leases.  It’d be wonderful and great for consumers if this weren’t the case, but unfortunately that just isn’t so.

However, you should basically dismiss anything the hotel industry says.  They are in the enviable position of an oligopoly over short-term housing in New York City.  It’s nice work if you can get it – extremely lucrative!  The lucrativeness comes from higher prices, lower supplies, and lower consumer surplus.  Regardless of the subleasing legal situation, the massive resources that the hotel industry is bringing to bear against Airbnb should be prima facie evidence that it’s good for consumers.

 

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