Home rental company Airbnb says it will invest $25 million toward affordable housing and other community needs, the latest plan by tech firms to ease a housing crisis their rapid growth has helped exacerbate.
Airbnb said the money would be split between Los Angeles County and the San Francisco Bay Area, the state’s largest urban centers, where residents are grappling with sky-high housing costs and a surge in homelessness. In addition to the preservation or creation of below-market rental housing, Airbnb said it would direct funding toward promoting homeownership for low- to moderate-income households, financing “meaningful infrastructure initiatives” through municipal bonds and supporting small businesses through loans.
“These investments have the potential to generate solid returns for our company and make communities stronger,” Airbnb Chief Executive Brian Chesky said in a statement.
Gov. Gavin Newsom, who has called on tech companies to support affordable housing, said in a statement Airbnb’s investment was “a critical first step on behalf of their community, and we need more businesses to follow their lead.”
Given the scale of the housing crisis, the money is unlikely to go far.
Affordable-housing developers use a variety of financing sources to get a project off the ground. But using one gauge of the cost to build affordable housing in California, $25 million would be enough to build 76 new homes.
Airbnb acknowledged the money wasn’t huge but said if the investments were successful, the company might expand the pilot program, directing more resources to “projects that support families and communities throughout California and across the country.”
California is among areas with the most pressing need.
Since 2012, the median home price has soared nearly 80% to $548,600 while the average rent for a vacant apartment is up 42% to $2,288, according to Zillow.
Many economists blame the swift rise on cities and residents who fight new development and block builders from constructing enough homes to meet demand from population and job growth. Several recent studies have also found rising rents in high-cost areas lead to increased homelessness, tipping already at-risk people into the streets.
Tech firms have drawn criticism for not doing enough to mitigate the effects on communities of their rapid expansion. Beyond the Bay Area, well-paid tech workers have put upward pressure on rents and home prices on Los Angeles’ Westside as Venice and Playa Vista have morphed into the tech hub known as Silicon Beach.
Earlier this year, Newsom said he was meeting with Silicon Valley executives about contributing $500 million to provide developers with low-interest loans to help build housing for middle-income residents. That money has failed to materialize, but Chesky said Airbnb’s investment was inspired by the governor’s leadership.
Other companies have also made their own announcements, separate from the middle-income plan.
Written by Andrew Khouri for latimes.com.
