Airbnb shows promise as a near-immobility company

NEW YORK, November 30 (Reuters Breakingviews) – Airbnb (ABNB.O) is a boon for mobile travelers – but could soon benefit old-school stationary renters as well. The $60 billion shared housing platform led by Brian Chesky is partnership with property management giants Equity Residential (EQR.N), Greystar Real Estate Partners and others to help rent apartments. The arrangement will allow tenants of their large housing complexes to sublet on Airbnb’s platform. This may attract local ire, like the company’s regular offering. But the deal, which secures buy-in from big accommodation managers who might otherwise hate Airbnb, makes sense in a post-pandemic era.

The deal clears the way for some of America’s largest landlords to list their empty homes for traditional long-term leases on Airbnb. Landlords who take apartments can then advertise their units for shorter-term rentals.

In exchange, Airbnb will give property managers additional visibility and control over who is doing this and for how long. It’s an acknowledgment by landlords that a critical mass of their tenants wanted this flexibility, whether they like it or not. It also helps them benefit from the growth of short-term rentals: landlords receive a portion of the host’s income through sublets published on its platform.

The partnership can face hitches. Local municipalities have pushed back on traditional Airbnb operations after permanent residents complained of disorder or loud parties. Airbnb says tenants only sublet nine nights a month, on average. But if a significant number of tenants turn their apartment into a hotel room, companies could alienate their most lucrative permanent tenants.

Yet Covid-19 has fundamentally changed people’s habits in ways that could benefit both Airbnb and apartment rental companies – if they innovate. Among other things, companies have policies in place that allow longer-term remote work as a benefit, even when people return to the office. Additionally, the average number of adults per household at Equity Residential (EQR.N) fell about 5%, to 1.57, from the pre-pandemic era. Lockdowns have encouraged more adults to live alone – and solitary dwellers may want to exercise their freedom to move more.

Apartment leases, most often for one year, are notoriously difficult to sign and hard to get out early. In the past, this has allowed apartment companies to hold their tenants hostage for a few extra months’ rent. Airbnb reminded people there was another option. By joining forces, both parties embrace change in a way that works for everyone.

Follow @thereallsl on Twitter

(Corrects where owner income cut comes from in third paragraph. Author is a Reuters Breakingviews columnist. Opinions expressed are her own.)

BACKGROUND NEWS

Airbnb is launching a new listing service that will allow tenants to sublet a part-time apartment, the company announced on Wednesday. The short-term rental company has partnered with more than 175 company-owned properties, including Equity Residential, in more than 25 cities across the United States.

Editing by Jonathan Guilford and Amanda Gomez

Our standards: The Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and non-partisanship by principles of trust.