FARSANG spoke to Sarah to discuss the housing crisis as well as phenomena such as Airbnb, gentrification, and ‘sustainable tourism’.
FARSANG Journal: Thanks for joining us. To start with, how did you start focusing on urban issues and housing? How did this journey begin?
Sarah Gainsforth: It began from two separate experiences. The first is that I have personally experienced housing issues: I have been living alone in Rome since I was 23, meaning I’ve been renting for twenty years now. However, the tools for understanding the situation and writing about it come from a period of political activism. I lived in a neighbourhood in Rome, San Lorenzo, that has been heavily gentrified (or at least this seems to be the aim, the results are somewhat different, I would say even opposite to gentrification, of impoverishment) and heavily targeted by housing speculation and touristification. It was traditionally a working class neighbourhood, then it became a student neighbourhood due to its proximity to the university, and then it was targeted by Airbnb. It’s actually a very good case study for looking at these processes. I lived there for ten years and I was part of a political group there – in 2001, there was an old theatre ‘Cinema Palazzo’ which was going to be turned into a casino / strip bar, something that all locals opposed. I participated in activism concerning the change that was taking place in the neighbourhood, an area that changed significantly in the last fifteen years. I witnessed this change.
In the early 2000s, I also used to work in a central neighbourhood in Rome (the most touristic in the city), and while there already was some tourism there, there was still a good number of residents and services. All of this changed with Airbnb. I returned to the neighbourhood after ten years and saw how much it had changed – this is when I started working on the issue of short-term rentals. At the time there was no debate about this in Italy, and no data about it either, even though it was so evident this was happening. I then contacted Murray Cox at InsideAirbnb and we published data on Rome. I wanted to address short term rentals in relation to the housing crisis, while all the government was interested in was regulating it from a fiscal point of view. To this day there is no legislation for short-term rentals.
FJ: For those of us who aren’t as well informed on the subject, when did continental European cities start being affected by these massive tourist flows?
SG: The number of international tourists doubled from 2000 onwards. This was due to this new offer of cheap flights on low-cost airlines, and then cheap accommodation from 2008 onwards with Airbnb, which explicitly targeted cities. Before this, you did have websites where people could do a house swap, but it still wasn’t very common in urban areas. This time, Airbnb targeted cities and homes that were actually inhabited by residents (not second homes), and this helped tourism grow at such a fast rate. People tend to think that these phenomena are natural, and this is the point of my book, to show that these things are not ‘natural’. There is always a cause, and it’s always economic. So yes, it is transport and housing that caused this change in the market: unless we regulate these, we are not going to deal with overtourism. Recently, it has been proposed to limit access to cities via tickets, as if the entire city were a museum. But what you actually have to do is limit accommodation – it makes no sense to place no limits on Airbnb, but then limit access to the city!
FJ: For people who might ordinarily use Airbnb and don’t usually consider the effects that has – not out of malice, but simply because they don’t know – how would you explain what Airbnb actually does to a city?
SG: It radically changes the city: it hollows out the city of its residents. This means that it fundamentally destroys the unique character of each city. This unique character is made by its inhabitants and by all the retail spaces and cultural venues that serve these inhabitants. So, once residents leave and the commercial activities begin targeting only tourists and not residents it means that cities start to look more and more alike. You can then find the same thing pretty much anywhere, so then what’s the point if you’re visiting something that is basically fake? Something that is reproduced as a ‘scene’ everywhere you go. It’s becoming less and less desirable to travel nowadays, and it’s becoming more and more difficult to find places that haven’t been radically transformed by tourism. This is an irreversible change. Instead of preventing this change from happening, governments are chasing urban transformation without regulation. I do understand why people use Airbnb and I understand why homeowners use it. But it’s the same reason we use Amazon, it’s because the costs are hidden. We don’t see the huge costs when we use these digital innovation services. On the supply side, they destroy small retailers (Amazon) and urban fabric in general (Airbnb). On the demand side, they are effectively substituting welfare and subsidies. For example, even though wages are getting demonstrably lower and lower, the fact that we can get things cheaply on Amazon hides this reality. When we travel low-cost and rent on Airbnb, we feel like we still have the same opportunities even though we are all earning less and less. But when we use these services, there are hidden social and environmental costs that we don’t see.
