Airbnb Co-Founder’s New Business Is Building Small Homes in Backyards
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Airbnb Co-Founder’s New Business Is Building Small Homes in Backyards

The startup is launching in California, one of the states trying to boost its housing supply

By KONRAD PUTZIER
Tue, Nov 15, 2022 9:25amGrey Clock 2 min

Joe Gebbia co-founded Airbnb Inc. as a company that helped people rent out their homes to guests. His new venture is about adding small homes to people’s backyards.

The new startup, known as Samara, plans to sell factory-produced studio and one-bedroom units to homeowners. The company is looking to capitalise on laxer laws and rising demand for affordable housing spurred by surging home prices and ballooning rents.

Samara is initially launching in California, which is one of the states trying to boost its housing supply by easing restrictions on accessory dwelling units. The modest residences are located on the same lot as a single-family home and in California can be as small as 150 square feet. The state now allows homeowners to build ADUs in their backyard even if the homeowners association prohibits it.

The company, which takes its name from the samara fruit, hopes eventually to expand beyond California. It is betting that worsening housing shortages and the rising popularity of remote work will increase the need for ADUs.

Unable to afford houses of their own, more Americans are moving into converted garages or guesthouses and multigenerational households are on the rise. Meanwhile, people working from home are more likely to need additional space away from noisy children and other distractions.

“Work from home at least once per week has fundamentally changed people’s relationship to their home,” Mr. Gebbia said.

Starting prices for Samara’s ADU line, dubbed Backyard, will range from $299,000 for 430-square-foot studios to $339,000 for 550-square-foot one-bedroom units in the San Francisco Bay Area, with slightly lower prices for homes in Southern California, the company said.

Mr. Gebbia, who co-founded the company with Mike McNamara, the former chief executive of electronics manufacturer Flex Ltd., said the units will be built in factories by a modular construction company. Samara will design and market them. It will also handle applications for building permits and the installation. The customisable homes come with solar panels on the roof designed to meet all the unit’s electricity needs.

Samara isn’t the first company to roll out these small homes, and faces competition especially in California. The state issued nearly 20,000 building permits for ADUs in 2021, up from 12,520 in 2019 and just 1,160 in 2016, according to the California Department of Housing and Community Development.

Samara also faces a challenging economic environment. Construction costs are high by historical standards while inflation, rising interest rates and a weakening housing market are eating into homeowners’ spending power.

Mr. Gebbia, 41 years old, graduated from the Rhode Island School of Design before becoming roommates with fellow Airbnb co-founder Brian Chesky in San Francisco in 2007. The roommates quit their jobs that year and launched the short-term rental company in 2008.

Mr. Gebbia became interested in ADUs when he wanted to build one on his land but found the options underwhelming. “That was a tiny seed that was planted, you can say, by personal frustration,” he said.

Samara started off in 2016 as a research and design unit of Airbnb. Mr. Gebbia said he began working on the ADU concept with Mr. McNamara while still at the short-term rental company. “It got to the point where we both realized this needs to be an independent company. So earlier this year, we moved out of Airbnb,” he said.

In July, Mr. Gebbia announced that he would leave his full-time role at Airbnb. Samara is now an independent startup, although Airbnb owns a minority stake, according to Mr. Gebbia.

 



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Thousands of Australian companies on the brink of going into administration as EOFY nears

Along with high inflation and weak consumer spending, there’s another key factor pushing a record number of businesses to the edge

By Bronwyn Allen
Fri, Jun 21, 2024 3 min

More than 10,000 companies are expected to have entered external administration by the end of the 2024 financial year, a level not seen for more than a decade. Data just released by the Australian Securities & Investments Commission (ASIC) shows 1,245 companies became insolvent in May, the highest monthly number this financial year. At present, a total of 9,988 businesses have gone bust in FY24 with data from June yet to be finalised.

Deloitte Access Economics Partner David Rumbens said the surge in business insolvencies this year was a “clear sign of economic distress”.

He commented: “[ASIC] predicts that by the end of the financial year, the number of companies entering external administration will likely exceed 10,000 – a level not seen since 2012-13, in the aftermath of the Global Financial Crisis (GFC).”

Mr Rumbens said the elements contributing to this year’s surge in insolvencies include high inflation and interest rates, weak consumer spending, and the commencement of more proactive tax debt collection activities by the Australian Taxation Office (ATO).

“One of the key factors contributing to this surge in insolvencies is the [ATO] pursuing debts that were previously put on hold during the COVID-19 pandemic,” he said.

Mr Rumbens cited ATO figures showing collectable debt rose 89 percent in the four years to June 2023. This has particularly impacted small businesses, which account for approximately 65 percent of the total debt owed at about $33 billion. “But more strictly enforced debt collection is coming at a time of tough economic conditions. High interest rates and cost-of-living pressures have weakened consumer spending, particularly in more discretionary components of spending.”

The construction sector has seen the highest number of insolvencies by far in FY24, mirroring the trend of FY23. Of the 9,988 insolvencies to date, 2,711 of them are in the building sector, which faces several challenges. These include a substantial lift in the cost of construction materials that is well above inflation and has made many fixed-price contracts signed within the past few years unprofitable. There is also a significant labour shortage that is delaying new home completions and new project starts, and also adding higher costs to projects.

“The construction sector has been hit particularly hard, with construction firms leading industry insolvencies in every quarter since mid-2021,” Mr Rumbens said. “They have accounted for approximately 25 percent of all insolvencies during this period. The residential construction sector is already facing a backlog of projects to complete as a result of skills and material shortages in recent years, and increased insolvencies in the sector may only exacerbate the problem of housing shortages.”

The ASIC data shows the next biggest industry affected is ‘other services’, which includes a broad range of personal care services such as hair, beauty, dietary, and death care services. The sector has seen 939 insolvencies in FY24. Retail trade is next with 687 insolvencies, followed by professional, scientific and technical services with 585 insolvencies.

“The food & accommodation sector has also experienced a wave of insolvencies. High input costs, worker shortages, and weak consumer sentiment have put pressure on businesses. Specifically, in March, cafés, restaurants, and takeaway businesses accounted for 5.5 percent of total business insolvencies, the highest proportion in the last three years.”

Mr Rumbens pointed out that while the number of insolvencies was high, it represents a lower share of the business sector at 0.33 percent than it did in FY13 when it was 0.53 percent. “This reflects the increase of registered companies in Australia, which has risen from just over two million to 3.3 million since 2012-13. Even so, the continued lift in insolvencies since 2021 highlights the difficult conditions many businesses face at present.”

 

 

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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