Short-term lodging cuts into long-term housing stock
By the numbers
250: Decline in Eagle County long-term rental units since 2008.
270: Units at Lake Creek Village apartments in Edwards.
113: Units in the new Lions Ridge Apartments in Vail.
239: Private rental units available in Vail for the weekend of June 3 for a party of two adults and two children. Source: VRBO.com.
EAGLE COUNTY — This may be the tightest winter in recent memory for long-term rental housing. An improving economy has driven demand, but supply is shrinking as more property owners decide to convert their units to short-term rentals.
The success of online rental sites including VRBO, AirBnB and HomeAway continues to lure property owners with the prospect of greater returns on their investment. As more units become the equivalent of lodging, there are fewer units available for valley residents. The trend has created an obvious, yet still difficult-to-define problem.
“It’s a problem, but we don’t know how big it is and we don’t know how to solve it,” Eagle County Housing Department Director Jill Klosterman said.
Finding specific numbers is hard — no one keeps a list of every rental unit in the county, and property owners can list and un-list their units on websites as often as they want. But the U.S. Census Bureau every year conducts its American Community Survey, which does track occupied rental and owned units. It’s not exact, but it does give at least a rough idea of the housing market in communities.
By the feds’ count, the drop in available units has been quick and steep. Klosterman said the 2013 survey showed roughly 6,100 rental units in the county. The 2014 survey put the count at just less than 5,900 units.
Since 2008, the rough count puts the loss at more than 250 units. That’s about the number of units at the Lake Creek Village apartments in Edwards. And that’s a lot.
On the other hand, the drop between 2013 and 2014 also includes the year that the eastern half of the Timber Ridge apartments in Vail were demolished. Those 104 units are being replaced by 113 units of new housing at the renamed Lion’s Ridge Apartments.
Still, there was a loss of more than 100 housing units in a year.
Are there options?
Klosterman said there aren’t any obvious solutions to the problem created by the surge of short-term rentals.
“We’ve talked to (people in) other areas, and we don’t see a clear path to solving the issue,” Klosterman said. “It gets tricky with property rights.”
Even if cities do regulate rental housing, it can be hard to catch violators.
Town of Vail Housing Director Alan Nazarro said the Vail Valley isn’t unique in losing long-term rentals to the short-term market.
“Cities like San Francisco and New York are having these issues,” Nazarro said, adding that any regulations can be almost impossible to enforce. “You have to have an army of inspectors,” he said.
Klosterman said Eagle County officials have noticed a few cases of owners doing short-term rentals at Miller Ranch, which carries price appreciation caps and other restrictions, including using the units for anything but a primary residence. Those residents have been notified and have complied with the rules, she said.
In other cases, neighbors will often report units that are being used as short-term rentals.
From neighbor to hotel
When Vail Resort Rentals owner Dale Bugby was a member of the Vail Town Council, he and other lodging managers proposed a series of regulations for short-term rentals. That package was eventually whittled down to a single issue — anyone who rents a unit more than 14 nights in a year is required to hold a town business license.
Bugby believes that short-term rentals can be controlled, at least to a degree, by zoning. The town of Avon prohibits short-term rentals in the Wildridge neighborhood and used zoning to do it.
“Every community has different zoning,” Bugby said. “You decide where to put a retail store, a hotel, a (bed and breakfast). Transient lodging doesn’t belong in residential neighborhoods.”
That’s where neighbors come in, he said.
“It comes down to neighbors having the ability to complain to the town,” Bugby said. “You do it just like we check building permits.”
But, Bugby said, Vail has made a good decision to allow short-term rentals in most areas.
But compliance remains a problem. At what point does sofa-surfing become a short-term rental. When does a weekend home turn into lodging?
Vail Racquet Club General Manager Matt Ivy lives in West Vail. One of his neighbors has turned a former long-term rental into a short-term.
“From a neighborhood perspective, it feels like we’ve lost neighbors and gained a hotel,” Ivy said.
The Racquet Club is a condo complex, with a mix owners living in their units, as well as long-term and short-term rentals. Many of the short-term rentals are handled by the Racquet Club, but Ivy said some of the units are now being self-managed by owners who rent their units through one of the online services.
The short-term units serve a purpose, of course. As tourist demand rises for peak-period lodging, the Internet gives visitors options they haven’t had before.
On the other hand, losing former long-term units affects local employers’ ability to recruit, hire and retain people.
“It’s a real trade-off,” Ivy said. “There’s more paying customers, but people can’t live here. At what point have we oversold ourselves?”
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, email@example.com or @scottnmiller.