Our View: When will the Vail Valley rental market hit a tipping point? (editorial)
December 4, 2018
The Eagle County Classifieds page on Facebook can be highly educational for a lot of reasons.
People are buying and selling, of course, but there are also some lively discussions. Some of the most lively involve housing, particularly when someone posts a unit for rent. When rentals are posted — from studios to lock-off units to homes — the most common reaction is: "This costs how much?"
Housing has always been expensive in our valley. It's the product of high demand and tight supply. But another element has been added to the traditional free-market tug-of-war in the past few years: additional uses.
With the advent of rent-by-owner websites including Airbnb, a number of owners of rental units see a chance to make far more by going into the short-term rental market.
The kind of Wild West environment created by online rental sites may be moderating. Local governments are increasingly regulating the business, and some owners are finding that the big-money promise of online rentals often comes with profit-eating complications.
But for right now, it seems like short-term rentals are eating up inventory, and always-in-demand long-term rentals are carving out increasingly larger portions of local workers' paychecks.
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It's always been hard to make rent on a service-worker's pay, but the situation seems worse this winter. It looks like $1,000 per month is a common price for one bedroom in a place. If you're making $12 an hour, there isn't much left to your paycheck after tax withholding, health insurance (if you can afford it), car and renter's insurance, cellphone service and an internet connection (again, if you can afford it) come off the top.
Those bills leave precious little left over for fun. Or groceries. That's why the Salvation Army goes through so much food every month.
There aren't many good answers to this old problem. A lot of businesses operate on thin profit margins. Many can't afford to raise pay to match the cost of housing.
Building more units is part of a solution, but the units planned or under construction are more likely to moderate the pace of rent increases than they are to actually bring rents down.
Supply and demand will always be with us, but that dance is becoming increasingly complicated. Unfortunately, the alternatives involve a serious economic downturn, and nobody wants to see that.
The Vail Daily Editorial Board is Publisher Mark Wurzer, Editor Krista Driscoll, Assistant Editor Ross Leonhart and Business Editor Scott Miller.
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