Thursday, September 29, 2016

Is Airbnb The Real Scourge?

Increasingly, one wonders who or what is the principal target of those who express their ire over so-called saturation. For some, the most extreme wing, it is all tourism. For others, it is the hoteliers. Or holiday rentals. Or cruise ships.

The latter is an irrelevant category. Irrelevant anywhere in Mallorca that isn't Palma. Forget the cruise passengers. They make for useful propaganda, but they are not central to the debate.

What about hoteliers, then? Well, if one believes that a barely increased number of hotel places this century represents saturation, then hoteliers are at fault. They aren't of course. They haven't been adding to the "crisis" except by knocking out higher occupancy levels. Even these are marginal in adding to human pressure. When one can talk of high summer 90 or 91 per cent one year, then 94 or 95 another, there is clearly an increase, but it doesn't amount to overcrowding. Forget the hoteliers as well.

Which leaves us with holiday rentals. President Armengol suggested recently that it is too simplistic to charge them with being the cause. Simplistic perhaps. But probably accurate.

Some of those who have been railing recently about limits or reduction border on being cranks with no coherent programme for economic alternatives, save for one inspired by impractical anti-capitalist quasi-anarchy. Others are anything but cranks. They are extremely sensible. And amidst their sense, they identify a real issue - that of housing.

This has been a theme that the saturation argument has raised before this summer, but it is one that needs to be far more seriously and urgently addressed. Holiday rentals are depriving people of long-term accommodation, and where they can find it, it is becoming less affordable. One can only see this situation becoming more critical.

The left are in a quandary over holiday lets. An argument is that making a return on a property is a right that should not be denied, if this return is a means of providing an adequate income. A further ingredient is that there are elements of the left who take great issue with the hoteliers, especially the larger ones. They are all for hoteliers' noses being put out of joint; private accommodation is one way of achieving this.

In terms of the market in general, the left, instinctively prone to market intervention and interference, are finding this interference to be not as easy as it might once have been. Institutional and legal bases, be they in Mallorca, Spain or many other places, make interference complicated. But what interference might there be? Denying someone the right to rent out a property runs counter to leftist thinking. At the same time, however, it can deny a worker the right to long-term accommodation, while by its very existence it contributes to additional tourism mass. It's not simplistic.

There are of course degrees of rental. The single property owner is quite different to the one with multiple properties, but where is the line drawn? Can it be drawn? The distinction seems to be coming less and less relevant as the left take on the seemingly unstoppable momentum behind tourist accommodation rental. In Barcelona, the mayor Ada Colau, who shot to prominence as an activist who founded the movement against evictions, has proposed caps on prices for long-term rentals (citing Paris and Berlin as examples of where this is done). She has also been closing down apartments used for tourists and issuing warnings to Airbnb and others: they can expect fines of upwards of 600,000 euros if they don't stop promoting illegal accommodation.

But owners, and not just those with several properties, have fired back by insisting on their rights to rent out. In so doing, they are expressing the rights of a totally free market, something with which Colau and others towards the far left have great difficulty. These owners point to a form of liberation offered by Airbnb and others - the democratisation of property, the very essence of the so-called collaborative economy of which Airbnb is at the forefront, and the very essence also of what some on the left advocate. The contradictions are profound.

It would be stretching things to say that Airbnb and the philosophy of the collaborative, shared economy is the root cause of saturation, overcrowding and distortions in the housing market. There has, after all, always been this rental market, but it is valid to say that Airbnb has expanded the market vastly, so much so that it is now becoming disproportionate. Its advance is such that the number of Airbnb travellers to Spain between June and August rose by more than 70% - Mallorca and Barcelona were among the favoured destinations.

This collaborative economy advocates property democratisation. It favours the individual's rights. But at what cost to other sectors of society? Is Airbnb the real scourge? If you're a free marketer, you'd prefer not to think so. However ... .

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