Variable Cost Living Sadly Doesn't Work(drop.io)
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Variable Cost Living Sadly Doesn't Work
http://drop.io/swl/asset/variable-cost-living-sadly-doesn-t-work
43 comments
We got the following message from an Airbnb user two days ago:
"I absolutely love your service and am actually considering using it as my primary dwelling place (instead of paying rent, telecommuting as a Ruby developer and traveling around the world)... This month I've been using jetBlue's All-you-can-jet pass, and AirBnB, to write a song in 12 different cities..."
Of course it doesn't work.
The time cost of finding a new place every few days must be considerable. You've got no guarantee that demand at certain times wouldn't price you out or that there will be any inventory at all that suits your needs. There are costs associated with moving your stuff and there is an acclimation period while you get settled. I might see this as an experiment to "try" a number of neighborhoods before you settle on a place to live, but it sounds just awful as a long-term method of living (Good choice with the East Village by the way).
Reliability and predictability are two very important considerations when picking a place to live. Throughout time, people have paid a premium for it.
The time cost of finding a new place every few days must be considerable. You've got no guarantee that demand at certain times wouldn't price you out or that there will be any inventory at all that suits your needs. There are costs associated with moving your stuff and there is an acclimation period while you get settled. I might see this as an experiment to "try" a number of neighborhoods before you settle on a place to live, but it sounds just awful as a long-term method of living (Good choice with the East Village by the way).
Reliability and predictability are two very important considerations when picking a place to live. Throughout time, people have paid a premium for it.
I think part of the problem is that he was attempting to find sublets to fulfill his space needs. This is a pain because each period of stay has to be negotiated, which is time consuming... especially when you are moving around a lot.
What you really need to make this work is a provider of living spaces with set prices and set contracts for set durations. Think extended-stay hotels crossed with a fast food joint. You can walk into any McDonalds in the US and know what will be on the menu, and for roughly what price. Likewise, you need a place that you can walk into with various room options and set prices/terms. I guess you could call them franchise apartment complexes.
Well obviously the closest thing to what I'm describing is a hotel. The problem with hotels is that they are too expensive, and (often) don't offer kitchens or offices.
I'm going to pick $1500 for a reasonable Big City rent amount, which works out to $50 a night. Throw in furniture rental and a maid, and it's probably more like $70 a night. So really, if you could rent a studio apartment as if it were a hotel room for $70 a night, you'd be breaking even but gaining all that flexibility.
Of course, in most places rent is much cheaper, so in Kansas City, for instance, the place would need to be more like $30 a night to make sense.
I wonder if it's economically possible to offer various apartment size places on a per-night basis at those prices. Does the hotel industry just rampantly overcharge, or is this an economic pipe dream?
If you did away with daily maid service (only have maids clean between guests), and things like complimentary laundry service, maybe it would be feasible. Thoughts?
Of course, there are other issues, like carting around your wardrobe. Maybe we can have franchise closet/changing rooms too. It'd be like a PO Box for your clothes.
What you really need to make this work is a provider of living spaces with set prices and set contracts for set durations. Think extended-stay hotels crossed with a fast food joint. You can walk into any McDonalds in the US and know what will be on the menu, and for roughly what price. Likewise, you need a place that you can walk into with various room options and set prices/terms. I guess you could call them franchise apartment complexes.
Well obviously the closest thing to what I'm describing is a hotel. The problem with hotels is that they are too expensive, and (often) don't offer kitchens or offices.
I'm going to pick $1500 for a reasonable Big City rent amount, which works out to $50 a night. Throw in furniture rental and a maid, and it's probably more like $70 a night. So really, if you could rent a studio apartment as if it were a hotel room for $70 a night, you'd be breaking even but gaining all that flexibility.
Of course, in most places rent is much cheaper, so in Kansas City, for instance, the place would need to be more like $30 a night to make sense.
I wonder if it's economically possible to offer various apartment size places on a per-night basis at those prices. Does the hotel industry just rampantly overcharge, or is this an economic pipe dream?
If you did away with daily maid service (only have maids clean between guests), and things like complimentary laundry service, maybe it would be feasible. Thoughts?
Of course, there are other issues, like carting around your wardrobe. Maybe we can have franchise closet/changing rooms too. It'd be like a PO Box for your clothes.
