New program gives landlords a cut of short-term rentals in their buildings, but few have signed up
From the New York website: Airbnb’s attempt to bring landlords into the fold by offering them a cut of revenue is off to a rocky start.
In an effort to get landlords to allow their tenants to rent units on Airbnb, the rental giant launched a program last month which offers landlords a cut of revenue between 5 and 15 percent from Airbnb guests in their buildings.
The program could potentially radically expand Airbnb’s inventory, and may be essential to the startup’s growth. In many of Airbnb’s most popular destinations, like New York and San Francisco, apartments make up the majority of the housing market, and a partnership with landlords could unlock millions of apartments currently closed to the firm, valued in August at $30 billion.
But a month in, the returns aren’t promising. Landlords are concerned about getting entangled in legal and regulatory issues, as well as dealing with the risk of unknown guests.
Margaret Hepfner, a senior executive at Lincoln Property Co., which manages 170,000 apartments nationwide told the Wall Street Journal that she doesn’t see the program “gaining much traction.”
Three more of the country’s largest landlords, AvalonBay Communities Inc, Essex Property Trust and Camden Property Trust, told the Journal that they were not participating but declined to say why.
One rental giant on board is Sam Zelll’s Equity Residential, which owns 80,000 units mainly in coastal cities, and is piloting the program in San Jose, California in one of its buildings. The Real Deal previously reported that Equity Residential was in talks with Airbnb about a revenue-sharing model, and the company was sued earlier this year for allegedly renting out units Airbnb-style at a Midtown building on a consistent basis.
Jaja Jackson, Airbnb’s head of landlord partnerships, told Journal that there’s both a lot of interest and a lot of resistance from landlords. “Airbnb was quite scary to some executives,” Jackson said, adding that many were interested in a potential solution that assuaged their concerns.
While the legal implications are of concern to landlords — in New York for example, lawmakers passed legislation in June that would fine short-term Airbnb hosts $7,500 for listing their apartments for fewer than 30 days — safety and liability issues are an even bigger problem.
“There’s just inherent risk in allowing unknown guests to come onto your property,” Hepfner, of Lincoln Property, said. [WSJ] — Chava Gourarie.