
Airbnb Backyard will sell houses in 2019 - prostoalex
https://www.fastcompany.com/90271599/exclusive-airbnb-will-start-designing-houses-in-2019
======
dougmwne
Attempting a summary since this article was dripping with SV BS. As far as I
can tell, they plan to launch some kind of modular prefab home that could
scale from adding a backyard cottage to your home, all the way to a multi-
family dwelling. There's an indirect hint that they may be considering
including some level of space saving furnishing or some other kind of
batteries included prefab home.

~~~
moflome
Thanks for posting this if nothing else as an counterpoint to the vitriol in
other comments... perhaps the best example of their current work is a joint
effort with a small city in Western Japan [0] which, from having visited this
region of Japan, seems like a great benefit to the local community - economic
and social. I hope this is the direction Joe Gebbia and team are heading.

[0]:
[https://www.airbnb.com/rooms/14378543?s=51](https://www.airbnb.com/rooms/14378543?s=51)

~~~
dougmwne
I usually try to be a bit more constructive than an article summary, but the
discussion here was seriously off the rails. Whatever their failings as a
company, prefab homes at AirBnB scale could be very interesting, especially
since there're ongoing housing crises all over the USA.

~~~
alistairSH
With existing zoning regs, I'm not sure pre-fab at scale will help.

~~~
skksjsnaahs
Recent state legislation in California has legalized backyard cottages in many
places they used to be illegal, including some places where the housing crisis
is worst. I know a homeowner who is making use of that new law to build a
backyard unit. This is a long, difficult, and expensive process. Hiring an
architect, finding a contractor to build it, etc. There are not nearly enough
construction workers locally, they can’t afford to live here.

Prefab backyard homes could be part of the solution - and at scale could make
a big difference.

~~~
alistairSH
While that’s a step in the right direction, it would likely be better to allow
mixed zoning, so we could mix more multi-family into existing urban and semi-
urban areas.

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danenania
This is cool, but selfishly speaking, the area I'd really like to see Airbnb
sink their teeth into is the apartment rental market. I've rented a few long-
term (~3 month) sublets on Airbnb, and the process was _light years_ better
than dealing with landlords.

For example--I've avoided credit cards and loans in the past because I've been
lucky enough to have sufficient savings and wanted to keep things simple. This
means I have a sparse credit history. I've always had a steady income though,
and have rented for many years without ever being so much as a single day late
on a payment. Despite this, I get treated like I'm from outer space just
because I haven't needed to put myself into debt.

It's just such an utterly stupid evaluation criteria. I'm provably a great
tenant, but can easily get passed over in favor of someone who has a much
worse record, but keeps their credit score high. With Airbnb, I am judged by
my actual relevant track record--a lessor can see that again and again I
fulfill my obligations and make a good impression. And of course, there's more
accountability on the other side too since tenants can leave reviews.

There's just so much inefficiency they could clean up here.

~~~
codegoblins
Society operates on credit and you're only hurting yourself by not engaging in
the benefits of having a credit card. Use it like a debit card and you'll earn
cash back and you will build your credit.

~~~
orf
Eh, maybe in the US. I've never owned one and likely never will.

Live within your means.

~~~
chrisseaton
> Live within your means.

Most people don't use credit cards to _borrow_. The point of the credit is
just to hold until the end of the next month and then pay off in one go. The
point of doing that is to allow a period of time to resolve any disputes for
example.

Credit cards give you extra consumer power - actual extra laws backing you up
(at least where I am).

I can't understand people who don't like credit cards if they say it's not
living within your means.

~~~
orf
Because a lot of people don't seem to follow that. You get paid X on the 1st,
as long as you spend X-1 within the month you have no need for a credit card.

Other than showing some opaque credit agency that your ok for more credit.

~~~
chrisseaton
What about the consumer protection aspects? You don't get that with a debit
card. I suppose you don't _need_ it in the same way you don't need lots of
things, but it's ignoring legal protection you could have for free? Plus every
single time you buy on credit you are subsidising my credit card rewards.

~~~
orf
> What about the consumer protection aspects?

Which ones specifically? If they are truly for free then I don't need to pay
for them by virtue of having a credit card.

