There is no shortage of horror stories about the vacation rental platform on social media.

Where else could you find detailed instructions on which glasses you're allowed to drink out of?

Or discover that the bedroom you booked is in the back of a restaurant.

Annoyed at excessive cleaning fees, outrageous house rules and long lists of checkout chores, some travelers are returning to traditional hotels.

Still, the company is more successful than ever.

Boasting billions in revenue and a 70% increase in their stock in 2023.

Clearly, these vacations from hell gone viral aren't enough to put Airbnb into financial trouble.

What happens, though, if the complaints start coming from Airbnb hosts?

Airbnb hosts are making no secret of their dissatisfaction with the short-term rental market.

Take content creator Shelby Church, who bought a home in Palm Springs in 2020 to rent out on Airbnb.

Less than two years into hosting, she posted a video titled Why I'm quitting Airbnb.

The TLDR, California had considered an extra 15% tax on short-term vacation rentals like hers, which could drive prices for Airbnb stays higher than regular hotels.

And Shelby's first year of hosting, she was barely breaking even.

So she worried this legislation could drive down her occupancy rate and turn this property into a big, beautifully renovated money pit.

It's not just California hosts like Shelby who are on alert.

In New York City, legislators passed a bill to eliminate certain types of short-term listings altogether.

A state law has been in place since 2010, banning rentals shorter than 30 days, unless the host lives in the building.

But it was tough to enforce and many hosts ignored it.

Finally, in September 2023, a new local law went into effect that requires hosts to register their properties with the city.

If they don't qualify, they can't be posted on Airbnb.

Overnight, tens of thousands of illegally listed properties disappeared from the site.

Now, cities across the country are considering regulations like California and New York.

And Airbnb hosts are complaining that they just can't sustain the rental business anymore.

But the rise in legislation and Airbnb host frustration may all trace back to the same common problem.

There are just more Airbnbs than we need.

To explain how we got here, we have to go back to, sorry, 2020.

What initially looked like a major challenge for Airbnb turned out to be its biggest source of growth.

At the onset of the COVID-19 pandemic, thousands of people canceled their bookings.

But as soon as travel restrictions started lifting, the demand for short-term rentals reached record levels.

A year's worth of postponed vacations were happening all at once.

And many travelers sought out short-term rentals rather than hotels to socially distance themselves from other potentially germy travelers.

At the same time, the demand for vacation rental spiked, mortgage interest rates hit record lows at the start of 2021.

And hosts like Shelby Church saw a business opportunity.

They bought up second or third homes, not to live in but to rent out, using their Airbnb income to cover their mortgages and hopefully have some profit left leftover.

Some hosts, eager to hop on the rising demand, even rented out apartments meant for long-term tenants and listed those as short-term stays, a model known as Airbnb arbitrage.

In this frenzy, the supply of Airbnb listings across the US increased 23% between 2021 and 2022.

So travelers wanted a lot of Airbnbs and hosts had a lot of them to list.

That's great for Airbnb, who charges a service fee on each stay booked through the platform.

The company is more profitable than ever, but even though demand for short-term rentals grew, the number of units grew faster, meaning all those bookings are spread thinner and occupancy rates have cooled.

So it's hosts who are feeling the financial sting, especially those who obtained mortgages with the promise of steady rental income or signed more leases than they could afford, intending to flip them into profitable weekend stays.

But wherever Airbnb hosts are hurting, their neighbors are facing the financial consequences too.

All those homes that were converted to short-term rentals decreased the available housing stock for the rest of us normies, who just wanna buy a house to live in.

Now, low supply combined with interest rates that have nearly tripled since January 2021, means that many first-time buyers have been squeezed out of the housing market.

Even renting is more expensive.

Remember the New York City legislation meant to limit short-term stays?

Before it went into effect, the Office of the Comptroller, that's the top financial manager for a city, released a report on how Airbnbs had affected rents.

They found that on a citywide average, rents rose by 25% over a six-year period.

But in neighborhoods like Bed-Stuy, which has New York's highest concentration of Airbnb listing, rents rose as high as 47% over the same six years.

The Comptroller estimated that about 9% of the city's rent increase can be traced to a loss of long-term housing supply to short-term rentals.

It's hard to feel too bad for Airbnb hosts suddenly saddled with half a dozen leases in competitive rental markets like New York's, especially amid a housing crisis.

But the oversupply of short-term rental units is hitting hosts, renters, and would-be buyers hard, which is why local governments are starting to step in.

New York's regulation seeks to correct for the surplus in Airbnb supply by requiring hosts to be onsite during the stay, ideally sharing part of the home that they actually live in.

This disincentivizes hosts from buying up excess properties for the sole purpose of Airbnb-ing them

In contrast, California's proposed tax wasn't intended to discourage rental properties.

Instead, the 15% tax on vacation rentals would fund the construction of new affordable housing units.

This would increase the overall supply of housing available to long-term renters to correct for the loss of housing stock to Airbnbs.

But it's too soon to tell which if/either approach will have the most impact.

New York's law has only been in effect for a few months, and California scrapped their vacation rental tax bill altogether.

As for hosts like Shelby Church, at the time of this video's creation her property is still listed on Airbnb for $486 a night.

But she's considering converting this vacation home to a long-term rental.

With all the utility bills and property management fees eating into her revenue, she thinks she may make more money being a regular landlord.

And if you've ever considered jumping into the short-term rental game to make some easy money, consider that Airbnbs can be a risky investment, especially if you can only afford it by being fully booked.

So many variables can make that income stream dry up.

Too many Airbnbs in your area, or maybe your city council decides to regulate vacation properties.

Or maybe people just don't wanna spend the last day of their vacation vacuuming your floors.

And that's our two cents.