The prevailing view on short-term rentals right now seems to be this:

That is, it's viewed as a zero-sum game between residents and tourists. There are only so many homes within a city, and so if any of them are to turn into short-term rentals, then it is a direct reduction in the supply of available long-term homes. This can also happen very quickly given the asset-light nature of Airbnb and the fact that these spaces aren't usually purpose-built.

It is for this reason that many cities have enacted strict short-term rental laws that basically only allow you to rent out your principal residence when you're not around or if you happen to have extra space. In the case of New York, you have to be physically present when the dwelling is being rented, and so the use case is exclusively "I have extra space for you."

Either way, the basic idea is to stop people from removing homes from the long-term market. I do, however, find it curious that reductions in housing supply seem to be generally viewed as bad, but that increases in housing supply are often met with skepticism. Doesn't housing supply work in both directions? Why aren't more people clamouring for new homes to be built?

Where my head is at on this issue is that I don't see it as a zero-sum game. I believe that there should be rules and regulations around short-term rentals, but that they shouldn't stamp out all use cases other than "here's an air mattress in my living room." At the same time, I think we should be viewing this as an opportunity. Clearly we need more homes, more hotels, and more short-term rentals.

It's only zero-sum if we make it that way.

In a recent interview with FT, the CEO of Airbnb, Brian Chesky, said that the company is looking at the following expansion plans:

• Offering long-term rentals of up to one year (currently, only about 18% of bookings on the platform are for 30 days or longer)

• Offering more "things to do on your trip", including car rentals and dining

These brand extensions make natural sense. You book a trip and then maybe you need a car, or something fun to do. I have used Airbnb "experiences" on a number of occasions to book things like boat tours and photographers. It's a great service.

Perhaps more interesting, though, is how the housing component of their platform is evolving. They started by offering excess or found space for rent (which was very clever). Then it grew to become a short-term rental platform that competed with hotels.

This has created a significant amount of regulatory risk for the company (see New York), and so it's not surprising that they're looking at other ways of slicing up housing: rooms, nights, months, and now years.

Longer stays are less contentious.

If you're renting on a nightly basis, then you're an annoying tourist that is taking away housing. And if you're renting on a monthly basis, then you might be an annoying digital nomad and that is similarly problematic. But if you're renting for a year, well, then, that's perfectly fine.

Now you're just a normal city dweller.

Is there a world where Airbnb becomes a major platform for traditional long-term rentals?

This past week, New York City enacted a new short-term rental registration law that is not very friendly toward platforms like Airbnb and VRBO. Here are some of the new rules:

• All hosts must register with the city

• No more than 2 paying guests can stay in a short-term rental at one time, regardless of the size of the home (does this mean families are excluded?)

• Hosts and visitors must leave all doors inside the dwelling unlocked (presumably this is to stop people from creating self-contained suites within a larger home)

• And the host must be physically present while the dwelling is being rented

So in a way, this takes us back to the original use case of Airbnb: "Hey, I have extra space in my home. Would you like to rent this mostly clean air mattress in my living room and be my roommate for a bit?" Of course, this is not how most people like to Airbnb today. And so this is also a kind of ban on short-term rentals in New York City.

It's certainly stricter than the regulations we have in Toronto. Here, it must be your principal residence. Meaning you're only legally allowed to operate one short-term rental at a time. But you don't need to be physically present while the home is being rented. If you want to earn some extra cash while you're away in Rio de Janeiro for New Year's Eve, you can do that.

However, the rules are still fairly strict. For instance, if you have a basement apartment or a laneway suite on your property, you are not technically permitted to short-term rent these dwellings, even if you live in the main portion of the home. It has to be your exact principal residence.

Presumably the intent behind this is to not remove any housing from the long-term rental market. And if it's your principal residence, then yeah, there's no net loss. Though this feels like an overreach to me. It's the same property and a homeowner could very easily decide to not even do a long-term rental in these secondary suites.

But overall, I guess it's still slightly more flexible than forcing hostel-like short-term rentals. Long live the hotel?

