Short-term rental experts explain industry’s impact on Summit County’s affordable housing issue
Many believe the issue is more complex, short-term rentals are not to blame
Summit County has long had a housing issue, but the problem was exacerbated in the last year partly by trends associated with the coronavirus pandemic. Some point to urban flight where residents from metropolitan areas flocked to rural areas in search of cheaper living or an enhanced lifestyle. Others point to the fact that Summit County is largely built out and has limited land — and a limited number of affordable housing developers — to build upon.
More recently, community members have pointed fingers at short-term rentals. Some suggest that the number of short-term rental units are exponentially increasing in the community, leaving little housing stock for locals. Those within the industry believe the issue to be more complex.
“What’s causing (the problem) is multiple factors that have really exacerbated the issue as COVID began to come to a close. … That’s been a major issue that’s really exacerbated the housing crisis, is just the fact that people find this place desirable to live in, work from and invest in,” said Toby Babich, owner of Breckenridge Resort Managers and president of the Summit Alliance of Vacation Rental Managers.
During the ongoing conversation about housing, many community members have suggested capping the number of short-term licenses moving forward. This potential strategy is being researched by Summit County and its towns, but it’s one Babich said won’t produce the desired impact.
“It hasn’t been proven to be effective in any community it’s been attempted in,” Babich said
Tourist destinations like Summit County usually have a higher number of short-term rentals within the area, and Mary Waldman, owner of Summit Mountain Rentals based in Breckenridge, said this is for good reason. Without these units, the county and its towns would struggle to accrue much-needed revenue.
“We’re a tourist destination. … Our sales tax dollars are generated from overnight guests that spend money (on) $100 T-shirts, $200 spa treatments, $300 bottles of wine at local restaurants and tipping 25%,” Waldman said. “So if we cap short-term rental licenses, we reduce the number of people spending overnight here in the mountains. Then you lose sales tax dollars that are generated.”
Waldman’s company manages about 250 short-term rentals around the county, as well as 37 long-term units. She said that in her opinion, the county’s housing issue has less to do with short-term rentals and more to do with simple economics and recent trends from the pandemic.
“I believe it’s pure economics of supply and demand,” she said. “We have a labor shortage because of a housing shortage, and we have a housing shortage because more people want to live here than what’s available. The Zoom economy has exacerbated the desire for people to come up to the mountains.”
As stated in a housing town hall on Friday, July 30, there are over 4,300 short-term rental units in unincorporated Summit County, which does not include short-term units in the towns of Frisco, Breckenridge, Dillon and Silverthorne.
A few short-term rental units are owned by locals, but many of them are owned by second-home owners. Babich noted that the majority of these people rent out their properties when not in use, which is why these properties are up for short-term and not long-term housing.
“What runs up against the narrative that some sort of cap or restriction will create local workforce housing is the fact that most property owners purchase their properties for lifestyle reasons,” he said. “That means they want to come up and use it.”
William Fuller, owner of Summit County Mountain Retreats, said the idea that a majority of owners aren’t using their properties is “completely false.”
“Almost all of our clients spend a very significant time in Summit County,” he said. “It is where they vacation most of the time. It is in fact their second home. We build projections for our clients for what we think their property will generate for a year, and in those projections, we project about six weeks of owner’s use for the average use.”
Because of this, Babich said if a cap was implemented in the county or elsewhere, many property owners would more than likely be content to let their properties sit vacant so that it’s available for them when they visit. Babich said that only about about 5% of short-term rental owners use their properties for investment-purposes only.
“The overwhelming majority do use their property for between one and 26 weeks,” Babich said. “We’ve had owners use their property the entire summer and rent it during the winter or vice versa.”
In addition to researching what short-term rental caps would look like, Summit County is researching other methods to turn some of the existing housing stock into long-term workforce housing. One such method is identifying opportunity zones — or neighborhoods that are traditionally occupied by locals — and providing owners of short-term units with incentives to convert those properties into long-term housing.
Fuller said his company manages over 400 vacation rentals, and that over 300 of these are located in Keystone with the remaining units dispersed around the county — some of which are located in these zones. Fuller said he does not support this move by the county.
“First of all, I think on a fundamental level, I disagree with the idea that the government should or could come in and change people’s property rights,” Fuller said. “These people purchase their properties with certain ideas in mind … and for the government to come in and say we’re going to change the rules here and the thing you have your livelihood based on is no longer legal … that doesn’t seem to be the American way.”
During the housing town hall on Friday, Summit County Housing Director Jason Dietz said these opportunity zones and incentive packages would be voluntary, and that the county knows not all short-term rental owners within these zones will be interested in participating. Instead, Dietz said the idea behind these programs were to incentivize those who already expressed their interest in helping solve the local affordable housing issue.
Babich said he and other members of the Summit Alliance of Vacation Rentals would like to be considered as partners in the affordable housing conversation moving forward. Recently, the organization sent county staff a letter with insight from the industry as staff continues to develop incentives around the short-term rental market.
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