As a Floridian, my state benefits from the New York City dysfunction you describe. More tourists, more people locating and relocating in Florida, more growth overall.
As an American, my nation suffers when our largest city (and largest State, California) choose degrowth policies that make us poorer. Agglomeration effects and unrivaled natural beauty (CA, not NYC) are being wasted. I hope those places take your advice.
So often, when the question of Airbnb comes up, the answer is that it takes housing units out of the supply so it isn't the answer. I was surprised that Matt also answered in this way. Sure, this is true of units that act as full-time Airbnbs. But the original conceit of Airbnb was that regular people could rent out their apartments when they're traveling. This actually allowed many people to afford homes who otherwise couldn't have AND increased the supply of places to stay for tourists. As a result, Airbnb prices in the early days in NYC were low! I rented my 1bd penthouse in Brooklyn for $125/night when I traveled for work which is obviously so much cheaper than today's hotel prices. So why couldn't the regulation actually be that a housing unit can be rented on Airbnb for x weeks or months total out of the year, ensuring owner occupation the rest of the time?
I have a lot of energy for how bad the DC mayoral race field is but this may not be the place.
1. JLG did a really bad job as a council member
2. Kenyan McDuffie (who is probably going to win) has a huge, terrible gambling scandal
3. None of the serious people want to run.
It’s gonna be a real bad time. CFO’s office has been socializing this idea that a few ultra wealthy people are driving DC’s revenue surplus- and that the mass firing of federal workers and contractors doesn’t actually mean all that much for the city’s bottom line. I kinda believe that, but it does mean the next mayor has to figure out how not to rely on the Bessents and Sulzbergers of the world to fund DC.
I will say I think prolonged unemployment was a function of job and title. None of my economist or PhD friends got fired, and many, many of them got picked off because of the litigation consulting hiring war (fortunate for them that a firm doubled industry demand for economists and analysts almost overnight).
People at the low end of the GS scale are getting nailed, I suspect that a decent amount of people at the high end are/were fine.
Mostly you have the youngest people all get fired (under one year of service). There was a huge pile of bullshit because Trump and co tried to fire them for cause (performance) which would preclude them from being re-employed in Federal service.
Then you mostly had people who couldn’t RTO for various reasons and then a bunch of people from senior positions (SES) retire early.
“Imagine if The Argument had not just more money to do more of what it’s doing, but was also embedded in a much larger ecosystem that’s mostly about fashion, pop culture, sports, health, exercise, and other non-political topics that all exist as a mechanism to gently funnel audience to smart political takes.”
This is kind of interesting - I would have expected a more entertainment-oriented answer. What is the model—like a more centrist NYT? Is this how the founders envisioned Vox? Is the point of the money to obviate the need for clickbait?
Why do so many billionaires give money to far left lunatics?
It seems odd, there are plenty of right wing and politically neutral lunatics causes. But when ever I see a mad big ticket donation by a billionaire it will be to a prison abolition group rather than say the Moonies or an anti-seatbelt campaign.
"Ultimately whoever the G.O.P. nominee is ends up doing better than Trump did — and doing so without moderating as much as Trump did on abortion. This then sets up a rather different 2025 with fewer insane trade-policy moves and less aggression on interior enforcement. But whoever the new president is would still have the same basic problem of having promised to bring prices down without any real plan to achieve that."
I somewhat disagree, in that the three aforementioned Republicans named were pretty weak candidates with dull personalities (Haley maybe being an exception). Trump appearing on the ballot brings out more voters across the spectrum. If Harris ran against any of the other three I think she would have had a better shot at beating them. In any case it's futile 'woulda coulda shoulda' discourse.
Why is the current share of rent stabilized apartments driving up the price of market rate apartments? I would think it's the opposite -- if new apartments are market rate, then the existence of a lower price option makes the market rate ones slightly cheaper.
I think rent-stabilisation keeps people in homes they'd otherwise move out of. If you had to pay market rate, you might either move out of NYC altogether (e.g. if you're retired and don't need to be there to work), or downsize to a more affordable home. So in both cases that is juicing demand for NYC homes, raising prices on the remaining market-rate homes.