That... is ... fascinating! And fascinatingly practical.
I thought that was a very interesting experiment, but I thought of it more of a proof of concept rather than a "I wish this could work for everyone".
The thing that will ultimately make something like this impractical is the emotional attachment to the places that we live. It's likely the same reason that you wouldn't want to live in hotels year round... at least not for your whole life (if you're a contractor you might have some experience with this). People, unlike data, like to decorate, have things set up a certain way, and have a place they call home.
While it's interesting to imagine a world where people only used what they needed when they needed it, we can see some of that today. That's why people will rent a pickup truck for a day while they're moving, or pay to go to a public pool. They don't need to own a pool or a truck year-round, just for a bit of time, which is a little like utilizing server resources.
The part about living in a nice hotel for a day, however, was a good example of something we don't see very often. I guess we really don't have a real-world version of excessive "server load spikes" where you want to live somewhere REALLY nice for a day or two, but analogies can only go so far
The thing that will ultimately make something like this impractical is the emotional attachment to the places that we live. It's likely the same reason that you wouldn't want to live in hotels year round... at least not for your whole life (if you're a contractor you might have some experience with this). People, unlike data, like to decorate, have things set up a certain way, and have a place they call home.
While it's interesting to imagine a world where people only used what they needed when they needed it, we can see some of that today. That's why people will rent a pickup truck for a day while they're moving, or pay to go to a public pool. They don't need to own a pool or a truck year-round, just for a bit of time, which is a little like utilizing server resources.
The part about living in a nice hotel for a day, however, was a good example of something we don't see very often. I guess we really don't have a real-world version of excessive "server load spikes" where you want to live somewhere REALLY nice for a day or two, but analogies can only go so far
It depends on your priorities. Many U.S. families move long distances every few years, and many young single people move significantly more often than that. Certain jobs can require someone to move almost daily. Part of it is because people want to, and part of it is because the culture makes it easy by providing technology that enables it. My guess is that the future will probably trend towards even more flexibility in mobility, not less (especially in the U.S.), although there will always be many people who want to settle down.
Like tsetrich, I also thought it was an interesting experiment. But I agree there is a lot of evidence that most people don't want to live that way. Even in countries in Europe where the rate of homeownership is very low compared to the US, and renting is the dominant social norm even for families earning a good wage, people are still mostly immobile, with a decade in a particular property not at all uncommon.
Still, it would be nice for a while.
Still, it would be nice for a while.
we don't have vacations?
I really like the concept and I'm glad someone managed to try it out. I also immediately thought of Airbnb (good job on ramming your brand into my brain guys!), but there seems to be something missing that even Airbnb doesn't quite cover: standardisation, perhaps?
If you're extending the parallel to cloud storage, sure, you can spin up and spin down as required - but you (generally) stay within the same provider to do so. So you know what your costs are going to be, you know what's available, you trust it to be there when needed, and so on.
When it comes to living, everyone's their own provider. As the OP found out, people have stupid bills; people change their schedules; people can be fundamentally dishonest toward strangers; people aren't a consistent platform. It's peer-to-peer, so it's like - instead of using Amazon to run your website, and spinning up instances, you're relying on Joe Bloggs's spare server space in Watford. What if Joe Bloggs changes his mind?
Would a solution look like a compromise between the standardisation of hotel chains and the flexibility of crowdsourced space? Perhaps. You'd need a trusted third party who could guarantee stuff. Guarantee that the living space is fairly represented and scale costs depending on facilities and features (location being a feature) - just as you pay more for 2 CPUs in the cloud, you pay more for 2 bedrooms on the earth. Guarantee that the overhead costs are totally consistent, broadband, cleaning, etc. Guarantee that if someone changes their mind you still have somewhere to stay the night. And, you know, that's starting to look an awful lot like an aparthotel chain.
I guess the difference is you could have one mega 'cloud' landlord who, instead of building custom aparthotel buildings, leases apartments from private landlords. The cloud-landlord sorts out checkin and checkout cleaning, services, etc; it's kinda a distributed aparthotel. Hell, it's starting to look a lot like the way some universities do accommodation now. Is it a step beyond Airbnb's self-managed approach? Yes. Would it allow variable cost living? Yes. Would it work as a business? Nobody's done it yet, so who knows. I'd guess not, though. Costs and overheads and stuff.
