Let The Market Decide

We often hear that mantra from free-traders and staunch capitalists, but sometimes the situation isn’t that simple.  Take this example in the exquisitely-beautiful town of St. Ives, in Cornwall, Britishland:

Landlords and businesses have been buying up properties in the area and converting them into summer homes, meaning there is nowhere left for locals to rent.
Jasmin cannot find a new place to rent and her tenancy is due to end on May 10.  She has exhausted letting agents and spare room sites, and fears in three weeks she will be sleeping rough.

And from the local council:

“The boom in house prices and the demand for holiday accommodation is causing a significant reduction in the availability of homes to rent.  It matched sudden escalation in rental costs.
“Private landlords have been moving away from long-term letting and instead moving towards the short-term holiday market.”

Read the whole thing.

I know that many towns in rural counties Over Here have had the same problems — transplanted Californians, ’nuff said — to where locals with jobs in those towns have to find a place to live in further-off towns, sometimes as much as an hour’s drive (or more) away.

Jackson Hole in Wyoming, when I first drove through there back in 1987, was a one-horse town that had nothing to recommend it other than proximity to Yellowstone and a couple of ski runs;  now, it’s the place to find Hollywood types and other California scum in their vacation homes, with all the foul side-effects:  expensive housing, expensive eateries, empty streets out of season, and so on.

I don’t have any solutions — at least, not free-market solutions — so maybe it’s up to the local governments to step in;  although getting government involved usually if not always seems just to exacerbate the problem.

I welcome discussion on the topic, in Comments.


  1. There’s a similar situation going on here in the “Artist’s Colony of the Midwest”, where the powers that be have created exceptions in the zoning laws. A home owner can submit an application that carves out an exception in the Single Family Residence zoning category so that any given SFR can be claimed to be a Guest Cabin facility and may be rented at whim. This damaging in many ways and the only benefit is to the owner of the Cabin. Note, a “cabin” can be anything. The 2.2 mile long road I live on has 22 homes on it and about 5 of them have this exception. The traffic on the road has increased, causing maintenance issues, and the amount of roadside litter has increased as well. This is a rural community and the renters tend to drive faster and roadkill is more prevalent. People are allowed to shoot guns on their property and the renters do so on the rental properties with wanton abandon. 2 am, all day on the weekends, etc. IOW the established residents are required to accommodate the visiters without compensation and we have no choice in the matter. The owner of the cabins makes much more money on the property because of the increased rate of short term (daily) rents.

    The solution is as it has always been. The people at the top that have made this situation as it is should be found in the early morning hours in a ditch along a lonely country road, gutted and burning in diesel with a sign posted close by “Sic Semper Tyrannis”.

  2. As with everything, it’s local, local, local. But there are a few solutions short of the “ditch the landlords” plan.

    A. Money talks. Note that absentee landowners do not vote locally, and municipalities love money. A notable (3X? 5X? 8X?) tax hike on short-term rentals would force a recalculation of the economics. Also, in some states, if short-term rentals are a regular source of complaints to the police the municipalities can designate those properties as ‘high crime’, and surcharge the landowner for every complaint.

    B. Regulate them. So there’s a short-term rental – does it have an active fire suppression system? When was it last tested? Does it have functional egress? Is it ADA compliant? Does the property contain asbestos? Does the landlord know? (If not, require disclosure “not ADA compliant, asbestos contamination level unknown”). Lot of other irritating things that could be required. This will likely require the action of the local Board. So cronies on the local Board got them approved. So what? Replace the corrupt. Again, absentee landowners don’t vote locally, and campaign contributions can’t buy enough votes if people are pissed.

    C. Ban short-term rentals. Requires the replacement of certain elements of the local government, but worth it. However, some folks will balk at the encroachment on economic freedoms and so one of the above approaches may be more palatable.

    D. Interfere. This is the most legally-suspect (tortious interference), but would be long-term effective. If the landlords are using a site for listings (AirBnB, for example) being a really bad neighbor will lead to negative feedback from tenants and eventually force a reduction in rates (and thus a re-calculation of the economics of the activity). Things like what irritates you – loud noises at 2AM, bright lights, vehicles blocking access – and if necessary, escalate to property crimes (caltrops in the driveway, etc.). This is the least advisable, but would be effective in the short-term.

