Author: Chiara Iacovone , PhD candidate in Urban and Regional Development, Politecnico di Torino.
Here’s a brief summary of my intervention at the 2019 Annual Meeting of American Association of Geographers (AAG) — ‘Reading Uneven Structure of Post-Crisis Cities Through Airbnb Platform Urbanization’.
The paper session on ‘Political Economies of Geolocation’ was organized by
Agnieszka Leszczynski from the Department of Geography of Western University and Will Payne from UC Berkeley and discussed by Professor David Wachsmuth from the School of Urban Planning at McGill University.
The paper drives the attention on how Airbnb is mostly used as a business model linking it with recent political and economic changes in Southern European cities.
Short-term rental platforms are strongly present in the current debate over socio-spatial dynamics of contemporary cities as commodifying actors of public and private spaces. In particular, Airbnb is one of the economic paradigms that are mainly present and visible in contemporary cities and it is deeply engaged in real estate markets.
Included in the broaden context of global financialization of housing, Airbnb should be read in a political-economic perspective to better understand the relation with recent economic transformation.
The hypothesis is that the platform hosts mostly business oriented users and in particular, in the context of post-crisis cities it has been increased with the influence of political events of economic restructuring driven by policies of austerity urbanism.
Thus, by questioning the spatial and the economic structure of Airbnb rather than its effects, the purpose of this paper is to identify how geographies of capital structure platform-urbanized cities.
The 8 cities under analysis (Lisbon Porto, Naples, Palermo, Athens, Thessaloniki, Madrid, Seville) are part of the infamous so-called PIGS (Portugal, Italy, Greece, and Spain), that were the four countries most affected by the 2008 financial crisis. These countries were under strong austerity measures and all the cities for different reasons had faced a housing crisis.
In Portugal very low intervention of housing policies in shelter maintenance and renovation through years led Portuguese cities, in particular Lisbon and Porto, to a massive expansion in the suburban areas from upper and middle classes and the almost complete abandon of the city centre where poorest people continue to live in deteriorating conditions safeguarded by social rent scheme.
During the crisis, the Troika Memorandum boosted the deregulations of the rental market, enabled the cancellation of old contracts and facilitated the eviction.
Consequentially there were a massive wave of evictions to free up the city center spaces and make them available to possible investments mostly addressed to the touristic industry.
In Italy the liberalization of rental housing markets was played out during the introduction of Italy in Euro in 2002 and together with the introduction in the market of large real estate investors, rents shortly increased of 130%.
With the burst of the economy a large employment crisis occurred and mortgages were rejected for a large portion of the population. In 2012 46.000 families were foreclosed by banks. So suddenly a lot of apartment were empty and available in the market.
In Greece the huge public debt gained after the Olympic Games in 2004 contributed to the worst burst of the Eurozone crisis in 2009. Indeed what happened in Greece was not a housing market crisis but rather sovereign debt crisis, which also hit the housing market through wage and pension cuts and social benefits reduction. Thus, housing distress rose from the impoverishment, unemployment and indebtedness. A huge percentage of owners cannot afford housing and mortgage costs anymore so, were evicted, forced to sell or to empty the houses avoiding the relative costs.
While in Spain, firsts liberalization started with the annexation in the EU in 1986. In that time new rules were set up concerning the housing and land use field and a strong public policy encouraged families to buy houses instead of renting it. There were tax reductions on homeownership and on selling the social housing to the previous renters, there was an increase of demand in housing market due to the relatively cheap prices and many facilities to get a mortgage from banks. The consequences were that in 2001 Spain had the highest homeownership rate in the Eurozone, 85%.
Due to this revitalization of housing market, prices started growing, until the bubble bursted. Then a wave of unemployment led lots of people to loose their houses or suffer under the ‘Mortgage Law’. Again many houses were empty and available for stronger foreign investors.
Even if, in each of these countries a housing crisis occurred, after the crisis the market was a breeding ground for bigger investors.
What was happening in the meanwhile?
When cities in the South of Europe were under extreme conditions of austerity and their way of living and their economic condition was under threat, a new kind of economic model rose up, apparently unrelated to finance that made the crisis explode and close to the community needs.
The sharing economy popped up from the ongoing information technology revolution with a threefold statement: it presents itself as economic efficient, environmentally respectful, and socially just.
The sharing rhetoric emphasized itself as the most sustainable form to exchange goods and services and it was addressed to whom has been deprived and impoverished from the crisis and it offers the possibility to speculate on personal assets (houses, cars, bikes…).
Airbnb, as one of the main results of this new economic paradigm, founds its advertising on the possibility of increase the personal monthly income using the platform and speculate on personal shelter. From the creation of the platform in 2008 Airbnb spread all over the world and while austerity urbanism was designing crisis-cities deregulating most of the social assets, the platform had a clear path to growth under unregulated economic regime.
As a result, nowadays cities has to face consequences of unregulated development as depopulation of historical centre, gentrification and touristification, just to name few.
So the hypothesis I’m carrying out is that Airbnb act today more as a business model for few rather than an opportunity for all. The statement of Airbnb ‘what’s mine is yours’ rapidly changed in ‘what’s yours is mine’ diktat.
Evidence from extensive data-mining of georeferenced data shown how platform is a carrier of speculation and exploitation within the housing market and, at once, how its internal market is deeply polarized between bigger and smaller actors.
The analysis insisted to highlight the ‘multi-host’ phenomenon. Multi-host are defined as those who own more than 4 listings on Airbnb. Evidence shows that the properties owned by multi-hosts are more than the half of all listings (in 2018) in Lisbon (fig.1), Madrid, Seville and Porto.
Also through years the trend of the new created multi-host properties is a driving force of the total (fig.2).
The statistics wants to unveil phenomena hidden under the sharing economy paradox, and therefore interpreting Airbnb as an indicator of social discomfort and precariousness rather than of innovation. The aim is to trace and visualize specific socio-spatial effects as a consequence of 2008 financial economic crisis through the analysis of Airbnb business model. Indeed, reading Airbnb through a political economy perspective using it as a lens to investigate socio-economic inequalities boosted by financialization of housing market and using its geolocated information to understand new geographies of unevenness could implement platform urbanization discourse.
* Airbnb data are provided by commercial firm AirDNA