The House Always Wins: the cost of participation in the real sharing economy and who loses?
This is actually a good news tale, despite first appearances. I’m here to say that participating in the real sharing economy means more of us can win — yes, of course the usual winners of the traditional economy will continue to win, but so will those who boldly share.
Cynics might say that the “sharing economy” just turned out to be yet another buzzy marketing name for ‘more capitalism’. Less sharing and more ‘leveraging other people’s resources for unequally distributed private gain’.
And yeah, you might be rightly cynical. Looking around at AirBnB, Uber, Deliveroo and the rest, I’d definitely agree. Except that I am living in a different share economy — one which we could label ‘the real sharing economy’, and it’s working for me right now exactly as the pioneers of this movement shift intended. Sort of. Not quite but so close.
PS: Apparently there’s a housing crisis and they blame short stay rental accommodation, like the AirBnB ‘share economy’ variety. But also, there were also a million empty homes on Census Night 2022. Homeless people and underutilised homes. What can we possibly do?
Well, here I am — living in almost strangers’ homes with a roof over my head, my bills covered, amenities provided and sometimes even their food, all in exchange for minding their pets while they vacation elsewhere. House sitting, dog sitting, plant sitting…..whatever you call it, it’s the real distribution of underutilised resources at the point of someone else’s need — an economy where those that have an asset they don’t presently need share it with those who don’t right now.
We’re not sharing ownership of the property — that stays firmly with the owner. We’re sharing access to it.
I’m not suggesting for a single second that it’s the solution to homelessness. But, it is a solution to my immediate requirements. It’s a small piece of the puzzle to more efficiently distribute the pie; a plug for the hole in a bucket while we work out how everyone can have a secure bucket each.
The first time I mentioned to a close friend that I was technically homeless — despite my name being legally on the title of a piece of real estate — they balked. But that’s exactly what I am. For a number of reasons, me not living in my own home is a more efficient use of a resource in the market right now. While I reside on the other side of the city living cost-free in an exchange of access for services rendered, this option enables someone else to live in my property short term and pay the associated costs of doing so.
You see, it’s freshly renovated, fully furnished and decorated, replete with toiletries and food stuffs and utensils and entertainment — but it’s in the wrong part of town for my circumstances right now. Besides, my income is both low and fixed so affording the (ever inflating) expense of a home began to hit the hip pocket in ways that hurt. On the other hand, the people who are living in it only need it temporarily. They have access to everything they require at the right time in the right place, unlike me they have the means, and they’re thrilled to be there….and not homeless!
Of course in this love triangle the short term renters are paying to play, but all parties in the three-way get what they want and need in a win-win-win solution to the cards dealt in the game of life.
Plus the rent paid is all declared and above board, so the government gets their tax revenue. Now we have 4 winners.
As a result of provide housing to local workers, a nearby restaurant got access to staff they could hire, so that business also wins. That’s 5 winners.
I’m new to the suburbs my housesits are located, and by shopping in a local economy that lost some of its residents temporarily to a cruise in the pacific, it’s keeping money circulating through its small businesses. Six winners.
The Score in the real sharing economy
Winners: 6 — house sitter, renters, holidaying homeowners, the taxman, employers, small businesses
Losers: 0
The real sharing economy is not one that exploits gig workers who utilise their time, personal resources, labour (and sometimes lose their lives) to deliver revenue to global tech companies in other countries that don’t pay their taxes or follow our laws — that is, it doesn’t create a long list of losers.
No, the real sharing economy is community members giving and getting access to what they’ve got for mutual benefit — that is, creating winners by ensuring everyone gets their small piece of the pie.
What’s the point of fostering a wealthy nation when some people have too many leftovers in the fridge while others starve?
The flip side to this win-win world is that the rest of our economy isn’t set up well to integrate this pie-sharing arrangement.
Few would argue that I am the very definition of low income at approximately 50% below the poverty line. For perfectly valid reasons related to career-changing, COVID, and life’s inevitable complications, I have been on welfare for ages. A one year sensible career transition turned into three years of striving and struggling to get where I’m going.
Turns out being poor costs a lot of money sometimes.
Having someone else live in my property and pay for that access provided financial relief. Sadly, that ease on expenses is considered income for the purposes of eligible welfare payments. In a quirk of the system, that single declaration to the welfare agency saw approximately $100/fortnight of theoretical ‘rental profit’ resulting in $240 of forfeited real income support. Centrelink scores in that round. Ultimately the taxpayer is the winner, but not so much the person who made themself homeless and is now trying to live on $31/day to pay for everything except shelter.
Australia is a generous welfare state, and concession benefits have helped me manage the costs of existing in this country. Except that when I became homeless and updated my record to ‘No Fixed Address’, I lost the low income concession on my electricity bills — even though that bill still has my name on it and I still pay the costs the people living there incur. A jump from $50/month when I lived in my home to $215 when the renters moved in means that I am now subsidising their costs of existing in Australia too. The energy company is the winner here, and the low income welfare recipient is definitely the loser.
I like to keep my footprint small and expenses low, so I usually ride a scooter. But this year I bought a van to support a new business initiative. Tax deductions would ordinarily compensate for that upfront capital investment, but on account of the homeless thing, I also need to use to it to transport my personal belongings from house sit to house sit. The tax department doesn’t like that personal use part, so I’ll lose the depreciating asset benefit. Meanwhile, as a litre of petrol nudges the best part of $2, the only winners here are the fuel companies.
I did have a healthy savings buffer offsetting my mortgage by the equivalent of the interest rate, but those savings have been all but spent on the costs of existing these last few years while I studied. Nevertheless, each month, by automatic default, the bank takes its repayment of principal, plus their nominated interest amount, which thanks to ten of the past 11 Reserve Bank decisions, is currently about 350 additional basis points above what it was when I was the beneficiary. In dollar amounts, the interest portion has doubled and is now more than 50% of the monthly P&I total taken from my account. Bank wins, mortgagees lose.
The Score in the real world economy
Winners: Centrelink, energy retailers, fuel companies, banks
Losers: The low paid, welfare recipients, concession holders, mortgagees
It can work, this real sharing economy thing. We just need to not punish people for using what they’ve got to better their situation by taking away the remaining safety net before they’ve landed with two feet on the ground. It seems counter-intuitive to negate the benefits to individual people of sharing assets to solve problems, while ensuring the big fish in the pond neither lose on a single potential dollar, and also by any means ever-expand their dues owed as asset owners and capital holders.
I encourage people in the community to keep sharing, to more efficiently distribute their underutilised assets, to make a bigger pie from the same amount of ingredients. Just because the house will always win, doesn’t mean we can’t all have our turn feasting at the table.