  3. Yup, welcome to the Texas Hill Country. You can be driving a lonely country road, 2-lane blacktop, and wondering why all the heavy traffic. Then out in the middle of a bunch of scraggle farm land there’s a subdivision of half-million dollar homes with nice manicured lawns and big 4000+ sq ft houses. In an area with no public water supply, no sewer, etc. The roads are built with the occasional farm truck or tractor in mind, not suburban 9-5 traffic of people hauling ass for a 2 hr commute to Austin or similar. Property prices have skyrocketed and still going up. Quiet little known vacation spots are now crowded and expensive and heavily booked.

    I don’t know about fixing that, but I’m wondering how legal it would be for HOA’s in established neighborhoods to vote and add a clause to prevent vacation rentals in an otherwise family living area? The idea that my neighbors can move out and then airBnB (or whatever) their house right next to mine is not a good thought. This will still leave open the long term rentals, but not the higher value short term vacation market.

    I hate the idea of restricting what people can do with their own private property, but when it negatively impacts others? Oh, and I’m all for building a wall. Around California. Keep them bastards from moving to Texas.

    1. My neighborhood HOA (established in the early 1990s) has covenants prohibiting any lease shorter than 6 months. That enables homeowners to rent out their property, but prohibits nightly/weekly rentals. Having been established 30 years before AirBnB was even a thing, it’s obviously not a new problem.

  4. Housing shortages always go back to zoning and permitting regulations. The established home owners limit building, requires minimum sizes and place other burdens. Appartements and even trailers can be put up quickly, but when they throttled it helps the current owners so that is what governments do.

  5. I have been in subdivision, property development, building, owning, leasing and maintenance my entire life from the day my parents bought a rental property when I was 12 and put me to work. I’m 69 and I’m still in the business.

    Yesterday I got a building permit to build a triple garage with a suite on top. Before that I had to get a development permit because the lot already had a garage on on it and the horror of 2 garages on a 10,000 square foot lot was too horrible for municipal micromangers to allow without a permit.

    Start to finish, DP application, denial, successful appeal, environmental study, energy use study, sworn declaration that I would not cut down any trees, (there were no trees – I had to sign the silly declaration anyway) structural engineering, BP took 4 years and cost roughly $10,000.00.

    For a garage.

    All housing shortages are caused by government restrictions. Every. Single. Fucking. One.

    So, yes, there is a very good free market solution, it’s called “the free market”, and it’s something that no longer exists for real estate development in much of the world.

    A simple google maps search, including street view of roads just outside St. Ives, will show you hundreds of thousands of land capable of development for housing, but legally tied to being moose pasture. This (https://tinyurl.com/379vp22y) is about 1,000 yards from the St. Ives beach.

  6. I own Ocean Front Summer rental property. Seasonal help for cleaning and weekly turnover service is hard to find and expensive. ( One day a week for 16 weeks and everybody wants the same turnover day ) We pay what ever it takes and It drives up the rental rates. All the apparent developable land on the Island and off is Federal or State Park Land set aside for “Conservation” — Which is why the Tourist all flock here for the summer.

    We keep raising the rates … and we still sell 90% of available weeks each year. I don’t see the problem.

  7. With renters, if they fall behind in their rent it can be nearly impossible to get them evicted while with a short term rental I imagine it to be a lot easier. I have seen squatters living rent free while doing tens of thousands of dollars of damage, with the landlord helplessly watching.

    1. it’s even worse since the housing courts were closed for at least a year due to the over reaction to the Chinese COVID virus.

      Government is very good at making bad situations far worse. It’s better for everyone involved to have the free market solve our problems because if they don’t work, we can readily fix them without waiting months or years for remedial legislation.


  8. I think the issue could be fixed if the government didn’t subsidize the growth of the country’s population. We literally forced to pay for the dregs of society to reproduce beyond their ability to provide adequate care. On top of that we have to pay for the subsistence of their progeny. Let’s not forget the hordes we import from other third world shit holes that get the same tax payer funded subsistence. This coupled with current regulation of housing and building is the perfect way to make a quick buck if you’ve got the assets already.

    Let’s not mention the sheer amount of foreign investment eating up real estate. No telling how much of that is funded by the billions our Congress critters are fond of dolling out to every Tom, Dick, and Harry.

