Opinion | Kim McGahey: Government doesn’t belong in the real estate rental business
Conservative Common Sense
At the Aug. 24 Breckenridge Town Council work session, I was the voice in the wilderness advocating for personal responsibility, fiscal sacrifice and an unemotional perception of our local economy. Predetermined remarks by council and other public comments were dominated by sob stories from short-sighted locals seeking Santa Claus housing solutions from local government because they seem to think they are entitled to live here.
They never mentioned personal sacrifice, saving money for future home ownership or investing in a lesser residence now and riding the local investment wave up to their eventual dream home. Instead, they feel like they immediately deserve a home close to the recreation center, close to Main Street and on the bus route — all to create quality of life for locals and all paid for by the government.
This is socialism’s dead-end solution. On the contrary, free enterprise has brought all the existing homebuyers here for decades with resources that most earned over a lifetime of hard work and sacrifice.
Nobody has the right to live in a cool, clean resort community like ours. Nobody should be compelled to pay for another person’s perceived entitlement to housing. And nobody should expect the government to control the normal supply/demand curve that creates the prices of our exclusive resort real estate.
And real estate is the main driver of our local economy, with an income feature as an integral part of the incentive for most people to own in Summit County. Without that income feature, ski resort property ownership is unattainable, and those necessary purchases would be significantly reduced. The short-term rental income feature allows owners to reduce their costs of ownership while at the same time providing family use and fulfilling the basic lodging needs of the vacationers who make our economy run.
If we reduce short-term rental units, vacationers will no longer come here. They will find other resorts that satisfy their lodging needs. With fewer visitors coming here to vacation, less money will be spent in local businesses, those businesses will close and local workers will be laid off. Limiting short-term rentals will result in a community filled with long-term renters and no economy to support them.
Current short-term rentals are pervasive in our county, providing local communities with significant revenue through licensing fees and local and state rental taxes. The renters themselves contribute to the local economy with beaucoup sales tax revenue on lodging, food, skiing, entertainment and everything else their credit cards swipe while they are here.
The family of four from Denver staying in the short-term rental on High Street is happily pumping thousands of dollars a week into our local economy for the privilege of that convenience. Without that family in that rental, Summit County dies on the vine.
Furthermore, the short-term rental income makes it possible for most people to own our resort real estate and thereby pay the 1% transfer tax into local government coffers. Without the real estate purchases, there is no 1% income to fund golf courses, free transportation systems, recreation centers, performing arts centers and all the other cool stuff that makes our mountain resort community so enjoyable and special.
This proposal by Breckenridge to cap, limit or otherwise restrict short-term rentals is a fool’s errand that is destined to kill the goose that is laying our golden eggs. The Town Council is neither authorized nor qualified to conduct this behavior modification experiment through unconstitutional regulations. More government intervention means less freedom for property owners and will greatly diminish our local economic viability. Let’s keep our local government busy filling potholes and shooting off fireworks and keep them out of the real estate rental business where they don’t belong.
A proper function of government is to provide tax and other incentives to private developers, companies and individuals to help facilitate market-based solutions to local housing needs. Better to find ways for employers to fund workforce housing on satellite land in nearby areas, pay their workers enough to afford local condos or purchase long-term rental units specifically for their employees.
A draconian top-down policy like the one being proposed is the wrong solution.
Kim McGahey’s column “Conservative Common Sense” publishes biweekly on Tuesdays in the Summit Daily News. McGahey is a real estate broker, tea party activist and former Republican candidate. He has lived in Breckenridge since 1978. Contact him at email@example.com.
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