David R. Henderson  

Crash Pad

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On a United flight from San Fran to Washington Dulles yesterday, I found the flight attendants particularly professional and courteous. When I went to the back to stretch my legs, I did what I often do: asked a flight attendant where she was based. This particular one answered that she's based in San Fran but lives in Miami. So she arranges her schedule so that she is in San Fran for 3 weeks and Miami, with her boyfriend, for 5 weeks. I asked her how that works: where does she stay in San Fran?

Her two word answer: crash pad. I didn't know what that was. She explained that 18 flight attendants share a 3-bedroom apartment near SFO. She said it's illegal, but I don't know whether that means that the local government has a regulation forbidding it or it means that it violates the rental contract. I asked her what the maximum number of people sleeping overnight it is at any one time. The most she's seen is 7: two in each bedroom and one on the couch. Her share of the rent: $420.

I love hearing about the various ways people with unusual schedules adjust to high housing costs in the Bay Area.

On a later stretching-my-legs trip to the back, I asked another flight attendant what she did. She led by saying that she doesn't have a "crash pad." Her familiarity with the term made me think that it must be a common living arrangement. She lives in Fresno and drives to San Fran.

I've categorized this under "Revealed Preference," but it's really about people doing the best they can, given their knowledge, within constraints, in ways that no central planner would be able to figure. So I've also added "Central Planning vs. Local Knowledge."


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COMMENTS (17 to date)
Thaomas writes:

Apparently another example of a kind of regulation (no more than n people can rent accommodations of characteristics Y) with more costs than benefits. I'd think that knowledge that such regulations can occur, even in otherwise well-governed places like California, ought to be common enough now that we could turn attention from proof of existence to trying to figure out how to bring costs in to actually trying figure out how to bring costs into line with benefits. In some cases it might even be no regulation at all, but how can we know without detailed empirical work?

Dylan writes:

I think that's been common for a long time. I had a long conversation on a red eye flight about a decade ago talking to one flight attendant who had a crash pad she shared with 7 other attendants in Howard Beach, and her home was in SLC. Going back even farther than that, a high school friend became a FA shortly after graduation and had a setup like that in SF. I do remember they ended up getting in trouble for breaking the terms of the lease, and were asked to pay a pretty sizable sum, but don't recall (or probably ever knew) the other details.

Toby writes:

I can't say that I approve, in particular if it's the terms of the lease that they're violating.

In my contract there are rules pertaining to how many people can live there at a time and in which cases I am allowed to sublet the apartment (In general I am not allowed to do that).

I like these rules. Provided that other tenants have the same or similar rules in their contract. It helps to make the neighborhood live-able. I even think that individuals are willing to pay higher rents if they know that their neighbors have these terms in their contract.

Now if it is a regulation that they're violating, then it might be that the regulation results in an inefficient outcome. However, the people who live around probably take this regulation into account when making their decisions.

E.g. I live in a residential area by choice. If one my neighbors would suddenly decide to open a business in his or her apartment, then his or her customer's use of our shared space would be rival to my own use. Similarly, their use of the public facilities outside would be rival to my use. The violation of the regulation would be to my detriment and contrary to my expectations when moving in.

The story would of course be different if I knew of the lax enforcement of any rules beforehand.

Aaron Wiegel writes:

Speaking of local knowledge, no one calls San Francisco "San Fran" (the term makes me shudder.) It's SF or "the city".

bill writes:

"the city" is NYC. :-)

gamma writes:

bill: not in the SF Bay Area. :-)

Thaomas writes:

Even if in the particular case it is a lease that is being violated, I think Dave's point is that the non-existence of legal accommodations of the "crash pad" sort probably results from some kind of regulation or zoning. He might be wrong about that, but that is exactly my point about the triviality of just "noticing" an apparent inefficiency without looking into the market or policy failure that produces it.

Toby writes:

@Thaomas,

I don't think that I completely understand what you are saying here. But the non-existence of legal accommodations such as the "crash pad" might also be efficient.

