Airbnb and the city of Austin on Monday announced a new initiative that will directly benefit Austin residents, revitalizing a historically Black neighborhood through the construction of hundreds of new affordable housing units.
The short-term rental company is providing the final financing needed for the development through its newly announced Airbnb Housing Accelerator, a $250 million initiative aimed at kickstarting construction on stalled housing projects across the country.
Airbnb is providing $6.4 million to help finance 201 income-restricted apartments at 800 E. St. Johns Ave. in North Austin. The investment a funfills ding gap that delayed construction for five years, despite community support for the project and state affordable housing tax incentives.
The units are one piece of a larger development planned for the long-vacant property, which has been owned by the city since 2013. A separate, 325-unit mixed-income housing development is expected to open at the same time, bringing a total of more than 500 homes to the area alongside retail, a park and public artwork.
And despite the company funding the project, Airbnb CEO Brian Chesky said none of the new homes will be allowed to operate as short-term rentals.
It's no coincidence the accelerator's first investment is in Austin. At a news conference Monday, Chesky called Austin a model for housing policy, pointing to the city's surge in housing construction and falling rents as evidence.
"If I could shine a light on a city in the U.S., that city would be Austin, Texas," Chesky said.
For St. John residents, Monday's announcement is the culmination of a much longer debate over the property.
The city of Austin bought the land in 2013, and in 2017, it contemplated building a police station or courthouse on the site. Those options were met with resistance from longtime community members, prompting then-Council Member Greg Casar to encourage the city to work with residents on a new vision for the property.
Thelma Williams, 85, is known around the neighborhood as "Grandma Wisdom," and she was among the residents advocating for more direct community investment.
Williams has lived in St. John since she was 7 years old. She recalled being in the room in 2017 when residents told city officials they wanted to see housing and other development that would improve the lives of people already living there.
"When you bring business to my community, you bring jobs," Williams said. "And people in that area can walk to work. How is it going to improve the people in the community? How is it going to make their lives better?"
After years of planning, the city selected Greystar as the developer. Financing questions eventually threatened the affordable housing portion of the project, stalling construction - until now.
Construction is already underway at the site, Greystar said. The city's affordable housing policies require the 201 income-restricted apartments to open before or at the same time as the 325 mixed-income units.
Mayor Pro Tem José "Chito" Vela, who represents the area, said the various pieces of the project were deliberately planned together. Residents wanted housing, but they also wanted stores, public spaces and an expanded St. John Park.
"We saw this as a cohesive vision," Vela said.
The fight over the property's future carries added weight in a neighborhood with roots stretching back more than a century.
Following the Civil War, newly freed Black Texans began establishing communities where they could buy or rent land and create institutions and services for themselves. During that period, Black religious leaders in Austin established the St. John Regular Baptist Association, and in 1894, that association purchased 303 acres in North Austin, including land that would become the St. John neighborhood.
In 1906, the association established the St. John's Orphanage and Institution, which served as an educational, religious and social center for the community.
The neighborhood changed drastically in the decades that followed.
Austin annexed St. John in 1951, and the association sold most of its 303 acres in 1957 after facing financial pressure. Interstate 35 cut through the neighborhood, while new development gradually transformed the once-rural area. Those changes continued into the late 20th century.
Vela described today's District 4 as a working-class and immigrant community, where the decline in Austin rents in recent years has translated to meaningful savings for families. He said instead of attempting to stop a growing city from changing, he wants to make it possible for existing residents to remain part of the city in the face of growth.
"I want children to be able to live in the neighborhoods they grew up in," Vela said.
The St. John investment is the first of many that Chesky and his team envision through the new Airbnb Housing Accelerator.
Chesky acknowledged Monday that Airbnb itself has long been part of the national debate over housing affordability, as cities grapple with the effect short-term rentals can have on the supply of housing available to local residents.
Now, the company is committing an initial $250 million to projects it says are otherwise ready to build, but lack the final dollars necessary to begin construction. Airbnb estimates the fund could help unlock more than $5 billion in housing investment in the next decade.
That initial $250 million will be focused on U.S. projects, but Daniel Hornung, director of the Airbnb Housing Accelerator, said international expansion is a long-term goal.
"We're a global company, and the city indexing that (Chesky) talked about is global," Hornung said. "We want to expand with this effort as well, but give us at least a year to do well in the U.S. first."
Hornung said the prohibition on short-term rentals in the new development has been part of the accelerator's ethos from the outset.
"With the accelerator, we're focused on building housing, not adding Airbnb inventory or supply, and we wanted to make that really clear," Hornung said. "We wanted to kind of attack the issue right on. When you have private partnerships like this that are about affordable housing, you often have restrictions in place anyway that they can't be used for short-term rentals."
The company's plans for the accelerator extend beyond financing, as well. Airbnb said it will support local organizations advocating for changes to zoning, permitting and building codes. In Austin, it is supporting pro-housing group AURA, including funding that the organization says will allow it to hire its first paid staff member.
Airbnb also plans to develop an index comparing housing policies in cities across the world and said it will make the data publicly available so local governments can more easily see the strategies others are implementing to find success in the housing space.
Chesky said the accelerator itself will address only a small fraction of the country's housing shortage. His larger goal, he said, is for the investments to demonstrate what can happen when governments, communities and private companies innovate to get housing built together.
"My dream is that this can be inspiring communities all over the country to participate," Chesky said. "We must have this will to build."
He said the goal is ultimately to create a future where living in a city is not a luxury, but an affordable reality.
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This article originally published at Long-delayed St. John affordable housing project gets $6.4M boost from Airbnb.