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Puget Sound Housing Crisis - How Short Term Vacation Rentals Are Pricing Out Residents | Sound Listings

By Adeline Jazinski, Copyright © 2022, SoundListings.com

Short-term rentals have revolutionized the American housing market -- and also quickly decreased availability of long term housing for local residents at the same time.

Services such as Vacation Rental By Owner and Airbnb allow property owners to rent out their homes for periods of 30 days or less. Platforms like these have increased the number of available rooms for rent in an area, giving vacationers additional options when looking for a place to stay.

Short Term Rentals Are in Demand

For some, short-term rentals present a lucrative opportunity. Homeowners may choose to rent out their home for a few weeks a year, typically during prime vacation season, simply moving out temporarily to take advantage of peak rental rates. For others who own a second or third home in a vacation area, renting it out when they are not there is an easy way to make some extra cash. Still others invest in a house for the sole purpose of renting it out as a short-term rental.

For others, particularly local residents, short-term rentals are less of a boon and more of a burden. In many areas with a large number of short-term rentals, year-round neighbors complain of the influx of extra cars, late-night noise, and an overall change in the neighborhood dynamic. The character of the neighborhood changes when people treat houses like hotels instead of homes.

Available Housing Disappears

Short-term rentals also have a significant impact on the local housing market. In the Puget Sound, how many small towns in and around the Cascade Mountains would make great places to live? Go looking for a home though and what do you find? Yes -- out of reach prices for a suitable home in many cases.

When homeowners rent out a home for weeks at a time, they effectively take that home out of the standard housing market, since that home is no longer available for sale or as a year-round rental. The total number of houses available to long-term residents decreases as the number of short-term rentals increases.

Research shows that this is exactly what is happening right now in cities across America and abroad. One study published by the Social Science Research Network found that home-sharing networks such as Airbnb decrease the amount of long-term rental units, lead to an increase in the price of long-term rentals, and lead to an increase in the price of homes for sale.

Scenic Cities and Towns Pricing Out Local Service Workers, Causing Homelessness

This phenomenon can have a particularly drastic effect on scenic areas and vacation towns. Many property owners are turning their long-term rentals into short-term rentals because it is such a great financial opportunity for them. Unfortunately, an increase in the number of short-term rentals causes a housing crunch for the workers in resort areas, many of whom already have a hard time making ends meet in an expensive area. A lot of these residents that work in service and hospitality can find themselves living out of cars and or camping in the nearby wilderness.

There is a financial disparity between the people who keep vacation destinations running and the people vacationing there, but the housing crunch is making that disparity even greater. As mentioned, many resort workers struggle to find affordable housing, and some fail. Alex Borchevsky, who owns two restaurants in Moab, Utah, tells Utah Business that he estimates between 15 and 20 percent of his employees are either living in vans or camping. They simply cannot find a permanent residence. The housing crisis is exacerbated as more long-term rentals become short-term rentals.

Scenic Towns and Vacation Towns Across the U.S. Taking a Punch

Moab, a destination for hikers, bikers, and explorers, is just one example of a resort town with a housing shortage and really taking a punch.

For us, here we are in the State of Washington where we have dozens of scenic and vacation towns across the state -- is there anything we can do?

Ski Towns Can Have the Highest Priced Real Estate

Areas that are home to ski resorts face similar problems. For example, Curbed reports that roughly 80% of the homes in Vail, Colorado, are owned as second homes. Pushed out of Vail, many resort workers commute to Eagle, a town 30 miles away. Ski communities across the country report the same challenges.

Politicians, government officials, and community leaders should address these issues. They have an obligation to advocate for all their constituents, which means balancing the needs and desires of year-round residents, property owners, and the state as a whole. They must think about land use, development, affordability, and more. Resort communities lose their character if they become overdeveloped, but they also need workers to function, and those workers need a place to live.

Vacation Towns Across the U.S. Taking a Punch

Some leaders are thinking of fresh solutions to these housing problems. The Vail InDeed program seeks to restrict the deeds of some homes to local residents, preventing second-homeowners from buying them. The program hopes to restrict 1,000 homes by 2027. Salida and Aspen, Colorado, have both invested in developments consisting entirely of tiny homes that provide affordable housing for resort workers.

Some business owners have solutions of their own. Laura Borchevsky, Alex’s wife, suggests that business owners who can afford to do so should provide housing as part of the compensation packages they offer to employees. Along that line, resort owners in Telluride and Aspen have converted existing apartments or built new developments specifically for workers.

Washington State Can Learn from Colorado

Another approach to the housing shortage is to limit the number of licenses for short-term rentals and this has started happening to a certain extent.

Shelby Rongstad, mayor of Sandpoint, Idaho, and current gubernatorial candidate, instituted a short-term rental ordinance in Sandpoint in 2017. This ordinance limits the number of short-term rentals in residential areas to 35, although commercial areas can have more.

He argues that this solution works best for all parties: long-term residents do not have to put up with the hassle of having vacationers in their neighborhoods, while commercial areas with restaurants and shops can absorb their impact and increased spending.

Can We Give Priority to Primary Residence Buyers vs Vacation Home Buyers?

Regulations that help home buyers are another attractive option to help locals and resort workers find permanent homes. For example, programs could give priority to first-time home buyers or to people buying a home as a primary residence and not a vacation home. Many states, like Washington State and Idaho, have a variety of loan programs and other financial assistance geared toward first-time home buyers.
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