~~~
pathseeker
>Which ones specifically? If they are truly for free then I don't need to pay
for them by virtue of having a credit card.

Chargebacks, protection against a stolen card, no real money being tied up
during a dispute, etc.

>If they are truly for free then I don't need to pay for them by virtue of
having a credit card.

Every consumer is already paying for them because business price in the credit
card fees into their retail prices. If you don't get a discount for using
cash/debit, you are already paying for this protection.

In the US, by not using a card, you are still paying for the benefits without
getting them.

~~~
orf
> Chargebacks, protection against a stolen card, no real money being tied up
> during a dispute, etc.

I have all of this already.

And they price the risk of a card being fraudulent, which isn't specific to
credit cards.

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resters
For Airbnb this is a very smart move. Airbnb knows demand and supply extremely
well and is poised to be able to offer some very highly leveraged financial
products to fund the buildout.

This is in my opinion the most significant initiative being done by any SV or
YC company. By significant I mean that it promises to end a lot of market
failures and disrupt a lot of big players.

At the risk of making this comment too long for casual readers, I'll
elaborate:

Consider the incentives for developers. They buy and develop plots of land or
existing distressed properties with the goal of bundling as many profitable
sales into the same heavily subsidized financing event.

When the developer sells a property for $500K there may be $250K in the land,
$100K in the structure, and another $150K in things like appliances,
furnishing, HVAC, etc.

The sale is largely emotional and is driven by the way it is legal to bundle
all those add-ons into the subsidized financing. This fact alone explains much
about the housing bubble. The $150K worth of bundled items are worth $75K
after they have been used for a week.

The buyer consents to this because it's the cheapest way to finance a
luxurious lifestyle, even though it's marked up significantly. As long as the
market keeps going up, the buyer doesn't get bitten by it.

Airbnb knows which parts of the financing bundle make sense for long term
value and which can be most profitably leveraged when the unit is used as an
Airbnb listing.

If you think of a rental property simply as an asset, you want the kitchen
renovated periodically to maximize the market value of the listing. Landlords
with 12 month leases, mortgage companies with 30 year mortgages, and most
notably real estate brokers with <30 day commissions have no incentive to
maximize any of those elements, and have plenty of incentive simply to
maximize the amount financed.

Airbnb's interests align perfectly with home buyers on this, in a way that the
incumbents' do not.

If this takes off at scale it will reduce profits for realtors, builders,
developers, and interior decorators/furniture sellers. It's a pretty amazing
opportunity that uniquely maximizes the value of Airbnb's data. Wow.

------
pingec
I guess they need to pivot a bit. Since they jacked up fees to booking.com
levels they are just a booking.com equivalent in my eyes, the prices are not
cheaper anymore.

~~~
dazc
I like paying hotel level prices on airbnb yet, at the same time, be expected
to put up with stuff as if I'm staying over at a friend's house for free. And,
if I don't give a 5 star review, I'm a jerk?

~~~
ralusek
If you don't like it, don't use it. If enough people don't like it, they will
change or go out of business. My experiences have been awesome, personally.

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cbhl
At some point does Airbnb just turn into the Hyatt, except with hotels in the
shape of a gated community instead of in the shape of a big boxy hotel?

~~~
setr
Tbh that still constitutes a significant ahift in societal norms primarily
executed by a single company; if they accomplish just that much, they’ve
accomplished quite a bit (ofc, it's also a naturally goes hand-in-hand with
things like uber).

In a hundred years, architects/urban planners will easily point to this decade
as the age of... something (particularly because with any change in societal
values will come changes elsewhere; if this sticks, we’ll inevitably start
seeing changes in house design and city planning to support it)

------
sethbannon
There's a startup called Cover that's already making homes and ADUs exactly as
Airbnb says they hope to make them. Their vision is to build homes like Tesla
builds cars. If you live in the LA area, you can order one online and get it
delivered in 6 months.

