Short-term rental companies have been blamed for worsening the housing crisis for years, and now the industry's leader is launching an effort to fund new affordable homes.
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Airbnb is committing $250M to fill financing gaps for housing projects across the country, the company announced Monday. The funding will prioritize affordable housing, with the first investments going to a 201-unit project in Austin.
“The ability to afford housing is part of the foundation of Airbnb. The company was launched because we couldn’t afford our rent — and today, that reality exists for millions of Americans,” Airbnb CEO Brian Chesky said in a statement. “The housing crisis wasn’t created overnight, and it won’t be solved overnight. But we can start moving in the right direction, and that is exactly what the Airbnb Housing Accelerator is designed to do.”
The Airbnb Housing Accelerator program will distribute funds to developers that need to bridge gaps that make it hard for a project to move forward. The company said its returns will be below market rates, and it will reinvest the returned funds into additional housing projects.
For its first project, Airbnb will provide $6.4M in financing to a developer in Austin. The project will be at the site of a former Home Depot and a car dealership. The 201 units will be part of a mixed-use development, and the units won't be allowed to be listed as short-term rentals.
The short-term rental company estimated the $250M in initial investment could translate to more than $5B in capital.
On top of the investments, Airbnb plans to support zoning and permitting reforms in communities that would make housing production easier and faster. The short-term rental company announced support for local leaders, including the Citizens' Housing and Planning Association, the Florida Housing Coalition and the Housing Action Coalition.
Airbnb is also offering a $5M housing innovation prize for innovators and entrepreneurs who are developing technologies and designs that will make it easier, faster and cheaper to develop housing.
The moves come after Airbnb has faced backlash from local communities for its part in the housing crisis. Local advocates argue the company has taken apartments off the market for short-term rentals that could be used by permanent residents. Cities including Houston, Chicago and New York have proposed or approved legislation to curb short-term rental use.
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