If you're extending the parallel to cloud storage, sure, you can spin up and spin down as required - but you (generally) stay within the same provider to do so. So you know what your costs are going to be, you know what's available, you trust it to be there when needed, and so on.
When it comes to living, everyone's their own provider. As the OP found out, people have stupid bills; people change their schedules; people can be fundamentally dishonest toward strangers; people aren't a consistent platform. It's peer-to-peer, so it's like - instead of using Amazon to run your website, and spinning up instances, you're relying on Joe Bloggs's spare server space in Watford. What if Joe Bloggs changes his mind?
Would a solution look like a compromise between the standardisation of hotel chains and the flexibility of crowdsourced space? Perhaps. You'd need a trusted third party who could guarantee stuff. Guarantee that the living space is fairly represented and scale costs depending on facilities and features (location being a feature) - just as you pay more for 2 CPUs in the cloud, you pay more for 2 bedrooms on the earth. Guarantee that the overhead costs are totally consistent, broadband, cleaning, etc. Guarantee that if someone changes their mind you still have somewhere to stay the night. And, you know, that's starting to look an awful lot like an aparthotel chain.
I guess the difference is you could have one mega 'cloud' landlord who, instead of building custom aparthotel buildings, leases apartments from private landlords. The cloud-landlord sorts out checkin and checkout cleaning, services, etc; it's kinda a distributed aparthotel. Hell, it's starting to look a lot like the way some universities do accommodation now. Is it a step beyond Airbnb's self-managed approach? Yes. Would it allow variable cost living? Yes. Would it work as a business? Nobody's done it yet, so who knows. I'd guess not, though. Costs and overheads and stuff.
There are places like that. It's called "corporate housing". take a look at oakwood.com. They have apartments in lots of cities around the world. A company would contract with them then on short notice could say "I need an apartment in London for a month". The company only deals with the corporate housing place, not the building owners and the buildings aren't dedicated to corporate housing, most are leased in the traditional way.
Lots of companies use these services for when they hire someone new who needs a place to stay until they move, or if they have locations in multiple cities and have an employee on a short term assignment away from home.
Lots of companies use these services for when they hire someone new who needs a place to stay until they move, or if they have locations in multiple cities and have an employee on a short term assignment away from home.
What about something straight out of Snow Crash? Take one of those storage space rental places, and rent out something like that on a daily basis. You might have to do some work on getting things like plumbing,etc in there, but it would be cheap space that could be rented quickly and for variable amounts of time.
Of course, it would be relatively low-quality... but in Snow Crash he wasn't living in a 'high-class' neighborhood.
Of course, it would be relatively low-quality... but in Snow Crash he wasn't living in a 'high-class' neighborhood.
I remember reading somewhere that there are hourly hotels in Japan, because of the extreme hours many "salarymen" work. You pay by the hour, just for the time you're there, for a shoebox barely bigger than the bed.
I thought the hourly hotels in Japan were "love hotels", due to lack of space available for privacy?
In countries like the U.S. with rigid building codes, it could take quite a lot of work to turn a storage locker into something that you could (legally) rent as living space.
There is already variable cost living, its called hotels. They are properly priced for the current market.
I like having a place I call "home." I want more than a roof and a bed to sleep in. I want a place that feels like my base and is emotionally comforting.
Also, the pop-up chat thing is amazingly annoying.
Also, the pop-up chat thing is amazingly annoying.
I was surprised the author didn't mention the (hard to quantify) emotional cost of living out of a suitcase. Bits don't care where they live, people usually do.
Some of us grew up like that, and we like it.
Agree Re the pop-up chat. I disabled JS, so I could read the article in peace. (and then wondered why I couldn't vote when I got back to HN!)
I don't think the metaphor works very well. Cloud hosting is much more like a hotel (or a hostel), since you stay on the same "infrastructure", but you don't have a dedicated physical location. Moving between infrastructure would be a nightmare for computing as well.
Rather, cloud hosting is a commodity.
There is much less qualitative differentiation than there is in accommodation.
There is much less qualitative differentiation than there is in accommodation.
> the fiction around transacting temporary real-estate is just too high
Er, should that be "friction"?
