If you’ve rented a house in Florida via Airbnb in the past two years, you might have stayed in a home owned by one of the world’s biggest private equity firms and been none the wiser.
In a pilot project launched about two years ago, Texas-based TPG—listed as the world’s sixth largest private equity firm by Private Equity International—has purchased homes in Florida vacation markets, including Fort Lauderdale and Pompano Beach, and rented them out on Airbnb and similar platforms on a per-night basis. Its partner, Kasa, manages the properties.
The project is notable both for how unusual it is and for the context in which it’s operating. Affordable housing debates are rippling across the U.S., with other private equity firms landing in the crosshairs of lawmakers after purchasing thousands of homes for longer-term rentals, often squeezing out first-time home buyers and jacking up rents.
In the case of TPG’s project, which the firm says it does not aim to expand, only about a dozen homes are involved and the focus is on business-leisure (or “bleisure”) travelers, or executives who tack vacation days onto a business trip.
“We started this pilot project almost two years ago as part of our long-standing thematic focus on leisure and selectively only acquired a small number of homes,” a TPG spokesperson told Fortune. “As a result of changing market dynamics and the emergence of more compelling opportunities, we have since concentrated our time and capital on other areas of the real estate sector.”
In one example from the project, a home that TPG purchased for $1.3 million in Fort Lauderdale in March recently listed on Airbnb for $275 a night, with a pool and backyard grill, as reported by the Wall Street Journal.
Other private equity firms have courted controversy by gobbling up large numbers of single-family homes with an eye on longer-term rentals. In July, Democratic senators responded with the Stop Predatory Investing Act, billing it as a way to “restrict tax breaks for private equity firms and other large outside investors that buy up thousands of homes in local communities.”
Meanwhile Airbnb has faced accusations—and contested them—of contributing to higher rents, particularly in larger cities. As the reasoning goes, more properties listed on the platform for nightly rentals means fewer properties available for residents to call their home, and decreased supply leads to pricier housing.
New York City had this in mind when it started enforcing limitations on short-term rentals in early September, resulting in thousands of listings being removed from Airbnb.
It may be too soon to accurately gauge the impact on rents in New York, but in Irvine, Calif., south of Los Angeles, a 2018 ban on short-term rentals contributed to rents falling, according to a study in May by the journal Real Estate Economics. The research, wrote the authors, “provides local governments with empirical evidence that [short-term rental] regulation policies could be helpful in reducing rents in cities and help mitigate concerns of housing affordability.”
Were vacation-market projects like TPG’s to gain momentum, it could threaten both hotels and Airbnb hosts, whatever the effect on housing affordability, if any. Business-leisure travelers might opt for a house with a kitchen and more privacy over a relatively small hotel room, especially if it were managed by professionals rather than random, inconsistent Airbnb hosts.