The Short-Sighted Nature of Short-Term Rentals
The Short-Sighted Nature of Short-Term Rentals
My uncle once told me that his state of Utah would be “paradise on Earth if it weren’t for all the fucking Mormons”. I kind of feel like tourists have the same impact here on Summit County, Colorado. Oh sure, I get it- tourist dollars are what fuel this region’s economy, and none of this would really exist without them. But do there have to be so many of them? And do they all have to be so damn stupid and blithely ignorant of even common-sense safeguards to our community? No, this is not going to be some long-winded rant about tourists here in Summit County. But it is long past time to take a closer look at the modern phenomenon that enables them all to come here. You see, not all technology is unequivocally beneficial, and often the long-term impacts of something like short-term rentals aren’t fully realized until it’s too late to do much about it.
The whole concept of short-term rentals really came into vogue when in October 2007, roommates and former schoolmates Brian Chesky and Joe Gebbia came up with the idea of putting an air mattress in their living room and turning it into a bed and breakfast. Offering up their rental online, their idea quickly morphed into what we all know now as Airbnb. And to be honest, the notion seemed on its face to be a win-win for all involved. Customers had an opportunity to stay in real neighborhoods at a more affordable price while property owners got a little extra cash for a side hustle that didn’t take much effort on their part. Sure there was the occasional loud or even criminally-intent renter, and the fact that our current financial system dictated the need for leasing out rooms in our own home seemed perverse, but hey, the relationship was generally mutually beneficial to both parties. But then the idea behind Airbnb grew and morphed into something else altogether.
As potential investors, those already armed with boatloads of extra cash, started to take note of this budding enterprise, they began to buy up houses in desirable locations and turn what once was housing for actual families into glorified hotel rooms for tourists. While there are now numerous competing companies such as Vacasa, Airbnb alone reports over 7 million property listings worldwide with a near 1 billion annual visitor rate. More often than not, the property owners do not live on the premises, using the property solely for rental income, and frequently even live outside the geographical area, thus taking almost all of the economic benefit of the short-term rental out of the community the property resides in. And that’s only where the problems begin.
Now I was hardly an Economics major in college, in fact, I barely took another Math class after the day I graduated high school, but even I can tell you about the basic principles of supply and demand. In small tourist areas, such as Summit County, where housing is relatively limited, the repeated practice of purchasing single-family homes for the sole purpose of short-term rental investments dramatically impacts the housing supply and drives up the cost for housing to levels that quickly become unaffordable for the folks who actually live and work there. A study published in 2017 found that increasing Airbnb listings in a given neighborhood by 10% leads to a 0.42% increase in rents and a 0.76% increase in house prices. According to Redfin, the median price for a home here in Summit County has risen 42.6% in the past year to $1.28 million. Who the hell can afford to pay that other than other short-term rental investors looking to cash in on the opportunity to garner a steady income from the property? But the problem is not just relegated to smaller tourism-based communities. Cities such as New York and San Fransisco have begun pushing back against short-term rental companies such as Airbnb, arguing that these purely investment properties are making these communities unaffordable for the people who actually live there all so that out-of-state investors can line their pockets on the backs of the communities they aren’t a part of. A study found that on Manhattan’s Lower East Side, full-time listings earned hosts an average of two to three times the median average rent. In the end, the ever-increasing costs of housing have ripple effects throughout the communities themselves.
The biggest corollary to all of this is the labor shortage. Unable to afford to live in the very communities they work, many employees have been forced to either relocate to neighboring communities or simply back their bags, leave their jobs and head elsewhere. This impact is most dramatically felt in labor fields that are most crucial to the health and well-being of the actual communities themselves. Teachers, construction workers, bartenders/servers, and medical staff have all been priced out of their communities, leaving gaping shortages that remain unfilled. These voids wreak havoc on communities unable to find enough workers to fill the jobs that make the community livable in the first place. The result is a deterioration of the community for those who live there all for the benefit of tourists and investors living somewhere else.
While long-term answers to the problems created by these short-term rentals are never easy now that the Pandora’s box of Airbnb has been opened, there are some recourses available to these communities. If the residents of these communities can elect public officials who will safeguard the interests of the people rather than just the investors who line their pockets, they can enact legislation that caps the number of properties that are allowed to be short-term rented or the number of nights any individual property can be rented out in a given year. They can also levy significant taxes for short-term rentals or dramatically increase fees that have the benefit of both putting those dollars back into the community as well disincentivizing buying properties solely for the purpose of investment. After all, how good is it to go visit a place that no longer has workers to serve you? Instead these communities need to start thinking about the long-term benefits of creating a livable community that tourists will want to come visit for years to come rather than being lured by the short-term dollars of short-term rentals.
Steven Craig is the author of the best-selling novel WAITING FOR TODAY, as well as numerous published poems, short stories, and dramatic works. Read his blog TRUTH: In 1000 Words or Less every THURSDAY at www.waitingfortoday.com