Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 168

Last week, we spoke about affordable housing in Paris . Today, let's talk about tourist rentals in the city. The city of Paris and Greater Paris (i.e. la Ville de Paris and la Métropole du Grand Paris) recently commissioned Apur (which is a non-profit that I regularly follow) to do two studies on this topic. The first was for Paris proper and the second was for Greater Paris. What they found is super interesting:

• In August 2024, Greater Paris had 149,936 tourist rentals, of which 124,988 were available for immediate booking. This represents an 84% increase compared to August 2023, which is a massive number, but maybe not entirely surprising given that Paris hosted the Olympics last summer.

• Paris proper had 97,975 listings in August 2024 and 90,299 in December 2024. Overall, the city sees fairly muted seasonality. It's also worth noting that 31% of these listings belong to hosts that own multiple properties (that is, at least two).

But let's put these figures into context. Here's a map showing the density of Airbnb listings:

Here's a map showing the number of Airbnb listings compared to the number of principal residences:

And here's a map showing the percentage of unoccupied homes in the city, which totalled 268,500 as of 2021:

The report defines an "unoccupied home" to be any home that is not used as a household's primary residence. So in addition to flat out empty homes, it includes homes that are used sporadically throughout the year for pleasure and/or for work. And as you can see, there are large sections of the center of the city where "unoccupied" and second homes make up over 28% of the total housing stock.

These areas also closely mirror the areas where tourist rentals are most popular, and where Airbnb listings make up over 20% of the housing stock. (See the second chart above.) And as far as I can tell, these are mutually exclusive classifications, meaning there are sections of the city where a large percentage of the housing stock (perhaps up to half?) is either a short-term rental or a second home.

This tells you a lot about the housing market in Paris, especially when you compare it to other global cities:

NYC, for example, is shown here as having 8.8 million people, compared to 7.1 million people in Greater Paris. And yet Greater Paris has about 4x the total number of short-term rental listings. The number of available listings (where the property was available for at least one day of the year) also increased by 84% from August 2023 to August 2024 in Greater Paris; whereas it dropped by 16% in NYC, likely because the city basically banned short-term rentals .

The two reports can be found here and here (note they're in French). And they're rich in data if you'd like to learn more about some of the dynamics impacting Paris' housing market.

Cover photo by Kris Atomic on Unsplash

Over the last few years, there's been growing concern around institutional buyers (namely "Wall Street") buying up too many single-family houses and then renting them out.

But as we spoke about last year , the number of homes owned in this way is actually quite small. The vast majority of homes are owner occupied. And the second largest share of owners is what you might call "small landlords." That is, people who own somewhere between 1-9 homes.

So if the specific concern is that people are out there buying houses and then renting them out, the more fruitful target would be these small landlords. But nobody seems too fussed by them, which leads me to believe that this is an instance of symbolic politics theory . In other words, it's the association with the big bad Wall Street that people don't like.

Whatever the reason, here's the data on the largest single-family house buyers in the US last year (2024) via SFR Analytics :

Here are the metro areas where they transacted:

And here's this same data in heat map form:

The largest buyer was Opendoor, which is a so-called iBuyer. We've spoken about this company a lot on this blog. They don't actually want to hold any of the homes they buy. Instead, they buy, renovate, and then resell as quickly as possible.

The second largest was New Western. They are a wholesaler or "double-close buyer." These buyers want to own for an even shorter period of time and sometimes never actually own the home; instead they just assign their contract. What they're trying to do is buy at a discount and then immediately turn around and sell for a profit.

Note: SFR Analytics believes that New Western's count might be meaningfully understated in the above data. The company uses lots of different LLCs and acquisition strategies and so it's hard to aggregate the data. Assigning a contract also doesn't show up in any county records, so it's kind of impossible to track these. It's just like assigning a pre-construction condominium agreement.

Even still, what this data suggests is that single-family rental funds aren't as dominant as some might think. The overall counts for all of the largest buyers also remain relatively small. Last year, over 4 million existing homes (including condominiums and co-ops) were bought and sold in the US. And this was a nearly 30-year low.

Cover photo by Michael Tuszynski on Unsplash

Back when Elon Musk was running Tesla, he was known for saying that LiDAR technology (basically laser beams that measure distances) was not needed to create full self-driving cars. And that's why their cars instead use a bunch of cameras to monitor the outside world.

Now, I'm not an engineer, but this never made much sense to me. Cameras can only see so far and they certainly can't see at night. So wouldn't laser sensing technology that can see 250-500 meters out — including at night — be greatly preferable when it comes to human safety, even if it costs more?

I'm reminded of what I said to my eye doctor before getting laser eye surgery many years ago: "This is not a transaction where I'm looking to be price sensitive. Get me the absolute best." And that's exactly how I feel when it comes to self-driving cars. I don't care if cameras are pretty good most of the time; I would prefer to have the best.

So which is the best? Damned if I know, but here's an interesting and also hilarious video by YouTuber and engineer Mark Rober where he compares the two technologies: cameras (i.e. Tesla) vs. LiDAR. I won't spoil it for all of you, but his last test is the "Wile E. Coyote test" and it's awesome.

At the time of writing this post, the video already has more than 11 million views and it seems to have been incredibly helpful to Luminar's stock price :

But now the internet is filled with speculation that he deliberately used the video to mislead people regarding Tesla's Full Self Driving capabilities and maybe even to pump's Luminar stock. (Full disclosure: I own a few shares, but this post is in no way any sort of investment advice.) I don't know if this is true or not. But I do think that the cars of the future will all come equipped with LiDAR.

Cover photo by Vlad Tchompalov on Unsplash