This story first appeared in The Outsider, the premium outdoor newsletter by Jason Blevins.
In it, he covers the industry from the inside out, plus the fun side of being outdoors in our beautiful state.
A group of 15 commissioners from seven mountain counties is blasting a recent study commissioned by short-term rental giant Airbnb that dismissed the idea that short-term rentals are eroding worker housing in Colorado’s high country.
“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,” reads a response from commissioners in Eagle, Grand, Gunnison, Pitkin, Routt, San Miguel and Summit counties to the recent report by Airbnb.
The economic impact report shows visitors renting short-term rentals in the high-country vacationlands making up almost one-third of all tourist traffic and spending $1 billion in 2020.
The study also disputes the widespread notion that short-term rentals are impacting workforce housing. Yes, it is hard to imagine a company like Airbnb, which counts tens of thousands of users in Colorado and submitted $25 million in tourist lodging taxes to Colorado municipalities in 2021, paying for a study that finds it culpable in the mountain-town housing crisis.
Many local communities in the mountains have identified growth in short-term rentals as a primary driver in the shortage of worker housing. Most every community has approved increased regulations, taxes and even caps on short-term rentals.
The June 14 letter from the 15 commissioners and other municipal members of the Colorado Association of Ski Towns admits the housing crisis is not entirely due to short-term rentals, “however it is misleading to claim there is no relationship.”
Short-term renting has exploded in the last three years in Colorado’s resort towns. Airbnb, which does not release town-specific statistics of rental activity, said the $25 million in Colorado lodging taxes it collected and distributed in 2021 was a 90% increase over 2020, which mirrors the company’s nationwide increase in tourist taxes it remitted for the year.
Summit County Commissioner Tamara Pogue called the study “a fairly standard piece of industry marketing.”
“I’m not sure that it will have much validity or relevance in terms of the conversation over STR regulations, and certainly not as it pertains to housing,” said Pogue, who has been critical of short-term rentals permeating her community’s neighborhoods that previously had been used by working locals. “It’s fairly obvious that the intent of the report is to further support a multi-million dollar industry.”
The Airbnb study counted 5.2 million visitors to the five high-country counties in 2020. Summit County saw 1.9 million visitors and Airbnb counted 54% off all overnight visitors staying in short-term rentals. Eagle County saw 1.5 million visitors with only 12% staying in short-term rental homes.
Visitors renting homes in Eagle, Grand, Pitkin, Routt and Summit counties paid homeowners about $600 million for their stays, with another $400 million going for food service, arts, entertainment, recreation and shops. Compared to hotel visitors, short-term renters spend less in restaurants and more at grocery stores. Airbnb guests spent more on arts, entertainment and recreation compared to hotel visitors.
The Airbnb report shows the $1 billion spent by short-term renters supports 14,700 jobs in the five counties, with workers earning $599 million.
All that spending by visitors renting homes (on all short-term platforms, not just Airbnb) instead of hotel rooms generated $74 million in state and local taxes in 2020, according to the Airbnb report, which amounts to 7% of all tourism taxes in the state. About 63% of that — $47 million — went to local governments in the form of lodging taxes and the state collected $27 million in sales taxes. Short-term rental visitors gave local governments in Summit County $16.5 million, Eagle County collected $13 million and Pitkin County harvested $13.7 million.
No one in Colorado’s high country really argues with the economic impact of short-term rentals. But there is opposition to Airbnb’s conclusion that “housing that is used as year-round housing is not being converted to STRs at a high rate. Rather, housing that has always been used as seasonal housing is being used as STRs.”
Pogue said it’s interesting to see Airbnb outline their business as an industry. She sees the report validating the notion that homes rented to visitors are commercial enterprises and maybe commercial taxes are appropriate for those properties. She also sees all those jobs supported by short-term rentals making the STR industry one of the largest employers in Colorado’s high country, “and some of our lowest wage employers.”
“Seems like as a point of policy we would want to consider some of the same policies we apply to our other large employers, like requiring them to build workforce housing as they’re building new tourism infrastructure,” she said.
The five resort-anchored counties have long had giant portions of their housing stock used as second-homes. The vacancy rate across all five counties was 44% in 2019, compared with 48% in 2010. The Airbnb report counts 53,100 homes that are vacant in the five counties and used for seasonal, recreational and occasional use. The company counted 49,200 homes listed on its short-term renting platforms in those counties.
And here’s the kicker in the Airbnb study: The company found only 1,500 of those STR homes — mostly apartments and only 3% of the total supply of STRs in those counties — that were viable for worker housing, with daily rates below $150 and not used by owners for at least half the month.
The commissioners argue this is “a very narrow set of criteria” for comparing short-term rentals with workforce housing and ignores that many service workers rent homes together, not on single incomes. The commissioners also argue that Airbnb’s use of data up to 2019 ignores the rapid changes in the last three years in the Colorado high country, where home prices have nearly doubled since 2019 and many buyers are paying with hopes of a return on their investment by renting to vacationers.
More than half of the 1,500 units identified by Airbnb as possible housing for workers were apartments in Summit County and 350 were in Grand County. Pitkin County had only 50 short-term rentals with what Airbnb saw as pricing and availability that makes them possible for worker housing.
And rental prices — like home prices — in those counties are exorbitant, with the median rental listing in Aspen at $22,500 a month. (Not a typo) In Eagle County, the median rental listing was $5,750 in February 2022, which is about $4,500 more than a worker in the service industry making 60% of the adjusted median income can afford.
“Given this extreme market pressure, even if lower-tier STRs were converted to long-term rentals, they are unlikely to be listed at a price that low- and moderate-income households can afford,” reads the Airbnb report, which concludes that local governments should built more rental housing — duh — and pay owners of those lower-tier STRs to rent to local workers.
Summit and Grand counties have been paying owners to rent to locals and those programs have been very popular. Eagle County just launched a similar program.
“Airbnb did exactly what they set out to do, which was to provide a report to demonstrate their positive impact,” the commissioners’ letter reads. “We should be skeptical when considering what this report does and does not tell us. Each of our communities has a housing needs assessment. Most of these assessments directly contradict the claims of Airbnb regarding workforce housing. We need giants like Airbnb to partner with us to manage this industry by being transparent and accountable rather than seeking to avoid responsibility as this report does.”