That sounds reasonable but the second order effect is downward pressure on the market rate. Landlords don’t make money on empty apartments. So an equilibrium with fewer people at lower rents, but many more people see their rents lower.
But in the usual supply/demand curve model, higher demand at a pricer lower than the point where the curves intersect shouldn't change the market price. So I'm still not sure.
There is a set of apartments that are rent stabilized that are kept off the market. Some need renovations to put back on the market and the owner is not willing to pay for them. Some are just kept off while the owners look for a way to get it off the rent stabilized list.
You segment the market. People don’t really leave rent controlled units often and so they behave more like owner occupied housing. So rent controlled units are an imperfect substitute for market rate apartments. This means they don’t compete rents down.
You really wouldn’t see an increase in market rents from rent controlled units if there was a fixed number of tenants, but for places like NYC there are far more tenants competing for units than units available.
(Oh and there is research that shows corporate investment in housing markets converts owner owned housing into rental units and this drives down rents due to this conversion. I can try to dig up the econ papers, but Noah Smith has cited them.)
On that last para the effects are miniscule but significant, so the way to frame it is “eh.”
There’s another paper floating around that argues private equity is a much bigger deal in converting homes to rentals than people have said, but no one believes that guys way of measuring things (and you have to accept his assumptions for the effect to be true) and IIRC there’s too much secret data in the paper to falsify his statement
As a Floridian, my state benefits from the New York City dysfunction you describe. More tourists, more people locating and relocating in Florida, more growth overall.
As an American, my nation suffers when our largest city (and largest State, California) choose degrowth policies that make us poorer. Agglomeration effects and unrivaled natural beauty (CA, not NYC) are being wasted. I hope those places take your advice.
And DC!
So often, when the question of Airbnb comes up, the answer is that it takes housing units out of the supply so it isn't the answer. I was surprised that Matt also answered in this way. Sure, this is true of units that act as full-time Airbnbs. But the original conceit of Airbnb was that regular people could rent out their apartments when they're traveling. This actually allowed many people to afford homes who otherwise couldn't have AND increased the supply of places to stay for tourists. As a result, Airbnb prices in the early days in NYC were low! I rented my 1bd penthouse in Brooklyn for $125/night when I traveled for work which is obviously so much cheaper than today's hotel prices. So why couldn't the regulation actually be that a housing unit can be rented on Airbnb for x weeks or months total out of the year, ensuring owner occupation the rest of the time?
Completely agree a limit on days makes the most sense, it’s very weird no one talks about this as an option.
I used to Airbnb my apartment when I traveled for more than a week (so probably 15-20 days the whole year) and had a great experience.
DC limits the amount of time you can rent out an Airbnb you don’t live in to something like 30 days out of the year.
When enforced it works great. That “when enforced” can be the problem.
I have a lot of energy for how bad the DC mayoral race field is but this may not be the place.
1. JLG did a really bad job as a council member
2. Kenyan McDuffie (who is probably going to win) has a huge, terrible gambling scandal
3. None of the serious people want to run.
It’s gonna be a real bad time. CFO’s office has been socializing this idea that a few ultra wealthy people are driving DC’s revenue surplus- and that the mass firing of federal workers and contractors doesn’t actually mean all that much for the city’s bottom line. I kinda believe that, but it does mean the next mayor has to figure out how not to rely on the Bessents and Sulzbergers of the world to fund DC.
Many Feds can’t afford to live in DC and commute in. MD got screwed by the firings and DRP.
I think this is true for NoVa as well.
I will say I think prolonged unemployment was a function of job and title. None of my economist or PhD friends got fired, and many, many of them got picked off because of the litigation consulting hiring war (fortunate for them that a firm doubled industry demand for economists and analysts almost overnight).
People at the low end of the GS scale are getting nailed, I suspect that a decent amount of people at the high end are/were fine.
Has anyone done a study of who actually got laid off? You’re right that it would be pretty interesting to see where the axe actually fell.
Mostly you have the youngest people all get fired (under one year of service). There was a huge pile of bullshit because Trump and co tried to fire them for cause (performance) which would preclude them from being re-employed in Federal service.
