Airbnb Initiative Unlocks $5B in Capital to Advance Stalled Housing Projects
Airbnb is looking to narrow the nation's housing shortage gap by investing $250 million, focusing on projects that are stuck in the limbo. The initial funding will unlock more than $5 billion in investment capital over the next 10 years.
The short-term rental giant is concentrating its effort on "last dollar" financing, meaning developments that are ready to begin construction after necessary regulatory approval but lack funding to move forward. Airbnb estimates that this applies to 750,000 housing units in the nation.
The San Francisco-based firm will make its first impact in Austin, with a $6.4 million investment to build 201 affordable units. This is part of the broader St. John redevelopment project, which is planning over 500 housing units.
While mixed-income and affordable units will be the priority, Airbnb's initiative will also include projects offering returns below standard market rates.
"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," Brian Chesky, CEO and co-founder of Airbnb, 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."
Also, as part of its announcement today, the company is making further commitments in the sector. One includes launching a $5 million incentive for five firms or nonprofits that create technologies making home building quicker and cheaper.
Another is that Airbnb noted it will support housing reforms that reduce regulatory barriers and make it easier to build, including for zoning, permitting and updates to building codes. Moreover, the firm revealed that it's supporting the following housing community leaders that advocate for sector reforms: Citizens Housing and Planning Association, Florida Housing Coalition, AURA and Housing Action Coalition.
Source: GlobeSt/ALM