Tourism has always existed as a very important part of the economy, in Italy it’s called ‘Petrolio d’Italia’ (Italy’s oil). But when you look at what it does, it actually destroys well-paying, good quality jobs, promoting instead service industry jobs that cater to tourists (restaurants, bars, hotels) and are low-paying and low-quality. In Italy, the number of people employed in this sector has increased in the last 20 years. It is one of the reasons why our wages are so low: Italy is the only country in Europe in which wages have actually decreased. The labour market is suffering from a decrease in manufacturing jobs and an increase in low paid jobs in the tourism sector. On the whole, a reliance on tourism just increases inequality: if you own a home in the city centre (meaning you’re already well-off), when you rent it on Airbnb, you increase this wealth gap with someone who might rent in the suburbs. When evaluating tourism, you need to look exactly where tourists spend their money – this is important. Whose pockets is it actually lining? According to Bank of Italy data, a large part of tourist expenditure is going to Airbnbs: private homeowners, not the city or the community (because there is no fiscal measure to redistribute that gain). It is individual gain, not collective.
FJ: When you talk about governments taking action, can we really be optimistic that the system that has caused this crisis will be the one to fix it? During the pandemic for example, the mayor of Lisbon actually came up with a plan that effectively ensured that Airbnb hosts wouldn’t lose money. The state was now in the palm of private landlords.
SG: The desired shift is now for administrations to limit short-term rentals and move towards medium-length stays, thereby attracting temporary residents such as students, workers, and ‘digital nomads’ (a category that we know very little about, beyond the media narrative). This is what some public administrations are going for. For example, in Florence there is this ridiculous initiative called Be.Long (referring to long-term rentals) that tries to attract these temporary renters – but they don’t pay tax and they don’t vote, so it’s really about attracting a richer workforce instead of funding job opportunities for locals. Our job opportunities would depend on a richer class of temporary residents moving in. The city actually offers incentives and discounts for people who use their platform – but its residents who pay taxes for public services, not tourists! This is just asking to be gentrified, and we can call it ‘transnational gentrification’. This started to happen in Lisbon when it began attracting tech companies and ‘digital nomads’. I think the city thought it could control and govern this process. The problem with this is that foreign tech workers’ salaries are so much higher than local salaries, and then everything starts to cater to these richer, temporary inhabitants. As a result, locals get pushed out and everything – from housing to cost of living – becomes inaccessible to them. So really, a public administration presenting this as an actual policy is incredibly short-sighted. What this also says is: ‘we don’t want cheap low cost tourism anymore’. This actually means: ‘We don’t want poor tourists, we want rich tourists’. When in fact low-cost tourism and daily visitors, such as those travelling on cruise ships, probably account for a bigger percentage of expenditure going to local retail, bars and restaurants. Luxury tourism tends to move in closed circles. I wonder how much of that spending actually ‘trickles-down’ to cities. But again, there’s not much data on this. What’s amazing is that public policies should be based on data, not on vague ideas and assumptions, or on the fascination for unclear concepts such as ‘digital nomadism’. As with tourism, when looking at the data we can get a better picture not only of the benefits but also of the costs for cities.
It’s really about attracting a richer workforce instead of funding job opportunities for locals; our job opportunities would depend on a richer class of temporary residents moving in. The city actually offers incentives and discounts for people who use their platform – but it’s residents who pay taxes for public services, not tourists! This is just asking to be gentrified, and we can call it ‘transnational gentrification’.
FJ: The late Mike Davis also spoke a lot about this struggle between private and public property….. Where does Airbnb fit into this binary?
