Earlier this week, I stood in the Austin Public Library as Airbnb’s Founder and CEO Brian Chesky announced the launch of the Airbnb Housing Accelerator, Airbnb’s new initiative to increase housing supply through investment, advocacy, and innovation, including the Accelerator’s first investment in an affordable housing development in the historic St. John community of Austin.
The spirit of partnership and community in the library that day brought the Accelerator to life in a way that no white paper or term sheet ever could. The people in the room had been fighting for the St. John redevelopment for the better part of two decades. Thelma “Grandma Wisdom” Williams, a community leader in her eighties, had spent much of her life pushing for affordable housing and the economic empowerment of her historic St. John neighborhood. José “Chito” Vela, the city council member and mayor pro tem, stood shoulder to shoulder with his constituents to make the project real after his predecessor, now-Congressman Greg Casar, had done the same; both understood not just the vision but the granular mechanics of what it takes to finance and build housing. The city had held the land for more than a decade. A developer stayed with a hard deal through multiple years, even as a changing macroeconomic climate meant the financing kept slipping out of reach.
The energy and dedication of refusing to give up was inspiring and set the stage for the Airbnb Housing Accelerator’s role: helping to finish what all of them had started. Our $6.4 million preferred equity investment – at well below a market rate of return – completed the capital stack for 201 affordable homes inside a larger redevelopment that will bring more than 500 units of housing, retail, a park, and public art to life. And none of the homes in this redevelopment will be listings on Airbnb: our goal is to create more housing supply, not more Airbnb supply.
Airbnb isn’t new to housing. Brian and his co-founders started the company because they couldn’t make rent, and turned their San Francisco apartment into a place to stay during a design conference. Ever since, Airbnb has also been a critical tool to help hosts afford housing. Roughly a quarter of Airbnb hosts say they are retired. Of hosts who work part-time or full-time, more than 20% work in health care or education and social services. And the typical host in the United States earned $15,600 last year on Airbnb: that’s around two-thirds of a typical annual mortgage payment.
But with the Airbnb Housing Accelerator, we aim to contribute to housing solutions in a new way – by helping to build more housing in more places, through investment, advocacy, and innovation. As I learned in my previous role leading housing policy efforts at the White House, as Deputy Director of the National Economic Council, progress in building homes often comes from listening and collaboration: no one actor, public or private, can build housing alone.
That’s why we designed the Accelerator not just as direct investments in housing projects, but as a set of four commitments meant to reinforce one another and, more importantly, to reinforce the work already being done by others across the housing ecosystem:
Investment – The Accelerator starts with capital. We are making an initial $250 million commitment to last-dollar financing with returns significantly below standard market rates. These preferred equity investments or mezzanine loans will be made in affordable and mixed-income projects that are ready to build but short their final increment of funding. Research from the Center on Public Enterprise estimates that some 750,000 units across the country have cleared most regulatory hurdles yet still lack the financing to break ground. Because we recycle our returns into new deals, we expect that $250 million to unlock more than $5 billion in development over the next decade.
Reform – We know that capital alone isn’t sufficient. So our second commitment is to the local organizations doing the essential work of zoning, permitting, building code, and impact fee reform — partners like CHAPA, the Florida Housing Coalition, AURA, and the Housing Action Coalition — and to foundational research with the Chicago Urban League on why some existing programs fall short of improving housing in communities that are most in need. These leaders and advocates know their communities and our role is to back them.
Innovation – The same instinct shapes the rest of the work: through the $5 million Airbnb Housing Innovation Prize, we’ll back five ventures over five years developing technologies that make building faster, cheaper, and easier.
Data – And later this year, we’ll release the Airbnb City Index, a data tool comparing cities on their housing policies and outcomes, built so that advocates, researchers, journalists, and policymakers can argue from shared evidence rather than talk past one another.
The National Housing Conference has spent decades convening exactly the kind of partnership I watched come to life earlier this week at the Austin Public Library. Our goal now at the Airbnb Housing Accelerator is to help that same spirit come to life in more places, delivering more affordable and quality housing choices for more people, while enabling and catalyzing further action from partners who’ve spent decades building housing and partners who are new to the work but recognize housing affordability as one of the most pressing economic challenges of our time.
If you’re working on a housing development that needs capital, tell us about it here. And if you’re working on a regulatory reform effort or a housing technology venture, we’d love to chat about it too. We’re eager to get to work – and to build – alongside you.