~Basil

https://www.oftwominds.com/blogaug23/towns-destroyed8-23.html

STVR/Airbnb Has Destroyed America's Resort Towns

It turns out society isn't just the sum total of the Fed goosing "maximizing shareholder value." People actually have to live in the corrupt, bifurcated, distorted ghetto the Fed and "maximizing shareholder value" have created.

It's an old story, manifesting now in new ways. The rich, buoyed by inherited wealth and access to credit, find a locale with the qualities they desire, and buy the choicest properties for their own use, and a surrounding band of nearby properties so they won't be bothered by the bottom 99%.

This story has a new far more destructive chapter, generated by the boom in STVRs--short-term vacation rentals. The uber-wealthy don't need more money but they're trained, like hamsters in a lab, to seek ways to maximize their income and capital gains. STVRs--Airbnb et al.--are highly attractive investments to the wealthy and their money-managers--the hedge funds, private equity managers, family-wealth advisors, et al.

Residential real estate that can be converted to STVRs is well within reach of the top 10% households, who own between 80% and 90% of all income-producing assets such as housing rentals, stocks, bonds and business equity.

As the Federal Reserve has distorted credit markets with historically unprecedented low interest rates and "excess liquidity," the resulting asset bubbles widened the income-wealth gap between the top 10% who already owned most of the assets soaring in value and the bottom 90% who at best owned a family home with a mortgage.

The top 10% saw super-low mortgage rates and the plump returns on STVRs and rushed to snap up any properties that could be converted from long-term rentals to short-term vacation rentals to get their share of the post-pandemic price-insensitive "revenge spending" we-need-a-vacation bonanza.

This mass conversion of long-term rentals for workers into vacation rentals has social and economic consequences. It's bifurcated America's desirable towns into luxe enclaves for the "haves" and ghettos for the working "have-nots." It was all fun and games seeking to "maximize shareholder value" and ride the next bubble to ever greater wealth and income, but the consequence is the destruction of the nation's social and economic fabric. ......