Letter: Tax short-term rentals as commercial properties
We have arrived at full panic mode over the housing “crisis” attended by the irrational behavior that goes along with it.
As Howard Leavitt recently pointed out, housing has been an issue as long as Vail’s been Vail, pointing to a number of factors that have recently exacerbated the situation, not the least of which is the post-pandemic “Zoom Boom.” As with all booms, this one will eventually blow itself out and things will settle into some sort of equilibrium.
However, aside from the post-pandemic boom, a major cause of our current housing shortage are online rental services such as VRBO and Airbnd. Providing a new tool for real estate speculation, the digital platforms have taken hundreds, if not thousands, of units out of the long-term rental pool.
If treated as the commercial endeavors they are, lenders would treat these properties with much less generous loan terms. Most importantly, they would be taxed as commercial properties at three times the residential property tax rate.
One way of alleviating the housing crisis is severely curtailing online short-term rentals, if not banning them outright. If having our neighborhoods wrecked by people who don’t care about them and subsidizing real estate speculation in an overheated market doesn’t inspire the political will for action, we should, at the very least, recognize that units that are rented more than 30 days per year are no longer residential but commercial properties, and tax them accordingly.
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We need to start looking at the VRBO problem and the associated housing crunch in a holistic fashion that takes a view to the future. Panic begets bad decision making.