Summit Alliance of Vacation Rental Managers present incentives for owners with short-term rentals
The Workforce Welcome Program would help guide conversations about how to convert short-term rentals into long-term housing
Summit County continues to explore a number of short-, mid- and long-term solutions to mitigate the community’s affordable housing issue. One of the solutions most discussed includes incentivizing owners of short-term rentals so that they convert their properties into long-term units.
The strategy was originally suggested in a housing presentation laid out by Summit County Housing Director Jason Dietz in June. Dietz suggested that the county identify opportunity zones, or areas that are typically occupied by local residents and workers, and come up with various incentives that would convince owners of short-term rentals in the areas to convert their properties over.
As Dietz and his team continue to research how the strategy could be implemented, another group called the Summit Alliance of Vacation Rental Managers assembled materials to present to the county, most of which detail incentives that could be proposed to make the transition a worthwhile investment and suitable for both owners’ and residents’ interests.
“We thought we would put something together just for consideration to get the conversation started,” said Toby Babich, owner of Breckenridge Resort Managers and president of the Summit Alliance of Vacation Rental Managers.
The document details what the alliance is calling the Workforce Welcome Program. First, the document calls out data from the Summit Association of Realtors’ database from the past 24 months for Breckenridge, Silverthorne, Dillon and Wildernest. This data includes the average purchase prices for a studio, one-, two- and three-bedroom unit. It also uses data from BankRate to determine what the monthly mortgage payment would be for each of these units. The data includes monthly dues, usually for homeowner associations, as well.
Babich noted that this data is meant to be taken as an estimate and does not include what owners may pay for hot tub care, snow removal, cable, internet, electricity, routine repairs and more.
Already, this data is pushing the limits for what a local can afford, especially considering additional expenses. For example, the monthly mortgage in a studio is estimated at $1,392 plus an extra $300 for monthly dues for a total of $1,692 per month.
A two-bedroom is similarly costly. Its monthly mortgage is estimated at $2,238 plus an extra $400 for monthly dues for a total of $2,638. Split between two people at $1,319, this could be affordable for some, but it still doesn’t take into account the extra fees Babich previously noted.
The program suggests that a monthly subsidy ranging from $250 to $1,000 — depending on the unit — should be given to owners to make these units affordable for residents while still covering the expenses of owners. The data suggest this could make a studio cost $1,442 with a $250 per month subsidy. With a $500 per month subsidy, a two-bedroom could be $2,138, or $1,069 split between two people.
Babich noted that these are all ballpark numbers and that nothing is set in stone.
“There is no plan to pull from, there is no tested method of offering subsidies to increase workforce housing or reduce rent,” he said. “It just doesn’t really exist on a large scale in resort areas so we are, by and large, inventing a process that we hope can be vetted out and implemented at some point to at least test a concept and see if it can have any sort of positive impact with what we’re dealing with in terms of workforce housing.”
The document also states a rough goal of converting 100 units, which would cost the county about $516,000 a month in subsidies. The alliance suggests breaking it down by converting 30 studios, 30 one-bedroom units, 30 two-bedroom units and 10 three-bedroom units. Babich said the goal of 100 units is modest, and it could be increased in the future if the program proves successful.
Other incentives the alliance presented to the county include reducing or removing property tax for the owners, and subsidizing seven complimentary nights of lodging per year in Breckenridge for participating owners so they can still access the area, among other things. As for opportunity zones, Babich said the alliance is supportive of the idea.
Ashley Kubiszyn, board member for the alliance and CEO of River Ridge Rentals in Breckenridge, said while she is also supportive of this program, this strategy alone isn’t going to produce the number of units needed in the county.
“I think we’re going to end up finding that unfortunately, this strategy isn’t going to really produce enough units to make a significant difference,” she said. “I think it (has) to be a multifaceted approach to deal with the gravity of the situation we are in. There’s just such a great need right now that even if this program is very successful and we get 100 to 150 units into the long-term pool, that’s still not going to be enough to solve this issue.”
In general, Babich said he believes the short-term rental community has a responsibility to help with the county’s overall affordable and attainable housing issue. He hopes that his industry, along with other partners, can identify solutions that can quickly make an impact.
“As the lodging community, short-term rental community, we really feel like it’s incumbent upon us to be part of the solution and with our seat at the table, start exploring some viable ideas to convert some of the rentals in the county that would make viable short-term rentals into workforce housing,” Babich said. “That’s one of the goals we have and we feel like it’s a short-term goal and it serves a short-term need.”
Summit County Commissioner Elisabeth Lawrence said that county staff and officials are still reviewing the materials. They plan to discuss the proposed Workforce Welcome Program at a Summit Board of County Commissioners’ work session meeting on Tuesday, Aug. 24.
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