Once an Evangelist for Airbnbs, She Now Crusades for Affordable Housing

Once an Evangelist for Airbnbs, She Now Crusades for Affordable Housing

Making It Work is a series about small business owners trying to get through tough times.

When Precious Price bought her first home in Atlanta four years ago while working as a marketing consultant, she took advantage of her frequent business trips by renting out her home through Airbnb while she was away. “I knew I wanted to use this as a rental or investment property,” she said. “I started doing it and to be honest, it was very lucrative.”

For Ms Price, 27, and other young black entrepreneurs, online short-term rental platforms like Airbnb and Vrbo represented a way to build wealth on their own terms. With excellent credit and minimal start-up capital — a major barrier for people in this demographic — a professional Airbnb host could put together a series of apartments with long-term leases and then rent them out to vacationers on a nightly basis.

Some of these entrepreneurs see it as a more equitable alternative to corporate America, with its legacy of institutionalized bias and inflexibility toward caregivers and working parents. Others are motivated by a desire to reach out to black travelers, who say they still face discrimination even after platforms like Airbnb have promised to address issues like documented instances of bias.

Ms Price became something of an evangelist, starting social media channels to teach other budding entrepreneurs to follow in her footsteps and launching a digital library of videos, tutorials and advice under the pseudonym @AirbnbMoney.

The irony hadn’t escaped Ms Price that her big real estate ambitions were fueled by the 3,000-square-foot “tiny house” she spent nearly six months building for herself in her backyard. When the coronavirus pandemic severely curtailed travel, brought her combative lifestyle to a halt and wiped out her additional source of income practically overnight, her tiny house allowed her to continue renting out her primary residence and turning a big profit.

She even expanded her portfolio, buying a second home and renting several furnished apartments in Atlanta’s popular Midtown neighborhood, eventually quitting her job as a consultant to run her rental business full-time.

“It was a liberating experience back then,” she said. “I’m making a lot of money that most of my family has never seen in their lives.”

Making up to $12,000 a month, Ms. Price found meaning in her work on social media helping her colleagues achieve financial security. First, she said she has no interest in renting to long-term tenants — the profit margin on tourist bookings is much higher.

“I was adamant that we only rent to holidaymakers,” Ms Price said. “I was just so excited about the rat race.”

Then the disturbing news began to come. One or two at first, then too many to ignore: a litany of increasingly distraught calls and emails from people who didn’t want their Airbnbs for a weekend getaway—they desperately needed a place to call home.

Ms Price realized she was on the front lines of a housing crisis. By renting properties to tourists rather than long-term renters, she and others like her, she said, exacerbated the country’s housing affordability problem in connection with a 2022 TEDxAtlanta talk. “I realized there were conversations going on across the country,” she said.

The pleas and stories of financial insecurity deeply touched Ms. Price, the eldest of five siblings and a first-generation college graduate. She attended Indiana University Business School. “When I got these calls from single moms and college students, I realized that this is the identity of some of my family members,” she said. “And I see the context that I’m not far from that at all.”

She began rethinking her values ​​and retiring from the lucrative vacation rental business. She stopped listing properties on short-term rental websites and divested itself of its rental portfolio over the next few months. “Everyone has their own ethical compass and I felt mine didn’t align with what I was doing,” Ms. Price said.

The few remaining tenants she has now have long-term leases. and the rent she earns is enough to cover her expenses, leaving maybe “a few hundred dollars left over,” she said. She supplements this income with freelance consulting and public appearances. Despite earning a fraction of her previous income, she is more fulfilled and no longer feels burned out, she said.

The housing crisis that Ms. Price experienced in Atlanta is spreading across the country. According to the National Association of Realtors, the United States is missing about 6.5 million single-family homes. For more than a decade, homes were not built fast enough to keep up with population growth, a trend exacerbated by the pandemic. During this period, demand for larger homes grew even as construction slowed, first slowed by public health restrictions, then by labor shortages and supply chain problems that made everything from copper tubing to carpeting scarcer and more expensive.

Affordable homes have fallen: In the fourth quarter of 2022, just 10 percent of new homes cost less than $300,000, even as mortgage rates have roughly doubled over the past year.

These challenges have a cascading effect that has also pushed up rents: Moody’s Analytics found that the average renter now spends more than 30 percent of their income on rent.

“If you look at rental vacancy rates, they’re extremely low,” said Whitney Airgood-Obrycki, senior research fellow at Harvard University’s Joint Center for Housing Studies. “It’s really hard for people to find affordable housing to move into. It is extremely tight, especially for low-income tenants.”

As Ms Price learned firsthand, more and more communities – including Atlanta – have weathered the pandemic, only to find a full-blown housing crisis on their doorstep. Lawmakers are seeking more regulation of short-term rentals, with many trying to deter “professional hosts” as opposed to homeowners who rent all or part of their main residence.

The policies should be granular enough to distinguish between the two categories of tenants, said Ingrid Gould Ellen, professor of urban policy and planning at New York University and faculty director of the university’s Furman Center for Real Estate and Urban Policy.

“Airbnb can be a really useful tool for a lot of people, whether it’s a homeowner who may be struggling to make their mortgage payments, or even a renter who wants to earn an occasional income and rent out their homes while they’re on vacation,” she says called. “These are all forms of use that do not really limit the housing supply in the long term.”

Ms. Price’s experience with the tiny house in her backyard inspired her to look for another way people could create housing — and homeowners could generate rental income. These units, colloquially called “tiny homes” or “granny flats” and officially referred to as annexes, can take the form of tiny homes, guest houses or apartments, either standing alone or attached to the main house. More and more political decision-makers are hoping that these units can help to relieve the strained real estate market.

“She’s working on a pressing issue — the lack of housing in the US,” said Praveen Ghanta, a tech entrepreneur who created the Emerging Founders program, a startup incubator for Black, Hispanic and female founders in Atlanta . Ms. Price, a participant in the program, works on a start-up called Landrift, which aims to serve as a resource center so homeowners — particularly black homeowners — can increase the value of their homes and generate income by building their own tiny homes. “We can make a significant impact, especially in markets like Atlanta,” said Mr. Ghanta.

“Sometimes I think people are fixated on the idea of ​​affordable housing and that it has to be non-profit,” he said. “The reality is that even within standard market tariff structures, a lot of money has to be earned and living space has to be provided.”

Ms. Price has refocused her social media platforms away from managing short-term rental properties and towards promoting the development of small-scale secondary units. “At that point, I want to start acquiring more properties,” she said. She is looking for houses with enough land for a tiny house and at the same time is building a second outbuilding on her first lot – a guest house.

“My plan is to get a piece of land that I could build some kind of housing on, so I can not only take housing, but create even more housing,” she said. “The American dream is real estate.”