Airbnb is teaming up with a local developer to create a large apartment complex in Florida

Key Points
  • Airbnb has teamed up with Newgard Development Group to build an apartment complex with 324 units specifically designed for home-sharing.
  • Newgard, under the brand Niido, will own the buildings, but they're designed in conjunction with Airbnb.
  • Tenants will be allowed to rent rooms for up to 180 days, and will share revenues with landlords.
Brian Chesky, CEO of Airbnb
Getty Images

Airbnb is introducing its first branded apartment complex in Florida, a state where strict regulations threaten its growth and restrict its supply of available rooms. The partnership with Miami-based Newgard Development Group marks the first step by Airbnb to design accommodations from the ground up for home-sharing, further challenging the traditional hotel industry.

Under the brand "Niido Powered by Airbnb," the first complex in this project is a 324-unit building in Kissimmee, Florida. The apartments there will feature amenities like keyless entry systems, which make it easy for a tenant to check short-term guests in and out of their homes, remotely.

According to a joint statement from Newgard and Airbnb, tenants will sign annual leases be able to rent rooms or units for up to 180 nights per year, and will share revenues with the landlords who own the unit.

Jaja Jackson is Airbnb's director of global multifamily partnerships, and is taking the lead on this project. He told CNBC that if it works, "we hope that we'd roll this out across the US and internationally."

Newgard is paying to build and will own the buildings. But Airbnb helped design the units, buildings and services provided there.

The apartments in the complex will be connected to an Airbnb app that lets tenants order up services like an apartment cleaning, or a fresh set of linens for their guests. These services will be provided on premises by a MasterHost.

CEO of Newguard Development, Harvey Hernandez, says the partnership brings home sharing to the "mainstream." He told CNBC, "we're bringing the opportunity for all our tenants to monetize the asset they rent from us."

Hernandez says Newguard decided to approach Airbnb with this idea after it looked at the multifamily space and realized that tenants were struggling to afford home in the places they really wanted to live.

"How about if we create a homesharing based community that we can scale and be in every market in the US?" he asked himself. "Airbnb was the perfect partner for us so we pitched the idea and they loved it."

Both Jackson and Hernandez insist that "Niido Powered by Airbnb" is not a hotel. Hernandez says the project elevates his development and if anything, "we're complimentary."

Jackson says, "this is not a hotel format because the experience is individual. The host creates a personalized experience for each guest." He adds, "We're able to put Niido locations in cities and locations that aren't typically associated with tourism."

The idea is to empower Airbnb hosts to deliver a luxury travel experience to their guests, and for tenants and landlords to come to a clear agreement over short-term rentals.

The project expands Airbnb's "Friendly Buildings Program" which shares revenue generated from home sharing between hosts and landlords.

Jackson says the program has been a victory for cities, owners and hosts alike. And as regulations threaten to slow its growth, Jackson says it will help increase the number of hosts across the platform at large.

"The program has proven to, in most cases where it's rolled out, increase hosting by approximately 100 percent. And that means hosting that's now done in a legitimate way, with knowledge of the landlord, the property manager and the cities involved," he said.

Municipal and state laws vary significantly across the U.S. In some areas, local governments prohibit tenants from using the homes they've rented on a long-term basis as alternative lodgings.

Towns like Miami Beach, New York and San Francisco have steeply fined home owners when their long-term tenants have turned their properties into something resembling a youth hostel using Airbnb to book guests for short-term stays.