Updated: Sep 12, 2018
Earlier this summer I travelled to France and Belgium on a family holiday. My wife and son planned the entire trip months prior, which included a bit of a road trip with multiple stops along the way. We secured our accommodations exclusively through one of AirBnB or VRBO home sharing services.
Not once did we stay in a hotel, and I am happy to report that it was an outstanding experience and a memorable holiday for the whole family. For very reasonable rates (usually at a fraction of the cost of a hotel room), we were able to stay at two or three-bedroom homes everywhere that we went, in a location that we found convenient for our planned activities. Our accommodations ranged from a two-story apartment in the heart of La Marais Paris, to a wind-swept villa on a cliff overlooking the mouth of the Somme River, to an ultra-modern town house in Bruges and to a quaint farm house in the heart of Champagne country.
This has not been our first experience using AirBnB or VRBO, we have used these services extensively previously in Spain, Costa Rica and in the US. We have rarely been disappointed.
However, this is the first time that we noticed the impact that these services are having on the urban landscape. In nearly every neighborhood that we visited, old building stock was being renovated nearby. Where tourists tend to flock, residents are moving out to the country during tourist season and sharing their urban homes. The competitive market compels the owner to upgrade their homes to attract the best reviews, highest rates, and greatest potential occupancy. The homeowners that we spoke to were fully booked for months in a row. At the most extreme, the Bruges homeowner had already booked her house every day until November and December was filling up fast.
Large swaths of towns and villages across Europe are being gentrified to accommodate tourists who can only be reached effectively through home sharing apps. The upside to this trend is obvious for the local tourism industry because home sharing effectively expands capacity. This means that the local restaurants and the tours often teem with visitors, and profits. It also means that the neighborhoods are lively with people engaged with the city, and old housing stock is being modernized. For smaller cities and villages, this creates new employment and business opportunities that were otherwise unavailable.
To prove my hypothesis, I investigated further. It didn’t take long to confirm the trend and uncover the downside experienced by established tourist centres.
Destination cities from Amsterdam to Dubrovnik have been gutted of locals. One friend who recently visited one of those cities complained that “it was like Disney with good beer”. Other than the tour operators and the restaurant servers, it was all tourists. Amsterdam is already taking action. House sharing, as of right now, has become an EU issue with eight cities (including Amsterdam) pressuring Brussels to compel AirBnB and others to share data across jurisdictions in an effort to enforce limits. Some politicians are complaining that the gentrification of wide swaths of downtown housing creates shortages of affordable housing for local residents.
The bottom line is that software is beginning to shape our actual environment in ways that were more than likely unintended at a rate that was unexpected. The speed of change to local landscapes in parts of Europe is, in some ways, faster than during reconstruction after World War II. It would be interesting to see what the long-term impact on the urban landscape will be if left unregulated. Unfortunately, politicians are a little too eager to impose upon and distort the market.
As software-based services continue to mature to global scale, they are more likely than ever to impose meaningful impact on our physical space. In particular, spaces built by humans. Urban spaces. One does not need to look too far to find other examples of software solutions affecting our urban landscapes. Amazon and other online retailers have a major impact on retail space in North America, especially retail malls. In 2017 alone, approximately 8,500 mall and “Big Box” stores closed in the US. Since peaking in 2005 at 1,500 malls, over 400 have already closed and another 500 are expected to close by 2022 when there could be 600 malls or fewer remaining in America. What is that impact? The local mall emerged as the lifeblood of suburban America in the last half of the 20th Century. By shedding almost a half million local jobs and removing the centerpiece of local communities, the “dead mall” hollows out American Suburbia and erodes its wealth. People are flocking back to urban landscapes with once abandoned city cores returning to life.
Increasingly infused with AI, software is becoming more powerful at scale than ever before. The impact of Amazon on the American landscape emerged fairly predictably over two decades. Only one product cycle later, the impact of AirBnB on the European landscape occurred with astonishing speed. What is next? Obviously self-driving vehicles could have major impacts on transportation infrastructure – but it is a bit of a slow-roll. What happens as bike and scooter-sharing software emerges? Are there hyperlocal but international social networks that could affect how local sports, entertainment, and activism are organized? Will eSports venues revive “dead malls”? Could social campaigns like “no straws” and “buy local” become impactful enough to affect urban space? These may seem like interesting questions, but I think that the more exciting question is: How will we respond to the inevitable future impact of software on our shared physical spaces? Will we let it self-organize? Or, will we impose restrictions? What are the implications of these decisions on our urban environments?
As we observed this summer, Europe teems with AirBnB rentals. Although London and Paris lead all cities in total active rentals, the highest density of rentals tends to occur in European wine country. In general, European complaints about house sharing may be founded. Urban household counts were spotty data, so we used a common headcount per dwelling across all cities of 3.1 to estimate total household in a city. The bottom line is that in Bordeaux, one in 8 homes are rented out for AirBnB. The highest density city in the US is Austin TX, while Vancouver is the densest AirBnB city in North America within the sample. A few cities, in particular Moscow, Istanbul and Sydney did not have reliable municipal data to source from. We chose to use municipal data (city proper) because a vast majority of AirBnB rentals occur in the proper cities, not in the suburbs.