The prevailing view on short-term rentals right now seems to be this:

That is, it's viewed as a zero-sum game between residents and tourists. There are only so many homes within a city, and so if any of them are to turn into short-term rentals, then it is a direct reduction in the supply of available long-term homes. This can also happen very quickly given the asset-light nature of Airbnb and the fact that these spaces aren't usually purpose-built.

It is for this reason that many cities have enacted strict short-term rental laws that basically only allow you to rent out your principal residence when you're not around or if you happen to have extra space. In the case of New York, you have to be physically present when the dwelling is being rented, and so the use case is exclusively "I have extra space for you."

Either way, the basic idea is to stop people from removing homes from the long-term market. I do, however, find it curious that reductions in housing supply seem to be generally viewed as bad, but that increases in housing supply are often met with skepticism. Doesn't housing supply work in both directions? Why aren't more people clamouring for new homes to be built?

Where my head is at on this issue is that I don't see it as a zero-sum game. I believe that there should be rules and regulations around short-term rentals, but that they shouldn't stamp out all use cases other than "here's an air mattress in my living room." At the same time, I think we should be viewing this as an opportunity. Clearly we need more homes, more hotels, and more short-term rentals.

It's only zero-sum if we make it that way.

In a recent interview with FT, the CEO of Airbnb, Brian Chesky, said that the company is looking at the following expansion plans:

• Offering long-term rentals of up to one year (currently, only about 18% of bookings on the platform are for 30 days or longer)

• Offering more "things to do on your trip", including car rentals and dining

These brand extensions make natural sense. You book a trip and then maybe you need a car, or something fun to do. I have used Airbnb "experiences" on a number of occasions to book things like boat tours and photographers. It's a great service.

Perhaps more interesting, though, is how the housing component of their platform is evolving. They started by offering excess or found space for rent (which was very clever). Then it grew to become a short-term rental platform that competed with hotels.

This has created a significant amount of regulatory risk for the company (see New York), and so it's not surprising that they're looking at other ways of slicing up housing: rooms, nights, months, and now years.

Longer stays are less contentious.

If you're renting on a nightly basis, then you're an annoying tourist that is taking away housing. And if you're renting on a monthly basis, then you might be an annoying digital nomad and that is similarly problematic. But if you're renting for a year, well, then, that's perfectly fine.

Now you're just a normal city dweller.

Is there a world where Airbnb becomes a major platform for traditional long-term rentals?

This past week, New York City enacted a new short-term rental registration law that is not very friendly toward platforms like Airbnb and VRBO. Here are some of the new rules:

• All hosts must register with the city

• No more than 2 paying guests can stay in a short-term rental at one time, regardless of the size of the home (does this mean families are excluded?)

• Hosts and visitors must leave all doors inside the dwelling unlocked (presumably this is to stop people from creating self-contained suites within a larger home)

• And the host must be physically present while the dwelling is being rented

So in a way, this takes us back to the original use case of Airbnb: "Hey, I have extra space in my home. Would you like to rent this mostly clean air mattress in my living room and be my roommate for a bit?" Of course, this is not how most people like to Airbnb today. And so this is also a kind of ban on short-term rentals in New York City.

It's certainly stricter than the regulations we have in Toronto. Here, it must be your principal residence. Meaning you're only legally allowed to operate one short-term rental at a time. But you don't need to be physically present while the home is being rented. If you want to earn some extra cash while you're away in Rio de Janeiro for New Year's Eve, you can do that.

However, the rules are still fairly strict. For instance, if you have a basement apartment or a laneway suite on your property, you are not technically permitted to short-term rent these dwellings, even if you live in the main portion of the home. It has to be your exact principal residence.

Presumably the intent behind this is to not remove any housing from the long-term rental market. And if it's your principal residence, then yeah, there's no net loss. Though this feels like an overreach to me. It's the same property and a homeowner could very easily decide to not even do a long-term rental in these secondary suites.

But overall, I guess it's still slightly more flexible than forcing hostel-like short-term rentals. Long live the hotel?