Colorado mountain town leaders tee off on Airbnb study touting benefits of short-term rentals
Letter signed by 15 commissioners: 'Facts appear selected to craft a story that is not entirely true'
As the housing crisis worsens in Colorado mountain communities, many are taking matters into their own hands through various mechanisms — be it building housing, forging partnerships and more. And recently, one mechanism has begun to rise in popularity — regulating short-term rentals.
In Eagle County, both the towns of Vail and Avon are currently considering their own short-term rental ordinances to increase regulation of these units in an effort to decrease their impact on long-term housing inventory.
In response to these regulations, and many others like it across Colorado’s Western Slope, vacation rental platform Airbnb released a short-term rental impact study at the end of May. The study was commissioned by the platform as a way to study the economic impacts of short-term rentals on Summit, Grand, Eagle, Pitkin and Routt counties.
Perhaps unsurprisingly, at a high level, the report touted the sheer number of tourism dollars spent in these counties as well as the jobs generated by this short-term rental spending. It found that in 2020, across these five counties, there were 5.2 million visitors — 30% of whom were short-term rental visitors that spent $1 billion and supported 14,700 jobs for a total of $599 million in wages.
Of the 5.2 million visitors, nearly 1.5 million were visiting Eagle County, with 12% representing short-term rental visitors, the report stated. It also reported that of the nearly 35,000 jobs in Eagle County, less than 50% were related to tourism.
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However, these findings, which bolster the benefits of short-term rentals to these counties’ economies, have recently come under fire from commissioners from the five counties as well as the Colorado Association of Ski Towns (of which both Vail and Avon are members).
A recent letter signed by 15 commissioners — including Eagle County commissioners Jeanne McQueeney, Kathy Chandler-Henry and Matt Scherr — and the president of the Colorado Association of Ski Towns, Dara MacDonald, acknowledged these benefits but criticized the report as it “inaccurately denied any associated costs of the industry.”
“Airbnb narrowly focused on positive impacts, and facts appear selected to craft a story that is not entirely true, especially when it comes to negative impacts created by the STR industry,” the letter read. “Our communities are experiencing an acute housing crisis of unprecedented magnitude. Our workforce is unable to find housing at any price, much less a price they can afford.”
The Airbnb report does address workforce housing and housing inventory in the five counties, evaluating both the overall housing market and the impact of short-term rentals on workforce housing inventory.
According to the report, there were 111,300 housing units in 2019 across the five counties versus 51,700 households, creating a surplus of 59,500 housing units — with 59% of the surplus units being located In Eagle and Summit Counties. Eagle County, the report said, had the largest number of housing units at 32,500 with 44% surplus of housing, “given its larger permanent resident population.”
Additional data from the report on the housing inventory showed that while overall job growth in the five counties grew by about 17%, the housing inventory only grew about 8% between 2010 and 2019. Not only that, but the report stated that 44% of units across the five counties were vacant — 82% of which were vacant for seasonal, recreational and occasional use. The total number of unoccupied units totaled 59,500, close to the 49,200 units listed on short-term rental platforms as of 2021.
“Since the number of unoccupied housing units has not increased, this suggests that housing is used as year-round housing is not being converted to STRs at a high rate,” the report summary reads. “Rather, housing that has always been used as seasonal housing is being used as STRs.”
The Airbnb report goes on to evaluate this relationship of short-term rentals to the availability of workforce housing — using the Urban Land Institute definition that qualifies this as housing that is affordable to households making between 60% and 120% of the Area Median Income. Using this, it concluded that there was a deficit of affordable units, seen most acutely in Eagle County.
Across the five counties, the report found that there was a 3,000-unit deficit of affordable units, 42% of which was in Eagle County. In Eagle County, it said there was a deficit of 1,260 units. Further, the report compares the short-term rental inventory to workforce housing and concluded that only 3% of the short-term rental properties would be suitable for workforce housing. In Eagle County, the report found that only 117 short-term rental units were suitable for workforce housing.
While the commissioners’ and Colorado Association of Ski Town’s letter acknowledges that “the pressures on the housing market are not entirely due to STRs,” it holds that “it is misleading to claim that there is no relationship.”
The letter claims that the conclusion that only 3% of short-term rental units are suitable to convert to workforce housing is based on Airbnb cherry-picking its data and creating a narrow set of criteria for short-term rentals that are comparable to workforce housing. The conclusion ignores “several important facts,” the letter states.
Some of these facts include that service workers rarely rent on a single income; that the opportunity for a high return-on-investment due to short-term rentals drives investment buying and increases home prices; by using rental data from 2019, the report doesn’t reflect the conditions that have “changed dramatically during the past three years;” that the report fails to address the relationship between job increases and increased competition for housing resources; and more.
“Airbnb did exactly what they set out to do, which was to provide a report to demonstrate their positive impact. We should be skeptical when considering what this report does and does not tell us,” the letter states. “Each of our communities has a housing needs assessment. Most of these assessments directly contradict the claims of Airbnb regarding workforce housing.”
