Vacation towns limit short-term rentals due to housing crisis

STEAMBOAT SPRINGS, Colo. (AP) — In the ski town of Steamboat Springs, Colo., motels line the highway, once packed with tourists eager to hit the slopes or soak in the local hot springs.

Today, residents like Marc McDonald, who rock the town with service-level jobs, live in the converted motels. They cram into rooms, some with small fridges and 6-foot-wide kitchens, or even just microwave kitchenettes. Others live in mobile homes.

LOOK: Soaring house prices and rents are creating a housing crisis

Steamboat Springs is part of a wave of vacation towns across the country facing a housing crisis and grappling with how to regulate the industry they point to as the culprit: short-term rentals such as those booked through Airbnb and Vrbo that squeezed small towns’ limited housing supply and skyrocketed rents for full-time residents.

“It’s like living in a stationary RV,” said McDonald, 42, who lives with his wife in a converted motel room just over 500 square feet for $2,100. per month, the cheapest place they could find. .

McDonald, who works to maintain a local golf course and is a night bartender, and his wife, who is undergoing treatment for thyroid cancer and hepatitis E, said they would be overpriced when rent and utilities climb to around $2,800 in November.

“My fear is losing everything,” he said, “My wife being sick, she can’t do this, she can’t live in a tent right now.”

Short-term rentals have become increasingly popular for second home owners wanting to offset the cost of their vacation homes and make a profit while they’re away. Even real estate investment companies have poured hundreds of millions of dollars into the industry, hoping to get a better return from tourists looking for their own cuisine, a bit of privacy and a break from the rooms. cookie cutter hotel.

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When the pandemic opened the floodgates to remote working, Airbnb listings outside of major metropolitan areas grew nearly 50% between the second quarter of 2019 and 2022, the company said.

Across six Rocky Mountain counties, including Routt County of Steamboat Springs, a wave of wealth has flooded towns, with nearly two-thirds of home sales in 2020 going to newcomers, most earning more than $150,000 in working outside counties, according to a survey by the Colorado Association of Ski Resorts.

Local governments — from Lincoln County on the Oregon coast to Ketchum in Idaho’s Smoky Mountains — are wrestling with how to regulate the $74 billion industry they say fuels their economies while exacerbating their housing crises.

In June, the Steamboat Springs City Council passed a ban on new short-term rentals in most of the city and a ballot measure to tax the industry at 9% to fund affordable housing.

‘Not a day goes by that someone doesn’t tell me he has to move out’ because he can’t afford rent, said Heather Sloop, council member who voted for the arrangement. “It crushes our community.”

The proposed tax is strongly opposed by a coalition that includes businesses and landowners, the Steamboat Springs Community Preservation Alliance. Robin Craigen, vice president of the coalition and co-founder of a property management company, worries the tax will blunt any competitive advantage Steamboat might have over other resorts in the Rockies.

“The short-term rental industry brings people to town, funds the town, and you want to tax it so it doesn’t exist anymore?” says Craigen. “It does not make sense.”

Visitors booking on platforms like Airbnb spent an estimated $250 million in Steamboat Springs in 2021, according to a coalition analysis of local data. If tourism were to drop just 10%, local businesses in the town of some 13,390 people would lose $25 million.

While larger cities, including Denver and Boston, have stricter regulations, such as banning vacation rentals in homes that aren’t also owners’ primary residences, smaller tourist destinations must strike a delicate balance. They want to support the accommodation industry that sustains their economies while limiting it enough to retain the workers who keep it running.

“No one has found the perfect solution yet,” said Margaret Bowes, executive director of the Colorado Association of Ski Towns, which tracks efforts to control short-term rental markets.

“The trajectory of the number of up-and-coming properties (short-term rentals) is not sustainable,” she said. “No one (working in) these communities” will be able to live there.

Susana Rivera, a resident of Steamboat Springs for 30 years, tried living in nearby Craig as a cheaper alternative. Every morning, she would drop off her youngest child at a friend’s house before driving 45 minutes to work at the Steamboat Springs supermarket.

