If you help create a problem, then spend $250 million trying to solve it, are you part of the problem or part of the solution?
That’s the crossroads Airbnb finds itself visiting.
This week, Airbnb announced a $250 million Housing Accelerator designed to provide the final financing needed to get stalled housing projects under construction. The company believes its investment could unlock more than $5 billion in new housing over the next decade. Its first investment, $6.4 million, will help finance 201 affordable housing units in Austin.
Wonderful. Well, that sounds pretty angelic.
As you know, for years, cities across America, like yours, have been blaming Airbnb and other short-term rentals for making housing less affordable.
So, did they? The devil is in the details.
Inflated air
According to the Congressional Research Service, there were approximately 2.4 million short-term rental properties in the United States in 2023, representing about 1.6 percent of the country’s 147 million housing units at the time. About 1.5 million were actively available at any given time.
We can’t really blame STRs for America’s housing crisis at 1.6 percent.
But housing is local, and STRs aren’t spread evenly across those 147 million homes. They tend to concentrate in vacation destinations, downtowns and desirable neighborhoods.
A nationwide study published in Marketing Science found that as Airbnb listings grew, rents and home prices grew with them. At the typical rate Airbnb was expanding during the study, researchers estimated it added about $9 per month to rent and $1,800 to home prices in the median ZIP code, accounting for roughly one-fifth of rent growth and one-seventh of home-price growth.
Researchers also found evidence of why: Homes were moving from the long-term rental market into the short-term rental market. Airbnb didn’t create America’s affordability crisis. But the data says that in places where STRs become concentrated, they can make it worse.
Then there is the other side of the equation.
STR income can help homeowners afford their homes, support local tourism and create an economic incentive to build housing. Another Marketing Science study found that after communities imposed STR regulations, Airbnb listings fell 9 percent, but residential building permits also fell 11 percent.
Oh no … housing is complicated. There is no silver bullet.
A 19-year-old, stay-at-home problem
Airbnb was founded in 2007 because its founders needed help paying their San Francisco rent. Nineteen years later, the company they created has fundamentally changed how millions of properties are used.
Yet America still has no national framework for short-term rentals.
Instead, thousands of cities and counties are figuring it out independently. Some require permits. Some cap STRs. Some require the owner to live in the property. Others effectively prohibit them.
Local control makes sense. Manhattan, New York, probably shouldn’t have the same STR policy as Manhattan, Kansas. (And yes, before you ask, they do call it the Little Apple.)
But after 19 years, shouldn’t the real estate industry have some agreement about what good STR policy looks like?
The National Association of Realtors acknowledges the conflict between housing affordability, local land-use authority and an owner’s property rights. Its own STR advocacy guidance emphasizes that the right to rent is an important part of property ownership.
Yet NAR has largely left STR policy to state and local associations. This is quite literally in our backyard.
Maybe it’s time for the nation’s largest real estate trade organization to lead the conversation.
Protect the homeowner who rents her house while she’s away. Protect property rights and the economic engine vacation rentals create. But recognize that an investor buying the house next door and operating it as a hotel 300 nights a year has a different impact on housing supply.
We have two decades of data now. We should be able to tell the difference.
Is the Airbnb $250M housing fund angelic or devilish?
Airbnb says some 750,000 housing units have already cleared most regulatory hurdles but remain stalled awaiting final financing. Now the company is putting $250 million behind getting some of them built.
There is some irony in a company accused of removing housing supply investing in creating more of it. But maybe Airbnb’s investment also points us toward the answer.
Airbnb didn’t create America’s housing crisis. But after 19 years, they may have helped prove something the real estate industry should have figured out by now: Supply matters.
Airbnbs are real estate. The rules governing them affect property rights, housing supply, home values, buyers, sellers, owners and renters. This issue belongs squarely in our backyard.
So perhaps the call to action here is for Realtors themselves. Ask NAR to lead. Bring property owners, Airbnb, VRBO, housing advocates, municipalities, renters and Realtors to the same table. Develop a national framework for responsible STR policy, then give local communities the tools and data to adapt it to their own housing markets.
After 19 years of watching thousands of municipalities write these rules one at a time, Realtors shouldn’t be sitting in the dimly lit basement. It’s time we get out front and improve the curb appeal.
Chris Drayer is co-founder of Revaluate, which segments consumers for marketers by propensity to move.