[https://www.cover.build](https://www.cover.build)

~~~
blcArmadillo
Thanks for sharing. These look pretty nice but I just can't get over the price
of a lot of these prefab and tiny homes.

From Cover's FAQ page
([https://www.cover.build/faq](https://www.cover.build/faq)):

    
    
      How much do Cover structures cost?
      Most of our structures cost between $300-400 per square foot, all inclusive.
    

Seems expensive to me. Isn't part of the promise of prefab lower costs?

~~~
why_only_15
Huh that is really expensive. According to Fixr, average cost per square foot
is $117 [0], so Cover is ~3x as expensive. The benefits of going prefab would
have to be pretty extreme to be willing to do that

[0]: [https://www.fixr.com/costs/build-single-family-
house](https://www.fixr.com/costs/build-single-family-house)

~~~
alexisrivas
While $117/sq.ft. is the average cost nationwide, the average in Los Angeles
City – where Cover operates – is a lot higher. In addition to that, Cover
offers backyard homes, which means they're smaller than a full size home.
They're typically between 300-900sq.ft. A lot of the costs of a home are the
mechanical systems, kitchens, bathrooms – which you still need in a small
space. So the smaller you go, the higher the cost/sq.ft. When you look at the
numbers – you can build a 900sq.ft. Cover backyard home in Los Angeles for
$300K. It's hard to even find a good apartment at that price in LA. Full
disclosure - I'm the cofounder & CEO of Cover.

~~~
harmmonica
Alexis, have you guys worked directly with the city to fast track your ADUs
from a permitting standpoint? We’re now converting a garage in LA after a
brutal time with historic review (mostly) and planning/dbs (less so).

Also to confirm what Alexis is saying about LA... We’re in the middle of our
project and though we’re doing it on the cheap it’s mid 200’s per foot. Can
easily see how it could be double that.

~~~
alexisrivas
Harmmonica, Because we build in a factory, we do almost all the inspections
and building safety checks with the State, which is a custom process we've
developed with the state specific to our building system. This means that our
process is faster and more certain than building traditionally. If you're
interested in learning more, email us at hello@cover.build - our team would be
happy to see how we can help!

------
mikeryan
It's interesting to note that California has some incentives in place to help
increase housing and Accessory Dwellings are one that frequently are easy to
get permission to build. I know here in Berkeley we have new laws in place
making this process way easier.

[https://www.berkeleyside.com/2017/03/20/new-laws-make-
even-e...](https://www.berkeleyside.com/2017/03/20/new-laws-make-even-easier-
build-backyard-cottages-berkeley)

~~~
yonran
While the state of California and some cities have been making it legal to
construct accessory dwelling units, cities commonly prohibit short-term
rentals in these accessory dwelling units. (Reference: Berkeley’s BMC
23C.22.020.D [1], and San Francisco’s Planning Code 207(c)(4)(D) [2]). In such
cities, it seems that the law discourages you from adding an ADU with kitchen
if you want to rent it out on Airbnb (or if you want to rent it out long-term,
for that matter, if rent control would apply). It’s less restrictive to add
bedrooms without the kitchen. I don’t think Airbnb will be able to build test
homes in these restrictive cities either.

[1]:
[https://www.codepublishing.com/CA/Berkeley/html/Berkeley23C/...](https://www.codepublishing.com/CA/Berkeley/html/Berkeley23C/Berkeley23C22/Berkeley23C22020.html#23C.22.020)

[2]:
[http://library.amlegal.com/nxt/gateway.dll/California/planni...](http://library.amlegal.com/nxt/gateway.dll/California/planning/article2usedistricts?f=templates$fn=default.htm$3.0$vid=amlegal:sanfrancisco_ca$anc=JD_207)

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vthallam
Well, guess this is a way to add small units to extra space people have which
could then be served as Airbnb's.

