News analysis and comments: The impact of vacation rentals on housing is documented | New
Selfless academic studies confirm what some Buena Vista Town staff and elected officials have consistently denied – that short-term rentals lead to increases in rents and decreases in the supply of affordable housing.
The deliberate exclusion of the housing crisis from discussions of short-term rental policies ignores a rapidly growing body of research, both empirical and theoretical, that puts it squarely in the conversation.
This explains the impetus behind the comparative analyzes of the 2015 and 2016 policies by Rees Consulting. The Montrose-based company has produced reports examining the impacts of the proliferation of STRs and municipal policy strategies with respect to workforce housing.
Reports show that in small Colorado mountain towns such as Aspen, Breckenridge, Telluride, Vail and Crested Butte, the increase in STR density has resulted in a reduction in available rentals previously used by employees, which has increased the demand for housing for the workforce and reduced its supply.
The arguments against examining the Buena Vista housing crisis during DOS policy making have been that rising costs and decreasing availability are a coincidence – occurring at the same time but not caused by the proliferation of STRs – and furthermore that the crisis predates the STR phenomenon and should therefore be understood separately, without association.
Additionally, it has been argued that while STRs can exacerbate housing crises elsewhere, this does not speak to the unique conditions found in Buena Vista.
According to Mayor Duff Lacy, City Administrator Phillip Puckett, Special Projects Director Joel Benson and Chaffee Housing Authority Director Becky Gray, the data just isn’t there.
“Unfortunately, there is not yet enough local data to analyze, so there is no defensible way to determine the causality between the number of local STRs and the lack of affordable long-term local rentals,” he said. Gray said. “What other communities have shown us is that there seems to be a tipping point, and it’s a very good thing that we are addressing this trend long before that point,” she said. .
When asked what that tipping point is and what data shows BV or Chaffee County are ahead, Gray objected.
“There are many communities struggling to maintain workforce housing amid an increase in STRs – Google should come up with a few. Crested Butte is a close neighbor in this conversation, ”she said.
A 2018 study published in the journal Land Use Policy examined 237 small towns in Oregon, finding that cities with a density of 5% or more of STRs suffered housing stock impacts. BV City staff reported an STR density of almost 9%.
Gray also noted that US census data and building permit data could be used to determine questions about the housing stock.
A 2014 report from City of Buena Vista staff did just that and reported a 5% rental vacancy and an average labor income of less than $ 12.50 per hour, $ 600 per hour. month or $ 29,000 per year for Chaffee County.
A May 2021 report titled “Chaffee County Land Use & Housing Affordability Solutions” does not present any updated statistics on vacancy or income, but defines labor or moderately priced housing as renting for less. of $ 1,200 per month and $ 400,000 to buy.
Conditions similar to those found at Buena Vista have been investigated, both in terms of Colorado mountain towns and small towns popular with tourists, and the forces at work are sufficiently clear.
“I have regularly asked city officials to downplay the effects of STRs, but not agreeing to a relationship seems to show disinterest in knowing more about a possible relationship,” said Brendan O’Brien.
O’Brien earned a Masters of Science for his research on the effects of short-term rentals on housing in western mountain towns. His thesis examined how current trends in STRs in the western United States fit into a larger model of financialization of the house concept.
Instead of being defined as affordable and stable housing for the residents of the community, it is designed primarily as an investment or a financial tool.
O’Brien used publicly available information to perform a quick point scan of Buena Vista.
He provided numbers similar to the snapshot data presented by Benson in recent board working sessions and said STRs are most likely impacting the local housing stock in the long run.
Vacation rentals are nothing new, and neither is the housing crisis in Buena Vista. However, the entry of vacation rentals into the sharing economy with the advent of AirBnB in 2008 has created further market distortions.
An AirBnB study published in Harvard Law & Policy Review in 2016 describes the causal mechanisms between STRs and their impacts on affordable housing.
