Airbnb to Invest $25 Million in Affordable Housing in California
Airbnb is pledging $25 million toward affordable housing in the San Francisco Bay Area and Los Angeles County. If successful, the pilot program could be expanded to support additional communities across the state and the nation.
Airbnb co-founder and CEO Brian Chesky announced the pilot program at the 2019 Philanthropy Innovation Summit at Stanford University during a panel discussion that included Gov. Gavin Newsom.
The home rental company joins a growing number of businesses putting their money and support toward addressing the affordability and homelessness crisis. The move also comes at a time when affordable housing advocates have expressed concern that short-term home rentals are exacerbating the lack of permanent affordable housing in many communities.
“When it comes to confronting our state’s housing crisis, it’s all hands on deck,” said Newsom. “Government, businesses, and philanthropy must work in partnership to tackle the number one cost-of-living challenge for families up and down our state. I applaud Airbnb’s $25 million investment in affordable housing for the Bay Area and Los Angeles. It is a critical first step on behalf of their community, and we need more businesses to follow their lead.”
Airbnb’s Community Impact Investing program is administered in partnership with RBC Global Asset Management (RBC GAM). Working with local lenders, RBC GAM will invest the $25 million from Airbnb in the Bay Area and Los Angeles County. Potential areas of investment must meet at least one of the following criteria:
· Support access to affordable homeownership for low- to moderate-income households;
· Preserve or increase access to affordable rental housing and workforce housing opportunities;
· Finance meaningful infrastructure initiatives in designated areas; and
· Support small businesses that serve the community, create jobs, and deliver more goods and services to the residents of the desired areas.
“The investments will be fairly liquid so we will be able roll over the $25 million a number of times,” Ron Homer, chief strategist of U.S. impact investing at RBC GAM, told Affordable Housing Finance. “In terms of total activity that it can support over time, it should be substantially more than $25 million.”
For example, when loans are paid back, those funds can be reinvested, and bonds can be sold in the secondary market with those funds being recycled as well.
Officials expect Airbnb’s investment to be deployed in a number of areas, including providing the debt portion for affordable multifamily projects, including takeout financing, according to Homer. In particular, Homer said he hopes to work with the California Housing Finance Agency to either buy bonds or direct loans that the agency makes for affordable housing.
“We’ve been working with banks, insurance companies, foundations, and public pension funds, but this is the first corporation that is using some of its liquidity and cash to make an investment that aligns with its values and mission,” said Homer. “We think it’s significant.”
Airbnb will evaluate the success of the initial investments in the months ahead and may work with additional financial partners to expand the Community Impact Investing program to serve additional communities throughout the United States.
“Investing in affordable housing and small businesses is the right thing to do for our state, and it is the right thing to do for our business,” added Chesky. “These investments have the potential to generate solid returns for our company and make communities stronger, and I expect that we will expand this program in the years ahead.”