Thaomas writes:

@ Toby,

Anything is possible, but I think that the odds of n people not being able to rent an accommodation that they can share "crash pad" style in SF is unlikely to be an unregulated market outcome and that I think is Dave's point.

Where I differ is that whereas Dave seems to think that the unregulated outcome is always be optimal, I rather imagine that the non existence of legal "crash pads" is the result of some sort of regulatory or zoning restriction having a reasonable purpose but in the "crash pad" case having more disadvantages than advantages.

Therefore there may be a better set of regulations that satisfy the reasonable intent of the regulations but without the disadvantages. Costing out the advantages/disadvantages of the existing regulations compared to an alternative set (including the null set), could be helpful. Pointing out that the housing market in SF is not optimal is not very original and the implied conclusion that it should be completely unregulated is unproven and probably wrong.

Toby writes:

@Thaomas,

Why do you think that it is unlikely? I can see the appeal of having such restrictions as a tenant and a landlord provided that others also impose such restrictions.

Part of what I pay for when I pay my rent is being near certain kind of people and away from certain kind of other people. Restrictions such as these on my neighbors raise what I am willing to pay. I wouldn't want to live next to a crash pad.

Take a look at some of the problems that Airbnb is causing in nice neighborhoods of cities that are popular tourist destinations. People don't want to live next to something that is akin to a crash pad.

Based on what I know of my own preferences and what I observe that other people's preferences are, I come to the conclusion that it's quite likely that the unregulated market would also make such crash pad's "illegal". That is of course if transaction costs are low enough.

This is also by the way why I don't think regulations that prohibit crash pad's are inefficient. If these kind of preferences are widely shared then these will be reflected in city regulations. (Of course not all preferences that are widely shared necessarily result in efficient regulations).

john hare writes:

One take away I get from some of the comment above is, "I've got mine, so clear out". Without the crash pad, it is unlikely that the stewardesses could afford to keep their jobs if they were required to rent a part time apartment for a full time rent.

This would either prevent them from working that job, or take so much of their income as to make it an unfavorable gig. So either there is less money coming to town by the employed stewardesses, or they make the housing shortage even more acute.

It looks like three options.
1. Crash pad.
2. No affordable living quarters driving business out of town.
3. Increased pressure on an already short supply of housing driving rents and home prices up even more.

Ally writes:
"She lives in Fresno and drives to San Fran."

As a non-American, my geography of specific US cities and driving routes is pretty much non-existent.

Google tells me that Fresno to San Francisco is almost a 3 hour drive. That seems like a really long commute.

David R. Henderson writes:

@Ally,
Google tells me that Fresno to San Francisco is almost a 3 hour drive. That seems like a really long commute.
Yes. Remember, though, that flight attendants typically fly for days in a row and so they aren’t having to do that commute every day. I would guess that she does it 3 or 4 times a month.

DR Jensen writes:

Similar arrangements among flight crews have been common for decades.

Back in the late-80s and early 90s my dad shared an apartment with a number of fellow pilots who were also based in but did not live in New York City. He said it was a lot better than trying to find a hotel room every time he needed to spend the night between flights.

B.Walker writes:

My take away is that people will do what's necessary to survive. "Crash pad" is practiced among the "homeless" it's sometimes called couch jumping.

The difference here is that the arrangements seem to be more permanent and the tenant pays some of the freight.

I was under the impression that flight crews were housed in hotels; I've seen them come and go at check in desk.

David R. Henderson writes:

@B.Walker,
I was under the impression that flight crews were housed in hotels; I've seen them come and go at check in desk.
That’s when they’re in the middle of their flight schedule. So the San Fran crew flew to Dulles. They stay overnight at a hotel near the airport that United pays for. But United doesn’t pay their housing expenses when they’re not in the middle of their flight schedule. It’s no different from my employer paying for my hotel when I’m on an employer-sponsored trip; the employer doesn’t pay my mortgage.

Judith Gustafson writes:

Flight attendant shares with 18 other flight attendants. Her share of rent is $420. Perhaps the rent share of each is unequal, based on number of nights used (????) but if equal shares, monthly total comes to $7560. Hmmmm.

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