“As long as an owner or tenant can earn a substantial premium from AirBnB rather than renting to city residents, there is a powerful incentive to hotelize entire buildings, further reducing the overall housing stock,” says study.
He then explains how short-term rentals mix up the markets between local residential housing and tourist accommodation, which distorts the local long-term housing market. These distortions increase rents and reduce the affordable housing stock.
A data-driven study titled ‘The Sharing Economy and Housing Affordability: Evidence from Airbnb’ and presented at the Annual Economics and Computing Conference 2018, presented similar results using data collected in the entire United States.
“To summarize the state of the housing sharing literature, research (including this article) found that housing sharing 1) increases local rental rates by causing housing stock reallocation; 2) increases house prices both through capitalization of rents and increased ability to utilize excess capacity; and 3) induces the entry into the market of small, short-term housing providers that compete with traditional providers.
Thus, although it is not a single or the most important factor, short-term rental density is known to cause rents to increase and supply to decrease, especially in housing markets. tight housing.
And as all of the city’s real estate agents have reported, the Buena Vista market is indeed tight.
When asked why BV’s housing crisis was not a factor in STR policy discussions, Mayor Lacy highlighted the steps the municipal government has taken since around 2015 to deal with the crisis. housing. He noted the construction of 48 apartments at Collegiate Commons and the city’s involvement in the creation of the Chaffee Housing Authority.
The last item on the agenda for the September 13 board meeting was a report from new town planning director Joseph Teipel on grant applications for more apartments and housing for the workforce. ‘artwork.
That is, the municipal government clearly has long term plans to deal with the BV housing crisis.
But without coming to clear terms on the relationship between the housing crisis and the ever-increasing proliferation of short-term rentals, the risk lies in policies with blind spots and compromised effectiveness.
The best complement to an honest and selfless look at this relationship is an equally honest and selfless look at best policies and practices.
A 2020 study by Kate Bell in The Agora Journal of Urban Planning and Design reviewed much of the literature referenced in this article. The study concludes by recommending local regulations tailored to the needs of the community.
The Bell study notes the importance of developing regulations with the tourism industry in mind in communities where tourism is an economic driver.
Buena Vista Town Treasurer Michelle Stoke described tourism as one of the town’s three economic pillars, along with housing construction and prison.
“Zoning reform should be viewed as a long-term planning tool to deal with changes in the housing market due to STRs rather than a quick fix to remove or reduce the current STR-induced pressures on the housing market. market, ”Bell said.
Additionally, for areas such as BV with high and low season, this study suggests regulations to limit the length of time a property can be rented out on a short-term basis, in order to mitigate market distortion.
“A firm unit cap could hamper the robust tourism industries that are the backbone of these local economies; making otherwise vacant properties unavailable to short-term visitors could reduce potential tourism revenue with little benefit to the local long-term rental market, ”Bell said.
“A time limit to capture peak tourist season while preventing de facto year-round hotels from filling the rental market would do well to support major industries in these regions without inflating rental prices year round.” , she says.
Other recommendations of the study include tax breaks for hotel construction and accommodation taxes for STR income, with the income from the latter to be used exclusively for the development and preservation of affordable housing.
Parts of the Buena Vista STR regulation are in good agreement with the Bell study. For example, the city has instituted licenses and maintains a register of license holders. Applying the code also crosses the registry with the DOS listings.
Code enforcement officer Grant Bryans said about 30 offenders have been identified this year to date.
But the fact remains that owning multiple properties in and around the city presents a great opportunity as market distortions inflate values and encourage taking advantage of higher rents.
Meanwhile, salaried tenants watch rents and house prices rise as wage growth fails to keep pace.
The refusal of local authorities to take the housing crisis into account when developing STR policies is indicative of a complementary desire to rely on high school students, adult children living with their parents and the homeless for serve the city.
In short, allowing people, local or not, to capitalize on housing booms without properly raising wages or investing in social housing will one day lead to collapse.