Overall, Airbnb experience is not the same. The prices are equivalent or in
certain cases more than what Hotels charge. And in most cases, you don't get
the same kind of privacy/facilities that hotels provide. I stopped even
looking for Airbnb unless it's a really nice place which offers some kind of
experience which hotels doesn't.

~~~
mrgordon
"The prices are equivalent or in certain cases more than what Hotels charge"

You conveniently ignore the huge number of cases where its cheaper than a
hotel (especially a suite for a family) and the fact that it contains a
kitchen and many other time/money saving amenities

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wdewind
I'm pretty sick of celebrating AirBnB. They create so many classic
externalities problems and are doing basically nothing to address them despite
simple solutions being available, like allowing people to look up addresses
and file complaints without being a customer (ie: neighbors of AirBnB owners
that are adversely affected). It's obvious why they don't do this: they know
there are tons of illegal listings that would immediately be identified and
pulled down, and they know that's a significant amount of their business.

This doesn't even begin to address the legalities of subleasing, the negative
real estate market effects for residents, etc. all of which AirBnB chooses to
paper over with ads about how they are helping poor people get additional
sources of income.

We should be careful trusting them in having a significant role in our real
estate system. As a company they behave irrationally and their values, outside
of growth at all costs, are shallow, and as a country real estate provides a
huge amount of our economic backbone. We're all still really mad at the
bankers about the last economic recession, do we want to blame the next one on
the tech companies?

AirBnB: fix your existing marketplace and show that you can run a proper,
legal business before expanding.

~~~
ryanwaggoner
Celebrating? HN is extremely anti-Airbnb.

~~~
throwaway5752
Not really clear on your tone, but HN exists as a tech forum because it is
developed and hosted by Y Combinator, which funded Airbnb in a seed round
(which I believe they still have, and assume is substantially valuable). So
there is the probably more of a complicated community dynamic than "HN is
extremely anti-Airbnb"

~~~
orky56
To that same point, Airbnb investors include pretty much everyone who have
also invested in other startup darlings: Sequoia, A16Z, Crunchfund, Google,
Founders Fund, Greylock, SV Angel, General Catalyst, KPCB

------
Tiktaalik
Such an ADU would already be banned by Vancouver's recent Airbnb regulations.

------
thoughtstheseus
Airbnb is getting people to buy houses, a high priced asset for most, while
they run an asset-light business that devalues physical assets. Crazy

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simonebrunozzi
My humble opinion on what this means for AirBnB and the market:
[https://medium.com/@simon/airbnb-wants-to-reinvent-the-
city-...](https://medium.com/@simon/airbnb-wants-to-reinvent-the-city-one-
house-at-the-time-4f9a9312bd9c)

------
DarkContinent
How does AirBnB plan to ensure compliance with local construction regulations?
That seems like it could be rather expensive for this endeavor.

~~~
interesthrow2
Just disrupt compliance with local construction regulations! it worked with
illegal hotels before...

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xivzgrev
I’m not entirely clear what they are proposing. They want to reimagine
housing, and something about more energy efficient.

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ryanmarsh
Will they also tell me if the property will cashflow on AirBnb at that price?

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calvertdw
Website does not display on Firefox mobile.

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danielor
They are planning on getting growth from that?!?! They should have IPO'd a
long time ago to get their exit.

------
codezero
I'm banned from AirBnB, not that I would buy a house from them, but I wonder
if I would be banned from buying a house from them too :P

~~~
Beefin
Story time

~~~
codezero
When I was out of the room, there was apparently a gas leak in it, and the
fire department kicked in the door. The replacement door cost $1300.

I didn't use the stove/gas, and the power didn't work at all the night before
this happened, it was a poor experience.

The host was great, and told me it was fine, they'd get an insurance pay out.

I was asked to provide evidence I didn't do anything, and wasn't given any
information about the price of the replacement door, the extent of the damage,
or why the apartment supervisor couldn't just unlock the door.

Anyways. The host sent me an image of her insurance payout from AirBnb and
AirBnb asked me to pay them for the damages, so I refused, and was banned.

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vidoc
It'll be a lot of fun if they charge the kind of outrageous fee they collect
for their regular service.

------
matchbok
I wonder what regulations they'll skirt to further extract money out of our
communities like they have been doing so far.

------
ninjakeyboard
"Sell Houses" does not mean "A Service to Put your house on the market" in
this case. Title on HN is a bit misleading.

------
24gttghh
Well at least they're more likely to have to follow local housing/zoning laws
if they're going to be outright constructing new buildings, right? Right??

~~~
djsumdog
Just like Uber does right?

