Airbnb and Athens’ housing problem

“Airbnb is not an obstacle to solving Athens’ housing problem and it is not the cause of it. The cause is the way the residential development market in Greece works, which is linked to land use. Even if all the Airbnb accommodation closes down tomorrow, the problem of lack of good quality apartments at prices that the typical tenant can afford will remain.” This is according to Pericles F. Konstantinidis, founder and CEO of the Canadian investment firm Syracuse Main, Inc.

Konstantinidis, who has a degree in economics and finance, examines the impact of Airbnb in downtown Athens, arguing that it has contributed to the revitalisation of the area. Despite opposition from hoteliers and voices accusing Airbnb of raising rents, the article argues that the housing problem is due more to land misuse than to short-term rentals. In addition, it points out that Airbnb and private initiatives have contributed to the regeneration of the city’s run-down neighborhoods and he goes on to pose three questions:

“So when apartment rental prices in Athens rise, a serious observer/analyst wonders three things.

• First, why are prices rising in Alimos, Petroupoli and Halandri when 95% of Airbnb accommodation is located within a one kilometre radius of the Acropolis?
• Second, how does the conversion of properties that were previously unoccupied or unused, i.e. outside the housing stock, affect the housing market in Athens?
• And, thirdly, and most importantly, why, since apartment rental prices have risen so much, have investors and developers not stepped in to buy, build or renovate to rent or sell properties at the new, ‘exorbitant’ prices?”

Institutional solution to the housing problem

Konstantinidis even suggests to the Prime Minister to assign the solution of the housing problem to an executive with experience in the field of venture capital real estate because only someone with such expertise could cut “the Gordian knot of the dysfunction of the real estate market in our country”.
He cites the example of Detroit, which decided to demolish at its own expense the city’s abandoned buildings.
And he notes: “Athens needs something like this. Only in its case, what is needed is not the demolition of old structures but renovation. And the key to doing this is institutional and business, not fiscal.” For more details, you can read the full article here.