A recent Facebook repost of a 2019 Strong Towns article about Airbnb attracted a lot of comments; some positive and some negative. Bernice Radle (a small-scale developer in Buffalo, New York, who serves on the Incremental Development Alliance) wrote this great piece in response to the conversation.

Back in the winter of 2017, I found myself walking through a vacant duplex in Downtown Niagara Falls—one house away from the fourplex I grew up in. The duplex was sitting in a local preservation district and had been vacant for nearly 15 years…save for a raccoon that seemed to come and go as he pleased. As I inspected the property, I determined the original fireplaces were his favorite place to visit (or escape?) as there were cute little sooty paw prints all over the house.

But the vacant state of the property didn’t scare nor stop me from seeing what I knew to be true: It was absolutely worth saving. The original historic trim, wood doors, hardwood floors, built-in cabinets, and hex-tile floors in the bathroom were all there, just waiting to be appreciated again. It would take love, time, and creative money to restore, but I knew it would be worth it.

At the time, the City of Niagara Falls was implementing an aggressive redevelopment strategy to combat increasing vacancy. They were selling city properties to buyers who would restore them instead of demolishing them, since restored houses pay much more in taxes than vacant lots.

It must have been the magic of the snow or roaring sound of the falls in the background, because I decided to offer $10,000 in a competitive RFP process. We won! The second highest offer that I heard of was $500.

When asked why I offered the above asking price, I reminded them that the doors, trim, and hardware alone are worth more than $10,000, and it is time the City of Niagara Falls—where there is a vacancy crisis—starts valuing its historic architecture.

The Recent History of Niagara Falls

Niagara Falls began declining in the 1960s and decided to embrace urban renewal for a “new downtown.” The mayor claimed urban renewal would solve the decline. So, the City of Niagara Falls tore down every mixed-use building near the base of the actual falls, thinking the vacant land would spark a revitalization. But very little organic development followed the demolitions. Instead, subsidized big box development, civic projects, and parking lots arrived.

The city built a sprawling conference center, an ice rink, a bus terminal and event space downtown to attract tourists. In the 2000s, the conference center was sold to the Seneca Nation for gambling. Politicians cited “job creation” as the reason. The Seneca Nation then gobbled the houses around it for parking, leaving swaths of vacant lots downtown.

A highway was built along the water in the name of urban renewal and it was, ironically, named the Robert Moses Expressway. It added yet another barrier between the expensive conference center and the millions of visitors for whom it was meant.

Manufacturing jobs continued to decline and the infamous “vacancy vortex” took hold. In 2010, it was estimated that one in five houses were vacant. Between 1960 and 2022, the city lost more than 50% of its population.

What does this history have to do with the vacant duplex we purchased? Everything, as it turns out. We purchased the duplex for $10,000 and made a plan to renovate and rent the two apartments out at a working family rate of $800 per month. The renovation budget was $60,000 with a roof, sewer, paint, electrical, and interior renovations. The roof replacement alone was $25,000 of that budget.

Here is the kicker: The banks would not lend money to renovate! (Yes that is screaming text, but really—I am screaming!) The current bank regulations rarely, if ever, support communities in decline. Lending is based on appraisals. The appraisal wasn’t high enough to support a loan, because appraisals are based on value and value is based on comparables in the neighborhood.

What happens when the entire neighborhood has seen decline? Values go down. Banks lose confidence and reduce lending. Properties decline because they can’t maintain the repairs. Vacancy rises. Properties sell for next to nothing. Slumlords move in. Quality of life declines. Vacancies increase. Banks won’t lend because there is limited income potential and minimal value.

How Airbnb Helped Save this Historic Duplex

To bring this building back to life, I needed to show income quickly because I knew the roof, paint, and sewer needed to be replaced within three years. After running the numbers, I decided to rent one apartment and Airbnb the other as an incremental step in giving this duplex an additional 50-plus years of serviceable life.

My team and I did about $20,000 worth of sweat equity on window, flooring, trim, and kitchen restoration to get the apartments ready. We spent cash to upgrade the electric services, hot water tanks, appliances, etc. We stretched every dollar. I was painting on weekends and evenings, my construction company did the work at cost and we scraped together the things for a cute Airbnb offering from friends and family.

For two years, I managed the Airbnb unit for free every single day. It brought in $300–$500 more in income monthly, compared to a long-term rental. That may sound like a lot of money, but it wasn’t enough to cover even half of the roof replacement. However, it was enough to give confidence to the bank to give us about $35,000 to invest in the roof, exterior paint, and sewer.

When everything was all set, we closed the Airbnb and rented the space to residents under a long-term lease. Sure, the mortgage is higher because we borrowed the money, but the house now is sustainable and has a beautiful future ahead of it.

Why Airbnb Matters

I know there will be haters of this article, and I get it. Airbnb is controversial and my heart aches when I hear about it becoming an extractive weapon in some places. My TikTok is filled with rental arbitrage and stories of Airbnb owners making six figures in places they don’t live.

However, we also have to understand the realities of places like St. Louis, Detroit, or Niagara Falls. These towns and cities continue to decline, held back by legacy decisions, population exodus, and current federal banking policies that inhibit desperately needed investment.

Airbnb has the power to do some good for communities. It needs limits, but we know it can be used to positively impact places. It can save a house from demolition. It can help bring tourists into neighborhoods for a more authentic experience. We know those tourists spend more money in the local economy. We know people—especially families—love and prefer Airbnb over chain hotels.

As was described in Kea Wilson’s article for Strong Towns, Airbnb can provide additional income to a family who may need it to cover expenses. In our case, Airbnb became our roof replacement fund when the federal banking system abandoned our neighborhood.