Jan 7, 2024

1B Digital Nomads by 2035. How Are They All Supposed To Find Housing? 

Digital Nomads & Housing
Linus Norman, Co-founder & CEO at heimo

According to the Economist, an estimated 1 billion people could be so-called digital nomads or relocation independents by 2035. 1 billion (!) people. +10% of the entire world population. Yes, that’s pretty d*mn crazy and the trend of relocating more often, exploring new places, being more independent, and what some would call more “free”, is definitely here to stay. But are there enough places to stay for the 1 billion people to move around like that?

The Digital Nomad ‍

“A person who travels freely and earns a living working online in various locations of their choosing, rather than a fixed business location”. That’s the general definition of a digital nomad, highlighting the freedom to travel and the ability to work from anywhere, but one crucial part is missing - where do they live? And how? There’s no one answer to that of course, but a good guess is that a majority of the digital nomads turn to short-term rentals to sort out their accommodation. And that way of living is getting harder by the day.

When one door opens, another door closes

A lot of countries, such as Spain and Portugal, offer so-called Digital Nomad Visas, a visa enabling people from all over the world to reside and work in the country with, according to the governments, a lot of flexibility and potential tax benefits. This is of course a good thing, opening the door to the world for the people of the world, but is it actually consistent with other governmental decisions in these countries? Well, not really.

If we take Portugal as an example, one of the first European countries to offer a digital nomad visa, the Government of the country recently proposed a ban on short-term rentals, they’ve stopped issuing new short-term rental licenses, and there’s already a ban on short-term rentals in residential buildings in place. And we see similar regulations being proposed (or already being in place) all across Spain, and more and more countries seem to follow suit. And a lot of these countries also offer, or will soon offer, digital nomad visas. 

Less supply to match an increased demand

I’m not saying it’s for bad reasons that these countries regulate their housing markets, as a lot of them suffer from a long-term housing crisis where the locals are oftentimes the ones suffering the most. It makes perfect sense to, where needed, regulate the housing markets to enable the local population to sort out their housing needs, but if you ask me, a ban on short-term rentals is probably not the right way forward. Personally, I believe that such a ban will make the illegal short-term rental market blossom, because where there's a high demand, there will always be people willing to offer supply even if it's illegal. So banning short-term rentals and badly limiting the supply, while increasing the demand of short-term rentals by opening the door for digital nomads sounds like a recipe for disaster.

These countries want to welcome the world by offering easier ways for people from all over the world to relocate to their countries, but at the same time they are making it harder for those people to legally find a place to stay. It’s an equation which clearly doesn’t add up. 

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