Then you mostly had people who couldn’t RTO for various reasons and then a bunch of people from senior positions (SES) retire early.
Oh and no backfilling of vacant positions.
I would never work for Amazon. Too much stress. Also I am not doing that long of a commute for NOVA when my wife works in Bmore.
I really wish I could wave a magic wand and make Matt dictator of NY.
More or less than Tisch?
“Imagine if The Argument had not just more money to do more of what it’s doing, but was also embedded in a much larger ecosystem that’s mostly about fashion, pop culture, sports, health, exercise, and other non-political topics that all exist as a mechanism to gently funnel audience to smart political takes.”
This is kind of interesting - I would have expected a more entertainment-oriented answer. What is the model—like a more centrist NYT? Is this how the founders envisioned Vox? Is the point of the money to obviate the need for clickbait?
Yay free market revolution in New York City!
Wouldn't it be nice if, now that the GOP has abandoned it, the Democrats became the party of free markets?!
Why do so many billionaires give money to far left lunatics?
It seems odd, there are plenty of right wing and politically neutral lunatics causes. But when ever I see a mad big ticket donation by a billionaire it will be to a prison abolition group rather than say the Moonies or an anti-seatbelt campaign.
AUSTIN!
"Ultimately whoever the G.O.P. nominee is ends up doing better than Trump did — and doing so without moderating as much as Trump did on abortion. This then sets up a rather different 2025 with fewer insane trade-policy moves and less aggression on interior enforcement. But whoever the new president is would still have the same basic problem of having promised to bring prices down without any real plan to achieve that."
I somewhat disagree, in that the three aforementioned Republicans named were pretty weak candidates with dull personalities (Haley maybe being an exception). Trump appearing on the ballot brings out more voters across the spectrum. If Harris ran against any of the other three I think she would have had a better shot at beating them. In any case it's futile 'woulda coulda shoulda' discourse.
The big couterfatual is the Fed does not cause the Great Depression!
Why is the current share of rent stabilized apartments driving up the price of market rate apartments? I would think it's the opposite -- if new apartments are market rate, then the existence of a lower price option makes the market rate ones slightly cheaper.
I think rent-stabilisation keeps people in homes they'd otherwise move out of. If you had to pay market rate, you might either move out of NYC altogether (e.g. if you're retired and don't need to be there to work), or downsize to a more affordable home. So in both cases that is juicing demand for NYC homes, raising prices on the remaining market-rate homes.
That sounds reasonable but the second order effect is downward pressure on the market rate. Landlords don’t make money on empty apartments. So an equilibrium with fewer people at lower rents, but many more people see their rents lower.
The reductio is if there was only one market rate apartment it would sell for a billion dollars.
The other impact is on supply. Market rate apartments are more profitable to build, so you get more construction if everything was market rate.
But in the usual supply/demand curve model, higher demand at a pricer lower than the point where the curves intersect shouldn't change the market price. So I'm still not sure.
You shift the supply curve for market rate unit to the left when you create rent controlled units.
There is a set of apartments that are rent stabilized that are kept off the market. Some need renovations to put back on the market and the owner is not willing to pay for them. Some are just kept off while the owners look for a way to get it off the rent stabilized list.
You segment the market. People don’t really leave rent controlled units often and so they behave more like owner occupied housing. So rent controlled units are an imperfect substitute for market rate apartments. This means they don’t compete rents down.
You really wouldn’t see an increase in market rents from rent controlled units if there was a fixed number of tenants, but for places like NYC there are far more tenants competing for units than units available.
(Oh and there is research that shows corporate investment in housing markets converts owner owned housing into rental units and this drives down rents due to this conversion. I can try to dig up the econ papers, but Noah Smith has cited them.)
On that last para the effects are miniscule but significant, so the way to frame it is “eh.”
There’s another paper floating around that argues private equity is a much bigger deal in converting homes to rentals than people have said, but no one believes that guys way of measuring things (and you have to accept his assumptions for the effect to be true) and IIRC there’s too much secret data in the paper to falsify his statement