October 19, 2021

Everybody Thinks Something about the Resort-Town Housing Crisis

Victor, Colorado, had lots of houses when it was a mining town.
Not so many second-home owners back in those days.

Mountain and resort-town housing — the lack of it — is lighting up Rocky Mountain news sites. Town councils are suddenly turning nasty and seeing seasonal homeowners as the obstacle to year-around workers finding a place to live. Or they start cracking down on short-term rentals. Breckenridge, for example:

Breckenridge, with its ski slopes reaching into the middle of town, is a short-term rental haven. The town has 3,945 privately owned homes and condos that vacationers can rent. The town council, in an effort town leaders described as a way “to protect our quality of life and the fabric of our community” and “fiercely protect the character of Breckenridge,” on Tuesday unanimously approved a 2,200-property cap on so-called exempt short-term rentals in the town. Those are the homes that are not part of a larger hotel-like complex that offers a staffed front-desk and security. . . . The vacation-rental strategies deployed in Aspen, Breckenridge, Chaffee County, Crested Butte, Eagle County, Grand County, Steamboat Springs, Telluride and  Summit County all differ, but one thing is clear: The largely unfettered growth of short-term rentals in Colorado’s high country is coming to an end.

Hotel owners must like the idea of capping short-term rentals a lot.

I feel like I have been on all sides of this issue. I have sought Colorado small-town housing in situations of "Take it now, it's the best you can get." 

Then not along ago, I was walking down a street in Taos, New Mexico, and recognized a little apartment where as a twenty-something I had a short-term relationship with a woman who lived there. I don't remember how we met or how she supported herself. What I thought instead was, "I bet that's an AirBnB rental now."

Yet my wife and I were staying in an AirBnB rental nearby ourselves! We like to be able to cook our own meals, for one thing. Sneaking an electric hot plate into a motel room gets old.

On the other side, we were short-term rental landlords from 2002 to 2020, when our county briefly shut down all short-term rentals because of the pandemic — just when we had decided to change from a do-it-yourself approach to listing with VRBO

When we switched our "guest cabin" from long-term to short-term, we knew we were taking a rental property off the market in an area where rentals are very difficult to find. But there were advantages from our end:

  • Short-term renters do less damage. They don't leave junk cars on the property or mysteriously acquire extra dogs.
  • The cabin's well is a little unreliable. It is easy to call someone to haul water for the cistern for short-term guests, but that would be really expensive to do for long-term renters.
  • The short-term approach let us block out times for family and friends and for our own occasional travel. 

Financially, we probably did not do as well, since the business was highly seasonal, but we paid the taxes and insurance and got the income-tax write-off for rental properties. But we could have rented it to that newly hired schoolteacher that you read about in all the news stories, the one who ends up turning down the job because s/he can't find a place to live.

There’s no affordable housing in Mancos. Zero rental units. Nearly no houses on the market. The town’s school district struggles to hire teachers because they can’t find a place to live. It’s the same story with the town government, the hospital and the nursing home.

Maybe if we get the well-situation worked out, we can do that. And new flooring downstairs. Et cetera.

Small towns that want to build municipally funded housing find problems too. Some have to go with geology, others with the construction economy.

Pagosa Springs, for example, has earmarked land for affordable housing but struggled to get the attention of developers. After receiving zero responses to a request to build a dozen units last spring, the town this fall expanded the development to include up to 64 units on three plots of land, offered at little to no cost. It got three responses. 

“These guys are making good money right now building custom homes,” Pagosa Springs councilmember Mat deGraaf said of developers. “If you’ve ever worked in the trades, you make hay when the sun shines. And right now the sun is shining so I don’t fault them.”

So even when towns want to spend money on housing, there can be obstacles.

I don't think it does much good to beat up on that out-of-state person who owns a "Christmas house" in Blue River or Telluride though. They can rent short-term (given a local property manager), but they are not going to rent to that cop or schoolteacher because they themselves want to use the house or condo at certain times. How do you get around that problem? (And don't suggest expropriating these "exploiters"' houses at gunpoint—not likely to happen.)

Playing the "quality of life" card and capping short-term rentals, however, might be politically feasible, but there will lots of pushbacks from people who depend on that income to pay for the "Christmas house." And there is an economic argument.

One short-term rental manager said,

“All the business owners in Breckenridge who rely on visitor spending, they are getting it from my group,” said Carol Kresge, the manager of the sprawling home that was originally built as a B&B but now can be rented short-term by vacationing groups who pay as much as $4,000 a night. . . . “Hearing that short-term rentals are destroying the character of Breckenridge is disturbing and it’s just not true . . . The visitors who visit the lodge are the character of Breckenridge. They come into town and they spend their money at the local restaurants and shops. A cap on short-term rentals is a broad brush approach designed to solve a problem that hasn’t been well defined.”

The economic argument leads to a larger question: Can outdoor recreation "save" small towns in pretty places. Some economists say no. But that is a separate blog post.

1 comment:

Pat, Marcus & Alexis said...

I can't help but note that your photo is of Victor, where one of my grandmother's was born, in 1901.