How Airbnb Is Going From Multifamily 'Bad Guy' To Landlord Partner

Airbnb and landlords have historically had a tumultuous relationship. 

Property owners would often hear of strangers coming and going from tenants’ apartments despite lease agreements that bar tenants from subletting their units.

“Part of the frustration for multifamily was that we didn't know how to stop it,” said Young Hill, managing director of Greystar’s property management business. 

Airbnb’s solution? Convince landlords to embrace it. 

In November 2022, Airbnb launched a landlord partnership dubbed Airbnb-friendly apartments that would allow tenants in participating buildings to list their apartments on Airbnb, with landlords getting a cut.

It enlisted some of the biggest U.S. owners of apartments, including Greystar, Equity Residential and Starwood Capital Group, and launched with 175 buildings in 25 markets.

The program has more than doubled in size in the 17 months since it launched, scaling to more than 400 buildings and roughly 130,000 units, Airbnb Global Head of Real Estate Jesse Stein said in an interview.

For Stein, that figure is barely “scratching the surface” of what the program could become.

“The growth is great, but it's a low denominator,” Stein said.

The company has received more than 3,000 requests from landlords to participate, he added.

“It's a huge opportunity for landlords because consumers are living and working differently,” Stein said. “They have more flexibility, and with where the cost of living is today, why not monetize your primary home part time to make some extra income?” 

Getting landlords to sign on to the program in the beginning was challenging.

“Every real estate owner had the same response,” Stein said. “‘No, we don't allow subletting. We're never going to do this.’”

Subletting can often lead to a lack of control for landlords. Unknown, unvetted subtenants can cause security issues for other tenants and damage to units. 

In Toronto, one landlord is suing a tenant for $1.6M for listing an apartment on Airbnb despite the lease explicitly prohibiting subletting without permission. In Seattle, a landlord has been forced to live in his van while his tenant sublets the basement of his house for $434 a night. Another landlord discovered that a tenant was subletting an apartment after they went viral on TikTok discussing the rental scheme.  

As a result, Stein understands the hesitancy. To convert landlords, Airbnb promoted the transparency, regulation and control that the program provides. Even so, most landlords tested the program with a few units.

“Every partner has piloted the program with a handful of buildings,” Stein said. “Nobody's come on and said, ‘Here's 100% of our communities.’” 

Greystar is among those landlords becoming less hesitant. The company is the largest owner, manager and developer of U.S. apartments, with nearly 109,000 units owned and almost 800,000 under management, according to the National Multifamily Housing Council. 

Greystar initially included 100 buildings in the pilot program, but the multifamily giant now has 160 Airbnb-friendly buildings and counting.

Landlords “were spending dollars trying to get this to stop,” Hill said.

“Ultimately, for Airbnb, this benefits them, because then they're not the bad guy in the multifamily industry.”

Hill said Greystar’s renters have generated more than $3M from their Airbnb listings, while buildings that participated earned almost $1M in revenue. The program especially targets renters who can travel while working remotely, as they often require a home base but are spending less time there. 

Through the program, landlords have access to an Airbnb platform where they can approve tenants who want to rent out their apartments and have a say over timing and duration of stays. 

The program’s expansion comes as the real estate industry has put pressure on Airbnb. The same year that Airbnb announced Airbnb-friendly apartments, New York City adopted Local Law 18, backed by the Real Estate Board of New York. The law requires short-term rental hosts to register their homes with the city and has depleted the Airbnb stock in the city.

Airbnb is also further exploring partnerships with property developers, in part by becoming one itself. Last year, it was announced that the company is building two luxury condominiums in Florida with developers Related Group and Property Markets Group. Condo buyers will reportedly be able to rent out the units 365 days a year, with few restrictions. 

Miami is already one of the most saturated markets for short-term vacation rentals, with 6,962 Airbnb listings, or nearly 1,500 per 100,000 residents.

Stein confirmed the company is examining the development model and potentially scaling it internationally, but he declined to comment on any plans.