NEW YORK, Nov 30 (Reuters Breakingviews) - Airbnb (ABNB.O) is a boon to mobile travelers - but soon might benefit from immobile, old-school renters too. The $60 billion shared-housing platform run by Brian Chesky is partnering with property management giants Equity Residential (EQR.N), Greystar Real Estate Partners and others to help rent out apartments. The arrangement will allow tenants at their big housing complexes to sublet on Airbnb’s platform. That may draw local ire, like the company's regular offering. But the deal, which secures buy-in from large housing managers that should otherwise hate Airbnb, makes sense in a post-pandemic era.
The agreement paves the way for some of America’s largest landlords to list their empty abodes for traditional long-term leases on Airbnb. Lessors who snag the apartments can then post their places for shorter-term rentals.
In exchange, Airbnb will give the property managers extra visibility and control over who is doing this, and for how long. It’s an acknowledgment by the landlords that a critical mass of their tenants wanted this flexibility, whether they liked it or not. It also helps them to benefit from the growth of short-term rentals: The landlords get a cut of the host's revenue from sublets posted on its platform.
The partnership may face snags. Local municipalities have pushed back on Airbnb’s traditional business after permanent residents complained about messes or raucous parties. Airbnb says that renters only sublet nine nights per month, on average. But if a meaningful number of tenants make their apartment into a hotel room, companies might alienate their most lucrative, permanent renters.
Still, Covid-19 has fundamentally changed people’s habits in a way that could benefit both Airbnb and the apartment rental firms – if they innovate. Among other things, companies have implemented policies that allow for longer-term remote working as a benefit, even as people go back to the office. Plus, the average number of adults per household at Equity Residential (EQR.N) have fallen about 5%, to 1.57, compared to the pre-pandemic era. Lockdowns encouraged more adults to live alone – and solo dwellers might want to exercise their freedom to move around more.
Apartment leases, most often a year long, are notoriously difficult to sign and hard to exit early. In the past, that has enabled apartment companies to hold their tenants hostage to an extra couple of months’ rent. Airbnb reminded people there’s another option. By joining forces, both parties are embracing change in a way that works for everyone.
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(Corrects who the cut of the landlords’ revenue comes from in the third paragraph. The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)
Airbnb is introducing a new listing service that will allow renters to sublet an apartment part-time, the company said Wednesday. The short-term rental firm has partnered with more than 175 buildings owned by companies including Equity Residential in more than 25 cities across the United States.
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