New York politicians’ attacks on Airbnb are now getting national press; they argue that because Airbnb units could be used for long-term rentals, Airbnb reduces the housing supply and thus raises rents.
But just as a matter of principle, this claim leads to absurd results. The logic underlying the claim is: a housing unit that is used for short-term rentals such as Airbnb could be easily used for long-term rentals. Thus, Airbnb reduces the long-term housing supply.
But this argument proves too much. If you own a house, your house could also be used for long-term rentals. If you have a spare room, you could rent out that spare room. And even if you rent out every room in the house, your house sits on land that could be used for a much larger number of rental units. Since there are far more single-family houses than there are Airbnb units, bulldozing every house in the city would increase housing supply to a much greater extent than would outlawing Airbnb. Does this mean the city should bulldoze your house to build more rental housing?
