Summit County officials are poised to extend funding for their Lease to Locals program with the hope of keeping current tenants housed, but uncertainty around funding will ultimately dictate how long the program can last and how many residents it can serve. 

Launched in fall 2021 with the goal of “converting short-term rentals into long-term rentals,” the program currently subsidizes homeowners in the town of Breckenridge and unincorporated Summit County, according to county Housing Director Jason Dietz. 

The subsidies allow homeowners to provide below-market rates to seasonal and long-term county employees in lieu of operating a residence as a short-term rental. While funded by the county and town of Breckenridge, the program is operated by Placemate, which runs similar initiatives in a handful of other resort communities across the United States.

“From Placemate’s perspective, this has been the most successful Lease to Locals program,” said Placemate co-founder Colin Frolich, during a Tuesday, Sept. 12, Summit Board of County Commissioners meeting.

Since 2021, the program has converted 107 properties from short-term to long-term rentals. A vast majority of those (87) have been in unincorporated areas of the county, which sit outside town limits. 

Those 87 units have helped house 192 residents, 79 of which have signed 12-month leases. The other 32 opted to rent for six months, for a “seasonal” lease. 

“There is a need and a desire both from homeowners and renters to have the seasonal option in the winter and summer months,” Frolich said. 

Rent is capped between $1,000 and $1,500 per bedroom, depending on the home’s size, with the average rent for an entire unit being $2,400. 

Subsidies are also dependent on home size, with an average payment of $6,909 per bedroom or about $14,000 per unit. At four or more bedrooms, the maximum amount homeowners can receive is $22,000. Those subsidies are less for homeowners who rent for six months, with a maximum of $11,000.

In total, local officials have spent roughly $1.65 million since the program launched, according to Frolich. 

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Demand has since exceeded funding, leading to a pause on new applications for the program earlier this year. With 24 leases ending this fall, 48 residents could be at risk of losing their housing if those agreements are not renewed. 

“Many of the owners are now waiting patiently to understand if there’s going to be additional incentives so they can make decisions on whether they go back to short-term renting or keep their tenants,” Frolich said. 

To extend the life of the program and allow current participating households to gain another round of subsidies, Frolich said the county would need to invest an additional $90,000 this year and next. Currently, $614,000 in funding has been allocated this year with $320,000 in 2024. 

“It really warrants a larger conversation on the incentives and what we want to do for ’24,” said Commissioner Elisabeth Lawrence, who also questioned if it would be possible to increase the pool of participating homeowners, given the demand.  

To afford any new budget increases, Frolich and Dietz proposed reducing subsidies across the board by 20%, which they said would mirror softer revenues seen recently in the short-term rental market. At a 20% reduction, the range of subsidies for 12-month-lease operators would be $8,000 to $18,000 and $4,000 to $9,000 for six-month leases. 

Frolich said the program is already “over budget for 2023, and that has a cascading effect because it then gets us over budget for 2024 right out of the gate.” 

Looking to 2024, officials will also need to decide if the program should be continued at all. One idea floated was to convert the payment program to a master leasing program next year for small businesses that could use the money to pay for employee housing. 

Commissioner Tamara Pogue said she did want to see displacement as a result of not increasing funding for Lease to Locals this year and next. She added she would like to see more support for long-term leases while also acknowledging that incentives would likely need to be reduced. 

Commissioner Nina Waters asked, “Is there a world in which we push a little bit harder, add a little bit more to the budget, expand the program slightly and then really work hard on transitioning to that master lease program?”

Officials ultimately landed on a $100,000 budget increase for this year and next to provide reduced subsidies, which will be aimed mostly at renewals, with leftover funding from non-renewals going to new applicants. Officials did not shut the door on boosting the funding again if it meant bringing on more long-term rentals. 

“If we have an overwhelming demand for the season, we could potentially increase the $100,000 again,” Dietz said.