This has had the effect of driving the costs of rentals up. (See here)
The pandemic lock-down is wiping out the people speculating on properties as pricey short term rentals:
For years, Cheryl Dopp considered the ding on her phone from a new Airbnb Inc. booking to be the sound of what she called “magical money.” A property she rented out in Jersey City, N.J., on Airbnb could gross more than $8,000 a month, she said, double what long-term tenants would pay.Airbnb thought that they would help people rent out spare rooms or basement apartments, and instead it has become a vehicle for unproductive real estate arbitrage, because everything in the United States becomes a vehicle for unproductive arbitrage.
Now, Ms. Dopp associates the dings with cancellations and financial misery. The 54-year-old information-technology contractor said she had about $10,000 in bookings evaporate overnight in March. She has $22,000 in monthly expenses for a largely Airbnb portfolio, she said, that included another Jersey City home and a house in Miami.
In her mind, the promise of more rental income offset the growing debt, she said. “I made a bargain with the devil.”
Ms. Dopp is part of an upper-crust dimension of the gig economy: property owners and speculators who bought or leased real estate in pursuit of Airbnb profits. Airbnb spawned a cottage industry of homeowners running their own property empires, turning the startup into a hotelier without any hotels.
In Nashville, Tenn., which grants permits to hosts, about a dozen of the city’s 3,600 nonowner-occupied listings—which include Airbnb properties—surfaced in the first days of April as advertisements for one-year leases on Zillow or Craigslist, according to Host Compliance LLC, a software provider tracking permits for the city. City leaders said they feared more would follow.
One of the apartments is in City View, a development with a swimming pool and rooftop views of downtown. When City View was completed in 2015, councilman Freddie O’Connell, who represents the district and has worked to rein in short-term rentals, hoped it would lure young professionals and families and help ease the city’s housing shortage. Instead, he said, it became a haven for short-term rentals.
Hopefully, the pandemic, and the collapse of Airbnb, will result in a reduction in long term rents that have priced people out of housing.