SG: This is the whole problem. Private property is very important in Italy – it plays a central role in our economic system. Around 80% of Italians are homeowners, so real estate constitutes a really significant portion of wealth in the country. Supplementing your income by renting out your property was already common, but Airbnb brought about a major shift in mentality and culture in substituting income with rent by becoming entrepreneurs on Airbnb. It has become socially acceptable, but in fact it’s not, there is no way this is socially acceptable. Airbnb turns everyone who can participate in the game (so not everyone) into players in this mechanism. It becomes a personal model based on profiting from housing – the basis of my argument is that profiting from housing is totally wrong from the outset. Private renters and landlords have always existed (in Italy the private market is mostly made up of family homes) but there has been a shit towards professionalisation and it has become natural to think that if you own a property you need to make the maximum profit possible from it. This pursuit of profit goes against societal interests and destroys the social fabric of cities – beyond a lack of housing policies and regulation, the sacredness of private property is a cultural cornerstone in Italy, also because Italy has always had a familistic welfare.
FJ: Is housing reform without labour or economic reform a losing battle?
SG: The housing issue has to be tackled on different levels. From the labour market angle, you can see that there are more incentives for real estate than for jobs: income is taxed more heavily than income from real estate. It’s ridiculous because usually, in other parts of the world, the law distinguishes between ‘occasional’ and ‘professional’ activity on Airbnb, but here in Italy, ‘non-professional activity’ is owning and renting out up to four apartments. You can rent out four apartments and be considered non-professional, meaning you can be taxed only at a flat rate of 21%, all while the income tax paid by the lowest earners is 23%! It is incoherent and it is all in the favour of real estate. So action has to be taken from different angles: salaries need to rise, but Italy has a massive low wage problem. It’s very difficult to talk about housing if you don’t consider other aspects such as jobs. From a housing policy perspective, Italy has been selling public land and housing since 1993! This needs to stop. There is no real national policy on housing anymore. There haven’t been any updates to the measures taken in the 1990s – but the labour market has changed so much. Housing authorities were essentially made into companies that had to balance their budgets. This makes no sense because how are you supposed to balance the budget as a public service? There need to be a series of legislative acts that address these issues. Cities could start managing so-called ‘social housing’ (housing associations in the UK), which is non-existent in Italy, also because what we call ‘social housing’ is actually rent-to-buy housing, instead of letting it be managed by private companies. The problem is that we are now experiencing a new housing crisis but we have no tools to deal with it. These tools have been dismantled systematically over the past decades.
FJ: Finally, is ‘sustainable tourism’ a utopia that we cannot adequately conceptualise and implement? Can you describe what it would look like as a model?
SG: It’s very complicated, but I don’t think it is possible to have ‘sustainable tourism’ within this economic system. This is a system based on extracting value from land – you see this in issues ranging from housing, tourism and the environment (land-grabbing, etc.). Tourism is exactly the same: it does not produce anything, it just extracts and consumes cities. It extracts value from cities and local communities, taking that value elsewhere. It privatises all this wealth, profiting from exploiting locations, eventually destroying them. This is capitalism. It’s very hard to imagine ‘sustainable tourism’. Simply think of the ‘digital transition’ and ‘green transition’ that we talk about in Europe: how can we even consider these plans without thinking of the mining that leads to the dispossession of entire communities in certain African countries, for example? All this talk about sustainability is often just greenwashing the economic system. Of course, I think there are better and worse examples of tourism and not everything can be put on the same level, but I have this idea that policy should concentrate on what makes a place inhabitable. I am not against tourism as a practice, I am against tourism as an economic model driven from above. Criticising tourism as an individual practice is not the point – I also love to travel. I believe that if we had policies that really protected inhabitants, housing, wages and labour from the markets, we wouldn’t have to count on tourism as an alternative. This is the point. Maybe people wouldn’t be renting their houses on Airbnb if they had other means of income. We need to shift our attention to our living conditions and then tourism would adapt to this. This is my utopian vision.
