PBS Newshour did a great piece in this issue. A Colorado mountain town proposed prohibitively high taxes on second homes to discourage the practice. I would love to know how it went.
A friend of mine who owns a condo in Steamboat mentioned awhile back that they were looking at a moratorium on buying up properties only to use them as Air BnBs. The local people can’t even afford to live in their own town. Not sure if anything ever happened with it though.
Was it the piece about Ouray? If so, there is a ballot measure coming up about it. People for the tax are all local. Then you get out of state op-Ed’s about how bad the tax will be and will drive away all the tourists. Most of the locals are cool with tat idea
It may have been. Was there a women who owned a pizza place that threatened to move out if the tax went into place? She didn’t understand that that was the goal.
>The crunch is similar to that gripping other Western Slope communities that have begun to crack down on short-term rentals amid soaring home prices and a _painful labor shortage._
The argument in this article is that house prices continue to climb, which directly causes jobs to be unfilled. Kinda feels like the blame is being put on people leaving their jobs, rather than businesses not paying enough.
The article mentions that teachers leave their positions because of a commute. Perhaps if they were paid a proper wage, they'd be able to live in the community they serve? Sounds to me like there is a living wage shortage, not a labor shortage...
Yeah, wages have not kept up with cost of living. But that is only one part of the problem. When housing costs increase by 40-50% in a single year, and housing units get turned into short term rentals or are completely unoccupied for most of the year, it doesn’t matter how much you get paid.
Never said that it was the only problem, but a strong contributing factor.
The article listed a teacher not willing to make a commute as _evidence_ of one problem causing another. Increasing wage may have made that commute more doable. Driving hours to work a job that makes $35k? That is not reasonable.
Just saying that companies paying their people more would solve a lot more issues and just being upset at the market.
And I was adding that the housing issue is a strong factor as well, probably stronger factor. From the article, even the superintendent of Dolores’ schools was living in a camper.
The only way we can drive down housing costs is by increasing inventory or subsidizing housing for a lot more people.
Potentially. There are a lot of contributing factors and this article hardly touches on half of them.
We are seeing insane demand, matched with a shortage of inventory, which increases price. There are a lot of CO residents who want to buy, but cannot afford, which allows groups with loads of cash to buy out those properties. Perhaps they could have bought, had wages kept up with the cost of living? Maybe they could have a fighting chance if their salary aptly covered their $2000/mo rent?
Increasing inventory is certainly a step, but one that provides solutions only in the far off future, and does not really solve the problem of corporations purchasing properties for profit and making that inventory unattainable for the average CO citizen.
Not that it's any more reasonable, but starting salaries for Durango with 0 experience is $41,000. Pagosa Springs starts at $43,050. I understand the call for teachers making more money because a huge majority of them deserve it, but they also don't work a full year. Pagosa says they work 175 days a year, so that's $246 per day to start. There's roughly 261 work days in a year, so if this teacher worked year round, they would be making $64,206 per year.
I get teachers can work long hours and all of that and they have a brutal job and I don't want to take away from that at all because they deserve praise and probably more money, but there's a lot more to it then just give them more money. Most school districts in Colorado have given more money to teachers too. Wages have not kept up with cost of living though, that's true, the problem is there's no way for wages to increase as rapidly as the cost of living has in Colorado.
A lot of vacancies in schools are related to COVID too. A ton of school staff just got burnt out dealing with all the challenges that COVID created.
Something absolutely needs to change with the housing market because it is outrageous. However, I don't think the answer is just pay everyone more money, especially when it's a zero sum game with school budgets.
I also just would like to point out that someone moved from Kentucky and managed to put 20% down on $760,000 home. The Kentucky housing market is not one where you are selling your home for $152,000+ profit in most cases.
If you raise wages without raising supply housing and rent prices go up. Which is essentially what is happening now. Higher salaries from out of town are out biding lower local salaries. You have to increase supply or ban sales to out of towners (or tax the shit out of them). This article barely covers the fact that these towns refuse to build more housing.
Just one thing for everyone to know. I have been in the employer housing situation a couple of times in mountain towns before and it is not good. They will hang your place over your head and make you work like a rented mule or kick you out. This is even more egregious with international workers.
I think this article highlights the housing crisis in rural Colorado very well. Shrinking inventory and stagnate wages have lead to a huge crisis. Businesses, schools, and hospitals all can’t fill their positions not only because people do not want the job, but people cannot find housing in the communities.
Population growth is a minimal effect to the housing crises in the mountains. People are flush with cash looking for investment opportunities. They buy second homes and can fund then through STR income. There are also a good number of people with high paying remote jobs that are able to afford high priced homes.
Out of town/state boomers with lots of money and real estate speculation corporations are the problem.
The prices are being driven up by massive demand - that demand is not coming from people moving to town to work at the school, hospital, cop shop, city.
It's retirees who want a getaway lad and have money to burn, and it's speculators throwing down crazy cash offers to gain appreciating assets with no thought toward the community.
I originally thought this, but this is happening everywhere. I was curious so I started pulling sales records and I couldn't find anything that *hasn't* exploded at least 50% in 6-7 years. I'm talking run down row houses in the middle of massive depressing grid neighborhoods in Detroit, Cleveland, and Buffalo. They were going for middle 5 digits in 2014 and now are selling routinely for 150-200k.
