George Boardman: Airbnb’s impact on the affordable housing crisis, fast money, and MIA
Observations from the center stripe: Money making edition
WHEN THE price of gas goes up 12 cents a gallon Wednesday, don’t yell at the attendant. Yell at the state Legislature … HERE’S A sure-fire money maker: You will be fined if you’re looking at your cell phone when you cross the street in Honolulu … THIS WILL help sales: Stanford researchers claim people who smoke pot every day have 20 percent more sex than people who don’t indulge … WITHHOLDING 200 files on the Kennedy assassination probe will just fuel more conspiracy theories … THE FEDS had 25 years to decide what files to withhold. Why do they need another six months? … I STILL haven’t found the name of Senator Ted Cruz’s father in any of the files …
Local officials discussing solutions to the affordable housing crisis might want to take a closer look at how much Airbnb contributes to the problem, because new research concludes the home-sharing service doesn’t help.
Three researchers led by Edward Kung, assistant professor of economics at UCLA, looked at rents and home prices in the 100 largest metro areas in the U.S. between 2012 and 2016, and found that a 10 percent increase in Airbnb listings leads to a 0.39 percent increase in rents and a 0.64 percent increase in house prices.
“That may sound minuscule, but between 2012 and 2016, rents rose by about 2.2 percent annually, so a 0.39 percent increase in that context isn’t very small at all,” Kung said. The same is true for home prices, which rose by an average of about 4.8 percent annually during the same period, he added.
Airbnb puts more pressure on prices in a nation where about one-third of Americans spent more than 30 percent of their income on rent or a mortgage in 2015, according to a study done by Harvard University. Economists generally recommend that families spend no more than 30 percent of their income on housing.
“Airbnb takes supply out of the long-term rental market, which caters to residents looking to rent permanent homes …,” Kung said. “This increases the price for residents looking for long-term housing. Home prices rise with rents.” The problem can be particularly acute in neighborhoods with a lot of absentee owners.
Kung recommends that local authorities try to stop the conversion of long-term rental units to short-term. “But regulators should not restrict home sharing for people who would not make their homes into long-term rentals anyway,” he said, such as people renting out a spare room or renting their house while they’re on vacation.
“The challenge is to fully understand the intent of homeowners,” Kung said.
Speed of light
The state won’t start collecting the 12-cent increase in the gas tax passed to fix our crumbling highway system until Wednesday, but Caltrans is already starting to spend the money.
The state’s highway agency, known in the past for its glacial pace, announced recently that it has expedited $5 billion in “fix-it-first” projects since SB 1 became law in April. The money includes $6 million to repair culverts along Highway 49 from the Placer County line to north of Lime Kiln Road, along with numerous improvements along U.S. 80 and I 5.
The press release announcing all of these goodies “coincided” with an article written for The Sacramento Bee by Brian Kelly, secretary of the state Transportation Agency, stating that red states are joining the Golden State in raising taxes to repair their roadways. I’m guessing the same or similar articles will appear in other major newspapers in the state.
I also suspect this pell-mell rush to spend the money has a lot to do with the Republican effort to get a measure on next year’s ballot to let voters decide if they want to pay the tax increase.
There’s no denying that California’s highway system, which accommodates more vehicles than most countries, is falling apart. Little help can be expected from the federal government, where Congress has refused to raise the gasoline tax for almost 25 years. The federal Highway Trust Fund, which is supposed to funnel that money into transportation projects around the country, is projected to be $20 billion in the hole by 2020.
A good highway system is crucial to supporting the sixth largest economy in the world, and in a part of the world that is susceptible to earthquakes and hellacious wild fires, good roads are vital for escape and recovery. Look at Puerto Rico, where just 392 miles of the island’s 5,073 miles of road were usable a month after Hurricane Maria, frustrating relief and recovery efforts.
Opponents of California’s gas tax increase haven’t said where we can get the money to fix our roads. Maybe they want to return to the horse and buggy days.
Missing in action
The Los Angeles Times and The Sacramento Bee have been doing a lot of tongue-clucking and finger pointing since The New York Times exposed Hollywood big shot Harvey Weinstein as a serial sexual predator.
The number of women who have come forward since the original article appeared to accuse Weinstein of either bullying or assaulting them in the last 20 years suggests Weinstein’s behavior was one of the biggest open secrets in Tinsel Town.
The fallout has spread to the state capitol, where more than 140 female legislators, capitol staffers, lobbyists and political consultants signed an open letter denouncing “pervasive” sexual harassment and other misconduct. State Senate President Pro Tem Kevin de Leon, who has declared his candidacy for Dianne Feinstein’s U.S. Senate seat, promptly hired two outside law firms to investigate the charges.
The state’s major newspapers have appropriately condemned this boorish behavior, but have been silent on how a newspaper 3,000 miles away managed to beat them on one of the biggest stories in decades.
The Los Angeles Times, the state’s biggest and for decades its best newspaper, won numerous awards for its investigative reporting when the Chandler family owned the company. A scandal like this would not have gone unnoticed when Otis Chandler was running the paper.
The current owner, Tronc, has cut the staff in half since 2001 and is apparently less interested in smashing icons. Dean Baquet, the editor of The New York Times, quit the top job at the L.A. Times because he didn’t want to make the cuts management ordered. Timidity is apparently a by-product of the reduced staff.
Then there’s The Sacramento Bee, which has been in the McClatchy family for 160 years. While the paper has also undergone sharp staff reductions, The Bee has maintained its coverage of state government, part of its professed mission to hold the powerful accountable.
But apparently none of the reporters who hang out under the capitol dome had a clue about what was going on, or weren’t interested in checking out the rumors and innuendo. Dan Walters, who some people think has been covering capitol politics since Leland Stanford was governor, wrote a column recently in which he recounted three instances of sexual misconduct known to “capitol old-timers.”
Why are we just hearing about this stuff now? Walters no longer works for the paper, but the female editor of The Bee might want to put that question to her staff editors and political reporters.
George Boardman lives at Lake of the Pines. His column is published Mondays by The Union. Write to him at email@example.com.
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