The town of Vail recently did its own study of short-term rental activity in the town. RRC Associates and Economic and Planning Systems conducted the study. The results of the study included that 31% of Vail’s residential units are short-term rentals; that 69% of the town’s housing stock is used for seasonal, recreational or occasional use; and that between 2010 and 2019 the town saw a decline of 162 long-term rental units.
In addressing the relationship between short-term rentals and the lack of long-term housing stock in Vail, George Ruther, Vail’s housing department director, said that the report showed that “STRs are not having the same degree of impact on the availability of housing for locals in Vail that has been demonstrated in other resort communities.”
“There is an impact, just not nearly as significant as originally believed,” he said to the Vail Daily. “The impact that is more likely affecting the Vail community is the impacts STRs are having on the creation of new jobs. Those newly-created jobs require more workers and we all know workers require housing.”
As identified in the letter from local commissioners and the Colorado Association of Ski Towns, each community has its own needs when it comes to housing and, as such, needs its own assessment and solutions.
In its study, Airbnb concluded that the two primary ways to meet “the housing needs of the workforce in these markets,” included building rental housing and subsidizing rental conversions.
The letter criticized this conclusion, stating that it fails to mention the work these communities have already done in this regard and also offers no suggestions as to where the additional revenue to make such subsidies should come from.
“This recommendation is especially ironic considering that STRs are classified as residential property in Colorado and pay one-quarter of the property tax rate of a hotel (which is classified as commercial), although they are engaged in the same activity,” the letter reads.
“As local elected leaders across resort communities in Colorado, we urge Airbnb to work in partnership with us by acknowledging both the positive economic impacts and the negative community impacts their industry creates and to be partners in identifying opportunities to address these issues creatively,” it concludes.
To regulate or not to regulate
Of course, one additional solution being considered by many of these communities is short-term rental regulations, including locally in both Avon and Vail.
In Avon, for the last several months, the Town Council has been considering several mechanisms for regulating and managing the growth of short-term rentals in the town.
The considered mechanisms have included increasing and creating a tiered system of short-term rental license fees; creating ways to manage and better regulate safety concerns in these units; implementing a moratorium or a cap on allowed short-term rental licenses; modifying its short-term rental overlay district and more.
The idea, according to a recently crafted mission statement by the town, is to “reduce or minimize the rate of conversion of long term residential use to short term residential rentals and to preserve existing residential housing stock that is appropriate for long term residential use.”
Within this mission, the town is seeking to continue the allowance of resident-occupied short-term rentals as they serve as an affordable housing mechanism of its own as it allows locals to afford rising rents and mortgage payments.
While the mission of the council and the town is clear, determining which mechanisms achieve this goal has proved more challenging.
“It’s an extremely difficult issue and we know a lot of communities have looked at it. All of you are recognizing that regulating short-term rentals isn’t a silver bullet in housing,” said Town Manager Eric Heil.
Heil continued that in addition to considering these regulations, the town needs to continue its work on other affordable housing projects.
“I think what’s going to help the most is going to be focusing on building new units that prices them and meets AMI levels,” he said.
The town will have a first reading of an ordinance regarding its ordinance to change the license and fee structure at its June 28 Council meeting. Council members on Tuesday also directed staff to defer some questions to the town’s Planning and Zoning Commission, including potential license caps and saturation rates, zoning changes and more.
At the same time, the town of Vail is considering its own changes. In May, the Town Council approved the first reading of a short-term rental ordinance that considers several regulatory changes. This included increasing licensing fees, adding a commercial insurance requirement, adding a requirement for fire department inspections, and increasing fines for violations of short-term licenses.
“The primary concerns addressed (in the ordinance) are enhancing life-safety standards and complaint enforcement to protect local residents and visitors. The ordinance as drafted also increases licensing fees to cover administrative costs incurred by the town,” said Alex Jakubiec, the town’s Revenue Manager. The ordinance was introduced to update its existing regulations based on community feedback.
Jakubiec added that the town sees the impact of short-term rentals on the local housing crisis as two-fold: “One is by directly reducing the amount of long-term housing available, and the second is by increasing the demand for housing for the workers needed to support STR tourist activity in our community.”
At its June 7 meeting, the Vail Town Council held a public hearing for the second reading of this ordinance and ended up continuing the matter to its June 21 Council meeting. This continuation was moved as council members requested information on whether it could revise its fee structure based on whether they were professionally managed.
“We can go back and take a look at the original fees that were proposed; part of the goal was just to make sure that we’re covering the costs of the work that goes into it,” said Mayor Kim Langmaid at the June 7 meeting. “I think if we look at that tiered-fee structure again that will be helpful and just get some of the numbers in terms of how that would all add up in the end.”
For both towns, part of the reasoning behind adding regulations is to better collect data on the short-term rental inventory, so that they have a greater understanding of how they’re being used and their potential impacts on housing in the communities.
“We need to get more information and move forward with really understanding better our short-term rental housing licenses,” said Avon Town Council member Amy Phillips. “We need to also move forward with getting in place the rate structure and all of those types of things because I actually think that the data we will learn once we do the new license procedure. … I think that that will be very valuable.”
Overall, whether the regulation of short-term rentals is the perfect solution or not, Eagle County and its municipalities are trying various efforts to address workforce housing and only time will tell, which solutions have the biggest payout.