    The free market could fix it if it were actually free. Who wants a free market though when you can rig the game in your favor? The real estate problem, rot in corporate manufacturing/service industry, inflation/COL outpacing wages , and the rot in our “justice” system are significant issues contributing to our decline. Unfortunately a large number of people in our country are quite happy to sell the younger generation into serfdom. Either through greed or apathy. It’s easier to screech that they’re all lazy, entitled, and deserve everything that happens to them instead of attempting to fix things. Then we wonder why they vote for socialism.

    1. re — subsidize
      We operate a small organic teaching farm near the outskirts of Eugene, Oregon.
      The acreage surrounding us is absentee owned.
      Many dozens of goofballs move in, craft their hovels of warehouse-pallets covered in blue plastic tarps.
      Nobody works.
      I asked one gal about income.
      She says ‘people deal to other people’.
      At some point along the line of consumables, does somebody need to pay cash…
      … unless somebody (up the line) furnishes free consumables as a way to control the goofballs?
      As a way to artificially lower property values until, at some point, the time is right to develop the properties.
      At that point, all those subsidized junkies will come unglued.
      Can you imagine the carnage of — just in the Eugene area — thousands of whack-jobs simultaneously realizing there is no more food, no more free showers and free new clothes, no more dope.
      An aside:
      Every business has ‘Help Wanted’ signs, while goofballs on each corner beg for cash hand-outs.
      During a cold-spell last winter, I hollered into a tarp draped around a tree, asking some goofballs if they had money for propane and a propane heater.
      “No, we are waiting for unemployment to kick-in…”.
      Laying in freezing mud, laying on layers of used hypodermic needles, living on bags of Cheetos (cheesy corn puffs) from the QuickieMart, the buzz drives their every decision.
      Me, my friends and family, my neighbors, business owners, we are in a quandary.
      We ask for guidance:
      * What are your plans on dealing with all the corpses?
      I ask because, just on our dead-end street, the city deals with at least one fatality per week.
      What happens after the bureaucrats ‘go missing’ as a result of vendettas for slights, real and imagined.
      We have no access to heavy equipment for mass graves.
      Our hogs can only consume so much.
      Feral mobs of dogs?
      Suggestions, please.

  9. Let me just say that St. Ives is an absolutely stunning setting….
    though I would have serious reservations about being on that peninsula in a hard blow.

    I await the day when they say of Jackson Hole: Nobody goes there any more, it’s too crowded!

  10. They should’ve bought while they had the chance.

    Not a fan of government dictating what people are permitted to do with their own property.

  11. I own a 14-unit apartment building in a not very glamorous section of North Kansas City, Missouri. I purchased it with my brother in 1989 (Under $300K) as a source of retirement income. Average rent then was $385/month (all one bedroom), had no leases longer than six months and annual turnover was 50%.
    Today the average rent is $1280, the shortest rental term is 2 years and most opt for 3. Half the renters have been there more than 25 years and I may have an opening every other year. I don’t even do waiting lists. The area is being gentrified as old factories are torn down and any building south of the rendering plant is up 40-60% in the past 3 years.
    I probably get 3 offers a week to buy it for 10x what I paid for, but I know whoever (Blackrock) buys it, will just tear it down and put up the max size condo that will fit on the 2.8 acre lot.

    On the flip side, I just sold my Arizona winter home last March and took a beating on it. Too close to the border (12 miles), and too many two-legged strays wandering on the property for me to watch it from 2300 miles away.

    Me and the Fetching Dr./Mrs. Topcat are flying down to Fort Myers next month to start work on her ancient condo in preparation for sale. Bought in the slump of the 90’s for $38K, probably going to sell for $345K+.

    I would love to live anywhere but where I am right now (Northern VA), but she’s 14 years younger than I am and has a practice here, so it looks like they’ll have to take me out of this house feet first. We spend a month in the summer in Wales with her sister and BIL, then take two, 10-day trips to better weather when it suits us. That’ll have to do.

  12. My town, next to San Jose, is forcing the commercial businesses to close, so they can mandate high density housing to replace them. (earthquake rules limits them to 5-6 stories) More tax money to the city is what is driving this.
    I expect them to continue on into the single family residence areas when they run out of commercial property to steal. The town has been overrun by Asians, including the politicians, so that sort of housing density doesn’t bother them. Going to be fun times when a 9+R earthquake hits, as neither this town, or any other bay area town, will be able to handle the problems of too many people that expect the government to provide assistance during a disaster. Very limited access to the area due to few roads that connect to the outside, and the expected road and bridge damage.

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