In 2014, she left the grueling routine behind after opting out of the waiting list for an $800-a-month two-bedroom apartment in a government-run affordable housing development. She brings her youngest child, a niece and nephew, and sometimes her mother and couch surfer brother, into the unit.

The Affordable Housing Program is one of the ways local officials are trying to address the problem, but demand significantly outstrips supply.

About 1,200 people have expressed interest in 90 apartments in a new subsidized development, said Alyssa Cartmill, regional property manager for the Yampa Valley Housing Authority.

While major industry companies, including Airbnb and Vrbo, don’t release full data publicly, figures from analytics firm AirDNA and the US Census Bureau show nearly 30% of homes in Steamboat Springs are rentals. vacation.

That represents some 3,000 units removed from Steamboat Springs’ housing supply, as the city’s median monthly rent for a two-bedroom apartment hit $3,100 in August, according to Zillow data.

Median home prices have jumped 68% to $1.6 million since the start of 2020, bringing home values ​​in the quaint town closer to those in San Francisco at $1.8 million, according to the company data.

A study commissioned by Airbnb found that short-term rentals supported 13,300 jobs in popular Rocky Mountain counties and it said had little impact on housing prices. The real problem, he says, is that housing construction has not kept up with job growth. The report also found that only 3% of short-term rentals could be used as workforce housing based on their rental rate.

READ MORE: Rents soar as big companies invest in mobile home parks

“This report underscores the critical role of short-term rentals in Colorado’s tourism economy,” Airbnb spokesperson Mattie Zazueta wrote in an email.

“Vacation rentals provide a diversity of accommodation options for visitors, help some vacation owners and residents pay for their accommodation, and are a key revenue generator in local economies – providing jobs, income and taxes. local communities,” said Expedia Group, Vrbo’s parent company. A declaration.

But the study did not consider other options, such as providing homes that a single worker could not afford for a group living together, said Daniel Brisson, a University of Denver professor and director of the Center for Housing and Homeless Research.

High prices displace not only low-income workers and their families, but also higher-paid workers such as nurses and police officers.

The city’s hospital, Yampa Valley Medical Center, is struggling to find staff as the number of vacancies has risen from around 25 to 70 in the past few years, hospital president Soniya said. Fiddler.

“What keeps me up at night?” Fidler asked. “Will we be able to help the next trauma victim?

Steamboat Springs Police Chief Sherry Burlingame spends her days finding housing and negotiating mortgages for potential hires. Understaffed, the police department has reduced its services while response times have lengthened.

“We have overlooked what it takes to keep this community alive,” Burlingame said.

The new Steamboat Springs ordinance creates three zones. The red zone, where new short-term rentals are prohibited, covers most of the city but those who have rented in the last 12 months can continue to operate. The yellow zone caps the number of new vacation rentals, while the green zone, located largely below the ski mountain, has no cap.

Coastal Lincoln County, Oregon, which relies heavily on tourism, approved a ballot measure in November that would ban new short-term rentals and begin a five-year phase-out of the remainder in some areas. After legal action by vacation rental owners, the measure was suspended and is pending in court.

Steamboat Springs, which has studied what other municipalities have done nationwide, plans to monitor the effectiveness of its new regulations and tax increase, if passed, and adjust as necessary. .

For Sean Bailey, the new laws could not have come sooner. Bailey, who moved to Steamboat in 2019 and works at the Big Agnes outdoor store, sneaks into a room in a mobile home he rents for $650 a month. He’s been on a three-year waiting list for one of Steamboat’s affordable homes.

“My bedroom doubles as a living room, dining room, den, office — all in this 12 x 12 space,” Bailey said. Now, he said, even “low-income housing is unaffordable for many of us who are just trying to get by.”

Jesse Bedayn is a member of the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places reporters in local newsrooms to report on underreported issues. Follow Bedayn on Twitter.

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