Opinion | Scott M. Estill: Who is Summit County for?
Challenges, Choices, Changes
The Summit Board of County Commissioners has an impossible job when it comes to solutions for the current shortage of affordable housing. Should the county impose higher taxes on short-term rentals? How about buying properties to lease to income-qualified occupants? Perhaps offering tax incentives for those who choose to lease long-term to local residents? Tax credits for private businesses that provide employee housing? Maybe a few deed restrictions to throw into the mix? What about doing nothing and letting the free market work its magic?
So many choices and possibilities, but I think the initial question we must answer is: Who is Summit County for? The answer, like many things in life, depends upon who you ask. Five hundred years ago, you would have encountered the Ute tribe here as they followed seasonal migration routes and subsisted on hunting, fishing and native plants. Just 200 years ago, you would have also encountered members of the Arapaho tribe, who were forcibly moved west from their native upper Midwestern territory. Around this time, the white settlers also arrived, primarily in the form of fur trappers and traders. A flourishing trading center, known as LaBonte’s Hole (now under 79 feet of water, give or take a few feet), operated to serve the needs of the native population and new arrivals.
Gold was discovered in 1859 near Breckenridge, and the game changed. Many silver veins were also subsequently discovered. It took a mere 21 years before the U.S. government took the Ute land and forcibly moved all tribe members to eastern Utah. When Summit County was established in 1861, it was most certainly established on behalf of the new miners. And mining was the name of the game for nearly a century.
It wasn’t until after World War II that the ski industry began to exploit the obvious amenities of Summit County. Following the opening of Arapahoe Basin Ski Area in 1946, it took another 15 years before Breckenridge (a ghost town) became the second ski area to open. Imagine that there are actually people alive today who existed before Breckenridge had a public ski mountain!
17,000 skiers took advantage of Breckenridge’s opening season. Fast forward 50 years and the number jumps to more than 1.6 million. Not all of these skier visits involve people from Denver sitting on Interstate 70 for their leisurely four-hour Saturday morning drive. The visitors need to stay somewhere. And these numbers don’t include all of the visits that don’t involve playing in the snow.
Therein lies the rub. Summit County started by taking land away from multicentury native occupants and giving it to the miners, who in turn have handed the ball off to the ski industry, now fully expanded to encompass the 12-month per year tourism industry. Therefore, any solution to the current housing crisis must start with the fact that Summit County is currently functioning as a tourist play land. This is not a criticism as I and most others have chosen to live here for the same reasons that people from around the world want to visit: beautiful scenery and people, great hiking, fishing and — yes — skiing, to name but a few of the amenities.
Does the fact that we are living in a place where tourists dump more than $1 billion every year (double what it was just a decade ago) in revenue have any impact on which direction the housing question will go? When in doubt, follow the money. And the money here says that more short-term housing will be needed in the future (unless you think fewer people will be visiting Summit County).
If I buy an average Summit County home for $1.58 million, I could likely rent this long-term for $4,000 to $5,000 per month. And at this rent, there would be nothing affordable, as a monthly income of over $13,300 would be needed simply to afford this home. Furthermore, it would not be a stretch to more than double my income by leasing short-term, even after considering the increased expenses associated with a short-term rental. If I am interested in maximizing my investment, I am going to rent to a visiting family from Chicago eager to escape the nastiness of my hometown’s winter and glad to pay my fair-market rate every night (and this rate is also rising). It is safe to say that most investors seek to maximize the return on any given investment.
If we want to begin to correct the affordable housing issues in our community, we cannot rely solely on the free market, as the free market is not financially incentivized to invest in affordable housing over the more lucrative short-term tourist market. Most investments are math problems involving risk and return, and here the math strongly favors the short-term rentals. This also does not consider the number of residential units that are used as second or third homes and will never be rented or occupied full time. Again, does anyone really think the number of non-rented investment properties will actually decrease in the foreseeable future?
Which brings me back to my original thoughts about the commissioners’ dilemma: Letting the market work without any governmental involvement will not begin to solve the current affordable housing issues. Thus, some form of governmental interference will be required, and as with any form of governmental regulation, there will be winners and losers. Glad I am not one of the commissioners.
Scott M. Estill’s column “Challenges, Choices, Changes” publishes biweekly on Thursdays in the Summit Daily News. Estill is an attorney, author and public speaker who lives in Dillon when not traveling or attending to legal matters in Denver. Contact him at email@example.com.
Support Local Journalism
Support Local Journalism
As a Summit Daily News reader, you make our work possible.
Now more than ever, your financial support is critical to help us keep our communities informed about the evolving coronavirus pandemic and the impact it is having on our residents and businesses. Every contribution, no matter the size, will make a difference.
Your donation will be used exclusively to support quality, local journalism.