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Resolving everything on a case-by-case basis means high transaction costs. A blanket ban on some less-than-popular activity is arguably economically inefficient, but the net cost to individuals is negligible, whereas the cost to someone negatively affected by the unpopular activity is high, and we can all (except perhaps for you) imagine being the one stuck with the problem.

Say this is happening to you: you're trying to sleep but the short-term renters next door are having a loud party, and although you already asked them to stop they ignored you. You lie awake fuming about it, but planning for how you would like to get the property owner fined isn't doing anything to stop the noise right now. Furthermore, even if the property owner is fined, then it's still possible that in 6 months time he'll rent the place out to some jerks who'll do the same thing. So, the property owner may get fined again, but the jerks don't care, because they're jerks - it's oin a stolen credit card, they're leaving the country, they're high on drugs and are incapable of realizing that this will result in bad credit, whatever. Do you want to go through the same process of filing a complain and eventually having the property owner fined every time this happens, or do you just want to get with your neighbors and say 'fuck it, no more short-term rentals in our building/street' at the next HOA or neighborhood meeting?



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