Also, the right-click functionality on that site is infuriating.
Er, should that be "friction"?
Also, the right-click functionality on that site is infuriating.
I don't see how you arrive at the conclusion. So the facilities are not there. That doesn't prove anything. One time, there were only mainframes, and "home computers sadly didn't work".
I'd like to see some innovation by architects, for stuffless living. Since almost all of my personal things fit into a computer in the future, living space could be a lot more generic.
I'd like to see some innovation by architects, for stuffless living. Since almost all of my personal things fit into a computer in the future, living space could be a lot more generic.
"Since almost all of my personal things fit into a computer in the future, living space could be a lot more generic."
To me that's a truly dystopian future. I'd rather my skis, surfboard, bike, kites, hiking boots, etc were not virtual.
To me that's a truly dystopian future. I'd rather my skis, surfboard, bike, kites, hiking boots, etc were not virtual.
Maybe one could invent a small "personal container" with all the stuff, that can easily be transported around. The generic housing could have slots for the personal container.
Why do you have to have skis, surfboard, bike and kites just for you all the time? It's not like you can use them all at once, is it?
Maybe I would understand if you used one item per day, but I don't think even that's the case. Probably most of the stuff you mentioned is simply lying around 90% of the time, taking space and amortizing.
Maybe I would understand if you used one item per day, but I don't think even that's the case. Probably most of the stuff you mentioned is simply lying around 90% of the time, taking space and amortizing.
If you own skis (or any of the other items), you don't just own some skis; you own those skis. They're sized to you, you've used them the last 100 times you went down a mountain, you're accustomed to exactly how they handle, and the left ski boot's padding is a little more spacious because your left foot is a little bigger, and has worn away the padding more.
Yes, you don't use them, but between the custom fitting and the emotional attachment, they aren't fungible anymore. Which is, I suppose, the point of the article: if you declare something to be freely exchangeable, then you can have a much more freewheeling style of life.
Yes, you don't use them, but between the custom fitting and the emotional attachment, they aren't fungible anymore. Which is, I suppose, the point of the article: if you declare something to be freely exchangeable, then you can have a much more freewheeling style of life.
Reminds me a bit of this article:
http://www.wired.com/wired/archive/7.02/chiat_pr.html
(not because of the author's experience, but rather a pitfall I can see occurring)
(not because of the author's experience, but rather a pitfall I can see occurring)
I was without a permanent address during the month of June and looked at doing this, but the overhead seemed way too much. Places were getting taken before I could snatch them up for short term stays, and even then most people wanted months.
If you do need to do this, the YMCA has a number of locations with not-terrible prices. I ended up staying with friends, thankfully.
If you do need to do this, the YMCA has a number of locations with not-terrible prices. I ended up staying with friends, thankfully.
Another reason moving around a lot is always going to be a painful because your address, you being known to be available at a location, is important for legal and financial purposes for lots of service suppliers. Any kind of ongoing transaction will be made difficult by history of moving around a lot.
If you're staying in the same city like he is, all you need is a fixed mailing address. Even moving between cities you can use a mail forwarding service (paying a friend you can trust would probably be better than a commercial service).
You can work around this with a mail-forwarding address, some vendors also scan your mail so you can look at it online and even deposit checks. Lots of RVers seem to be using this.
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eh? What? I don't get the relationship. When would you need more space and less space?
I think this failed because it was so contrived. Here is a more realistic and reproducible example of how my girlfriend is living variably in NYC. She currently has a lease in Brooklyn for about $900 / month but doesn't need to be there all the time. This weekend she will be house-sitting in NJ, next week she is visiting me in SF for a week, and in December she plans to stay with her parents for the holidays.
To continue to have occasional access to her apartment, not screw over her roommates, and make this lifestyle remotely possible, she listed her place on Airbnb.com. She so far has booked about $700 that will go towards October rent. When she needs to be in Brooklyn, she simply marks her dates as unavailable. Her place is still open for December, but has enough interest that she'll be fine.
Using Airbnb absolutely reduces the friction for these short term stays. If a listing is dishonest, we'll drop it like it's hot. If your host bails on you, we'll find you a new place to stay. SO, sam lessin - Despite having a new lease, don't give up on variable cost living! -Chris