Opinion | Tony Jones: Don’t regulate the short-term rental industry out of existence
Everything in Moderation
Short-term rental policies are complex, multifaceted and touch on many issues, including free enterprise, personal rights, good citizenship and governmental reach.
Some short-term rental owners might feel that they’ve been caught in this policy crossfire and that regulations seeking solutions to problems such as the worker housing shortage fall inordinately on them. These regulations might sometimes feel punitive in nature, as if economic developments like the emergence of the gig economy are a bad thing and those who participate should be penalized. And while it is undoubtedly true that short-term rental ownership has contributed to housing and other issues, these issues should be addressed through strategic approaches that don’t threaten this significant contributor to local economies.
Folks enter short-term rental ownership with different goals in mind, though perhaps leveraging the value in their primary or secondary home is a goal they all share. I put short-term rental owners into three categories:
- Those who use their primary homes to offer extra living space to visitors for the purpose of general income augmentation
- Those who offer second homes on a part-time basis to offset the cost of that second-home ownership
- Those who have entered the short-term rental market from a purely investment basis, sometimes being an absentee landlord
Some governments have attempted to control this industry through a variety of regulations intended to address the impact that these categories of ownership have on communities. Governments have even gone so far as to craft policy that tries to persuade short-term rental owners to leave the market in a way that helps address the housing shortage.
As a short-term rental owner myself, converting to a long-term rental won’t work, even with the incentives offered. Changing one’s business model is a big ask of someone who wants only to cover some second-home ownership costs while still being able to enjoy the grandeur and amenities of Summit County.
Consider the following:
- Long-term rental might defeat the purpose for second-home ownership in Summit County by limiting the amount of time that one can use the property for their own enjoyment of mountain living.
- A short-term rental owner will likely want to at least cover their mortgage payment, which might be high due to real estate prices in the county. As such, the amount that they would need to charge long-term renters, even if the county subsidizes that cost with additional funding, would probably be out of reach for the workers we’re trying to assist with housing.
- Any property owner must also consider the added burden of being a full-time landlord and the costs of upkeep that grow incrementally higher the longer a property is rented out.
I believe I already pay my fair share in the form of sales and lodging taxes and permit fees. I’m willing to pay more — within reason — to contribute to solutions for worker housing, especially if that taxation is based on income from short-term rental ownership as shown on tax returns, something that levels the playing field between the different categories of owners.
Speaking of leveling the playing field, we’ll also need to ensure that all short-term rental owners are playing by the rules. Governments will need to step up enforcement and levy penalties on those who aren’t doing so. And all stakeholders need some skin in the game, including resorts that benefit from tourism and whose workers are among those we’re trying to house.
Governments need to ensure that they don’t regulate the short-term rental industry out of existence, and I’m glad they’re considering other options, including federal and state funding to address housing issues.
Tax or regulate me out of business, and I might sell my property to the highest bidder. That buyer isn’t likely to purchase expensive Summit County property for the purposes of long-term rental and might not set up shop as a short-term rental, either. In that scenario, you might end up with a property sitting vacant most of the year and contributing little to the local economy and not at all to the worker housing crisis.
Tony Jones’ column “Everything in Moderation” publishes biweekly on Thursdays in the Summit Daily News. Jones is a veteran of the IT industry and has worked in the public and private sectors. He lives part time in Summit County and Denver. Contact him at email@example.com.
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