A weekend topic starting with the Globe and Mail. "Breather Products Inc., the Montreal startup that raised more than US$150-million to build a global flexible workspace operator, is abandoning hundreds of leases in an effort to reboot the pandemic-stricken company. 'The decision I’ve made is that Breather in its current form as an operator doesn’t make sense and, to be frank, I’m not sure it ever made sense,' said Chief executive officer Bryan Murphy. 'I want to be like Airbnb.'"

From WGNO in Louisiana. "A New Orleans Airbnb owner says never again after a guest caused thousands of dollars in damages and theft. The homeowner, Corey Ball says her guests used a stolen identity to rent her home and then stole her and her husband’s identities in the process. Ball was excited about the month long rental income, but things quickly changed when her guests checked out."

"'When we got to our home, we realized they completely turned it upside down, they had stolen a bunch of items, they kicked open our closet door to access the attic,' Ball said. Once upstairs, the guests found boxes of personal information. Ball said, 'Pretty soon we were getting credit card applications and thank you for signing up for accounts in our name.'"

"As Ball and her husband were taking inventory of their home, they noticed her grandmother’s ring was stolen from the locked attic, items were stolen off furniture and their antique wood floors were scratched up. They also found used syringes and blood splattered on the walls. The guests were verified by Airbnb before the stay."

From CBS 5 in Arizona. "A house party in north Phoenix turned deadly. Police said a teen was killed and another person was injured following a shooting at the home off 28th Street and Greenway Drive. Now, neighbors in the area are voicing concerns about the short-term rental home they say has caused major issues for a year. 'All of my fears of someone being shot, of us potentially being hurt, it is realized. It is real,' said one neighbor who didn't want to be identified for her protection."

"In 2016, Arizona lawmakers passed legislation preventing cities and counties from banning short term rentals. Some people who live near the home where the shooting took place are pushing for the bill to be repealed. 'This is our starter home. I was born and raised here in Phoenix, this was supposed to be our dream of starting a family and now it is a nightmare and it is not going to stop,' said one neighbor."

The Fountain Hills Times in Arizona. "Fountain Hills Mayor Ginny Dickey has signed on with 32 other Arizona mayors in a letter to Airbnb corporate executives describing issues the communities have with short-term rentals and asking for company help to address concerns. The letter goes on to cite specific examples of difficulties and hardships municipalities are having with short-term rentals, which include: *Once peaceful neighborhoods suffer from unsupervised groups coming in and out for daily stays, which include unruly, disruptive and noisy large gatherings."

"*Neighborhoods are experiencing dangerous criminal activity from short-term rental properties, including shootings, sexual and physical assaults, and the use of short-term rental properties as locations and staging places for other criminal activity (over the summer, looting and rioting). *Affordable housing stocks are being gobbled up by investors who are focused on short-term commercial uses of their properties, rather than neighborhood stability and prosperity."

"*Some communities have seen over half of citizen police calls relate to problems with short-term rentals. This is a direct result of our local communities’ inability to enact and enforce responsible regulations."

The Real Deal on California. "A slew of apartment landlords are suing the City of Santa Monica, claiming a law that bans short-term rentals is 'arbitrary, capricious, and lacking in evidentiary support.' The property owners behind 32 limited liability companies filed the lawsuit, which seeks to toss a measure the Santa Monica City Council passed in September. Those firms include Scott Walter’s WS Communities — which is building 850 rental units in the city — and Neil Shekhter’s NMS Properties."

"Filed in Los Angeles County Superior Court, the lawsuit paints a picture of once-powerful property owners who now feel blindsided by local government, and are trying different ways to fight back. The measure also goes against the property rights of landlords, the lawsuit argues. Because of the pandemic, landlords say they are still collecting far less in rent from tenants in downtown Santa Monica, some up to 25 percent less."

From US News and World Reports. "Are U.S. stocks and real estate prices overinflated? Is this just one big asset bubble? On Wall Street, special purpose acquisition companies, or SPACs, became the vehicle du jour. Scores of these 'blank-check companies,' which are merely sloshing gobs of money for SPAC creators to take private companies public through acquisition, went public in 2020."

"Elsewhere in the initial public offering market, DoorDash and Airbnb went public and quickly reached a combined valuation of nearly $150 billion. Trailing revenue for the two companies was just $5.8 billion, and neither was profitable. 'I don't think there's any question that certain large segments of the stock market are in bubble territory. What you have is a situation where several years' worth of anticipated growth and future sales and earnings have been pulled forward in today's valuations,' says Matt Argersinger, lead investor at Millionacres, a Motley Fool service."

"Argersinger specifically cites what he calls 'technology platform' companies like Airbnb, Okta, Roku and even Netflix as having potentially runaway valuations, with other industries like e-commerce and electric vehicles also looking frothy. 'While different in some important respects, today's stock market really does harken back to the 1990s dot-com bubble,' Argersinger says."

"David Kass, clinical professor of finance at the University of Maryland's Robert H. Smith School of Business, disagrees. What follows from low rates, and especially low rates that investors know will stay in the gutters for years, is a natural flow of money into riskier assets. 'Since rates of return on fixed-income investments are at historically low levels, investors have focused on other asset classes such as equities, real estate and cryptocurrencies in order to earn a non-zero rate of return,' Kass says."

"It's not just a benign preference for these higher-risk assets that low interest rates engender. Low interest rates effectively force certain kinds of investors, especially large institutions, into riskier assets, says William Goetzmann, professor of finance and management studies and director at the International Center for Finance at Yale School of Management. Charitable foundations, for example, 'have a mandated 5% payout,' Goetzmann says. 'For them to avoid declining in real terms, they really have to invest a lot more into these risky assets.'"

"As for real estate, few see apt analogies to the 2008 financial crisis, which was driven by a combination of wild speculation, high leverage and shady underwriting standards. Eventually, interest rates, which had been rising for years, combined with those forces to start triggering defaults, setting off its own chain reaction in the world of obscure financial instruments."

"Today's real estate market is much different. 'Housing starts have badly lagged household formation since the Great Recession. And while 2020 was initially looking like it was going to be a strong year for housing starts, COVID-19 put a major dent in construction activity,' Argersinger says. 'With inventories of 'for sale' existing homes so low in many markets, there's a real demand-supply imbalance that favors higher home prices, irrespective of today's historically low interest rates.'"

"'Is a run-up logically followed by a decline? The good news is that a big jump up in price is not regularly followed by a decline in price,' says Goetzmann, who has studied how markets across the world perform after doubling in price. 'I would avoid looking for a red flag' to indicate the top of the market, Goetzmann says. He argues that the market is well aware of past bubbles and that this knowledge is already incorporated into prices."

"There are certainly pockets of irrationality in markets, evidenced by the flurry of SPACs and euphorically priced IPOs in 2020. But assets at large have plenty of justification for their current levels – even if much of that justification comes from the central bank and elevated fiscal spending instead of more organic growth. 'We can use the word 'bubble' for this,' says Peter Davies, CEO of Jigsaw Trading, 'as long as we don't then assume it has to 'pop' soon.'"