Building Owners Can Benefit From Home-Sharing
For Airbnb head of multifamily housing partnerships Jaja Jackson, home-sharing is one of many ways building owners can benefit from partnerships with residents. Residents benefit from the supplemental income while building owners get a slice of the profits.
During Tuesday's Bisnow residential event, Jackson, the keynote speaker, discussed Airbnb’s Friendly Builders Program with moderator Lowney Architecture founder and principal Ken Lowney. Jackson talked about why the program is increasingly popular among building owners and residents.
“Newer developments in urban centers where the customer is professional, mobile and maybe a Millennial in tech or related scientific sectors tends to want the flexibility of home-sharing,” Jackson said.
The average guest is about 38 years old, and more women are hosts than men. Hosts tend to be older than guests and senior women are the fastest-growing group of hosts and are the highest-rated hosts. Airbnb hosts tend to have a college degree and use Airbnb as supplemental income. Guests come from various demographics and income levels, according to Jackson.
Jackson said a recent survey found about one-third of renters are interested in having home-sharing as an amenity while one-third do not care or do not know about it and another one-third do not want it at all. He said he expects if a new survey is done in the fall, the number of renters wanting home-sharing would move up to about 40%.
One way Airbnb is working with business owners is through its nearly one-year-old Friendly Building Program. The program came about after hosts were violating and continued to violate the terms of their leases or were unaware of the lease terms and hosted in their apartments when they should not have. The program provides a way for building owners to better understand home-sharing in a way that makes sense as a business strategy, Jackson said.
The program provides property management tools and sets up rules for residents. Jackson said the program is built around four commitments: transparency, control, insurance and profit-sharing. Building owners receive a weekly report with information about which units are hosting and when guests are expected. The information-sharing provides building owners with more control because they can use that data to set caps on the number of nights each resident can home-share.
Primary and liability insurance with limits of $1M also are included. Building owners set the profit-sharing amount, which Jackson suggests should be 5% to 15%. The program has been rolled out in 20 to 25 cities where laws are favorable to short-term rentals, and Airbnb is seeing additional interest from the owners of midsized and small buildings and REITs across the country.
San Jose is among the cities to have an active Friendly Builders Program, and Equity Residential was one of Airbnb’s first partners. Jackson said the program has been successful at Equity Residential's Vista 99 in North San Jose. The property management team is involved and helps with check-ins and checkouts. Jackson said the owner set a cap and the profit percentage and decided to donate most of those profits to housing charities.
Profit-sharing through home-sharing need not be the only way building owners can partner with residents to increase revenue. Jackson said building owners can design their common areas to provide small office spaces for residents to use for additional payment. Owners also could meet the demand for farm fresh food by offering rooftop gardens with rentable space.
“All of these types of opportunities are unlocked when you rethink your relationship with the resident, and you get a little bit more creative,” Jackson said.
AvalonBay has allowed home-sharing at its San Francisco Market Street property, but has residents paying a fee for hosting.
Since Airbnb's founding in 2008, more than 160 million guests and more than 3 million hosts have used the platform. Jackson said the company has doubled every year and is currently profitable with strong growth in core business and new areas like the multifamily housing sector.
Airbnb recently launched its latest service, Airbnb Experiences, which offers guests the ability to meet with local experts who share interests or experience various aspects of a particular location. Jackson said eventually the platform will include flights and car rides.