Precious Price became a homeowner in Atlanta four years ago while working as a marketing consultant. During her numerous business travels, she leveraged her property as a source of income by listing it on the Airbnb platform. “I had always planned on using the house for rental purposes or as an investment property,” she stated. “It turned out to be quite profitable.”
For Ms. Price, who is 27, and other young entrepreneurs of color, platforms such as Airbnb and Vrbo opened a new avenue for self-made wealth. A professional Airbnb host, with a good credit score and low starting capital, could amass a collection of apartments on long-term leases and then rent these properties to holiday-makers.
Some young entrepreneurs view this as a more equitable alternative to traditional corporate structures with longstanding biases. Others aim to serve Black travelers who continue to experience prejudice, even as platforms like Airbnb pledge to rectify reported discriminatory practices.
Ms. Price became an avid advocate of this venture, utilizing social media to educate aspiring entrepreneurs and amassing a wealth of videos, tutorials, and advice using the handle @AirbnbMoney.
Interestingly, it was her small 296-square-foot “tiny house” in her backyard that enabled her real estate aspirations. When the COVID-19 pandemic crippled travel and her additional income from Airbnb evaporated overnight, it was this tiny house that provided a lifeline. It allowed her to continue renting her main house, resulting in substantial profit.
She expanded her business, purchasing a second property and renting out several furnished apartments in the desirable Midtown area in Atlanta. Eventually, she quit her consulting job to focus full time on her rental business.
“It was an invigorating experience at the time,” she mused. “The income was more than anything my family had ever seen.”
Ms. Price was pulling in about $12,000 per month and found fulfilment in helping others gain financial stability via her social media presence. Initially, she had no interest in hosting long-term tenants as the profit margins from holiday bookings were markedly higher.
“I was unequivocal about my preference for vacationers,” stated Ms. Price. “I was engrossed in the race to maximize profits.”
Thereafter, she began receiving troubling messages. Initially a few, then an avalanche of desperate pleas from individuals needing a home to live in, not a weekend getaway.
Ms. Price realized that she was contributing to a housing crisis. By preferring tourists to long-term renters, she was aggravating the imbalance that fueled housing affordability issues nationwide, a topic she spoke passionately about during a TEDxAtlanta talk in 2022. “I noticed the same conversation was happening in different parts of the country,” she stated.
The heart-rending pleas and precarious financial situations resonated deeply with Ms. Price, who is the eldest among five siblings and the first in her family to attend college. “The reality hit me when single moms and students began pleading for help; some of my own family members are in the same boat,” she admitted. “I could see that I am not far removed from these situations.”
Ms. Price decided to rethink her priorities, gradually moving away from the profitable vacation rental business. She withdrew her properties from short-term rental platforms and gradually liquidated her portfolio. “At some point, everyone confronts their moral compass; mine was certainly conflicted,” confessed Ms. Price.
She now has a handful of long-term tenants, barely clearing a profit, which she supplements with income from consulting and public speaking assignments. Though earnings are significantly lower, she is happier and more fulfilled, no longer feeling stretched thin.
The housing crisis she saw unfolding in Atlanta is reprising nationwide. As per the National Association of Realtors, there is a deficit of around 6.5 million single-family homes in the United States. Over the last ten years, home construction has lagged population growth, a trend exacerbated by the pandemic. Simultaneously, demand for larger homes surged while construction slowed due to health restrictions, labor shortages, and supply chain issues that resulted in scarcity and inflation of essential construction materials.
Affordable housing availability has plummeted: less than 10% of new homes cost under $300,000 in the last quarter of 2022 as mortgage rates almost doubled throughout the year.
Rents have also skyrocketed in response; an analysis by Moody’s revealed that the average renter now spends over 30% of their income on rent.
“Rental vacancies are extremely scarce,” claims Whitney Airgood-Obrycki, a senior research associate at Harvard University’s Joint Center for Housing Studies. “Finding an affordable place to live is extremely challenging, especially for low-income renters.”
Ms. Price observed firsthand how cities, including Atlanta, struggled with burgeoning housing crises after emerging from the pandemic. Lawmakers are pushing for stricter regulations on short-term rentals, aiming to dissuade “professional hosts” and promote primary homeowners who rent out their homes.
Ingrid Gould Ellen, a professor at New York University specializing in urban policy and planning, insisted on distinguishing between these two categories.
“Airbnb can be beneficial for homeowners struggling with mortgage payments or for tenants looking to supplement their income by renting out their units for short periods,” she opined. “These practices do not deplete the long-term housing supply.”
Ms. Price’s experience with her ‘tiny house’ in the backyard changed her perspective on housing. Commonly known as ‘tiny homes’, ‘granny flats’, or accessory dwelling units (ADU), these properties can either be stand-alone or attached to the main house. Policy makers believe ADUs can alleviate some of the pressure on the strained housing market.
“She is tackling a significant problem – the insufficient housing supply across the U.S.,” says Praveen Ghanta, a tech entrepreneur and the creator of Emerging Founders, a startup incubator for Black, Latino, and female founders in Atlanta. Ms. Price is one of the participants and is developing a startup called Landrift. The purpose of this venture is to aid homeowners, especially those of color, in adding value to their properties and generating income by constructing their own ‘tiny homes’. “We can make a substantial difference, particularly in markets such as Atlanta,” Mr. Ghanta says.
“There is a common misconception that affordable housing must necessarily involve non-profit means,” he adds. “But the reality is that there are opportunities for profit while providing housing within market rate limits.”
Ms. Price now directs her social media presence towards encouraging small-scale development of accessory dwelling units instead of managing short-term rental properties. “At this point, I am considering buying more properties,” she says. She is in search for properties with sufficient land to accommodate ‘tiny homes’ and considering building another guest cottage on her existing property.
“My plan is to find a property where building additional housing is feasible so I’m not just acquiring housing but also creating more,” she maintains. “Real estate is truly the American dream.”
She Was Once a Proponent for Airbnbs, Now She Advocates for Affordable Housing