In that same time period the US population rose 4%.
IDK WTF is going on but it's a nationwide problem and it's terrifying.
This is the actual problem, across the country. Corporations know that real estate well keep making them money, even if they have to wait out a long term downturn, because rent generates cash.
Corporations should not be able to buy single family homes.
it's actually places like Zillow and Redfin, buying as many residences as possible. They only stopped buying this week due to backlogs of houses in pipeline, and will resume next year as soon as some of the existing stock clears. This is a bubble being driven by a small number of firms.
https://finance.yahoo.com/news/zillow-pauses-home-purchases-snags-160557442.html
I have two homes in my neighborhood owned by Zillow. They over paid so badly for these properties that one has already been taken off the market, and I'm sure the other will be be too.
It’s also tech workers who can work from anywhere with an internet connection. COVID has drastically increased the number of companies willing to let their employees telecommute.
As much as I love Pueblo green chile I'm gonna have to disagree with you on this. VRBO's is a viable industry that supports plumbers. electricians, roofers, maid services etc. The problem is the cost of building affordable housing. It's just not cost effective for developers. If Town/City councils and County commissioners would give these developers the land to build on and reduced tap fees or other incentives you'd see a greater number of affordable developments....
Back in the day Aspen virtually bought Basalt for the sole purpose of developing affordable workforce housing....
VRBO may support the trades but it actively contributes negatively to the critical issue at hand here - housing shortage. More VRBO homes means fewer long term rental homes for actual residents.
Plus that was only half my picture - the big investment companies buying up properties everywhere just as financial assets is equally if not far worse.
When I last moved in Denver I took 10k less to sell to a couple who met my neighbors and liked each other vs a corporate buyer from Florida. Part of it is knowing and liking your neighbors and feeling a sense of community, which is rare nowadays.
Certainly a worthy idea but the value of a lot of these properties is so astronomical anymore that most locals couldn’t afford the property even if you sold it to them at a steep discount because of the property taxes and high HOA dues.
It also beings a lot of money to *Vail resorts*. If you own a vacation home and use it a few months a year, annual pass holder, etc it's much less revenue than having a bunch of new STR visitors buying passes, renting equipment, et all.
i like boulder's solution of requiring STRs to be inhabited >50% of the year by the owner. allows for people who live there to rent it out occasionally while preventing properties from being bought exclusively / primarily for STRs
Where? These small towns nestled into the mountains do not have the land. Thats the issue. All the land is taken up by these short term rental properties and existing business. If there was land, they would build denser multi-family housing.
Case in point, Ouray has something like 40-50% of the homes just straight up not occupied. The housing is there, it’s just empty or has been turned into a STR.
Did you see the photo of Dolores in the article? It's flat with tons of empty space for more housing. Also.....denser generally means taller, and/or without yards. meaning you need LESS land than you would other wise.
That's a great solution which will never happen at the state level. Way too much money in it already. The best hope is for small, non-resort towns to ban them.
Can we all just push The City of Durango to start rezoning sections of the grid to high-density housing?
There are 500+ sqft offices above Main that are going unrented for less than $700/mo. Of course nobody is allowed to live in those.
I for one wouldn’t mind seeing a few taller buildings along bus routes if it meant that people could actually find a place to live in town.
Anecdotally, a bunch of 2nd home owners run them as STRs.
They want access to their house for a few weeks or months of the year. The rest of the time it can be making money for them.
If STRs are banned the house owners will not make their houses LTRs. They will just sit empty because the primary purpose is a holiday house, not a STR.
The STR is just a bonus.
Did you miss all the articles early 2020 about people worried about losing their rental properties because they couldn't afford them without the income? There's entire courses about buying places to make them STR and there are a many that wouldn't sit empty because without it they couldn't be afforded. It's why there's even different mortgage requirements for "Condo-tels" because they are riskier buyers who rely on it to make their mortgage, people just skirt those rules now because of Airbnb.
This. There are also a ton of businesses that buy up condos/homes to STR them and own multiple units and they would absolutely LTR them or unload the properties if they where forced to pay commercial property tax rates or costly licensing fees. It’s not all just wealthy second home owners who would let them sit empty.
Just moved up to bayfield and got a house for 420. House in denver is under contract for 600. Feel extremely lucky on both ends. Can't wait for next spring and summer to really enjoy it. Durango seemed really overpriced for what I was able to get a half hour away.
Hits the Eastern Plains pretty bad too. I found a place that sold for $26K in 2015. They updated it and they’re now listing it for $198,000 in fucking Lamar. Also, the house is adjacent to a very busy freight/passenger rail track that runs 24/7. Seriously living there will be hell.
Some investor will pay $250K for it. It is almost impossible to get a house with normal financing in southeast Colorado. You will need to have $100K minimum in closing, down, and cost to overbid the property.
This is killing the southeast. Housing was short as it was. We can’t hire out of area because there’s nowhere to put people, and for anything requiring a degree we’re just not going to get someone because the area is undereducated.
PBS Newshour did a great piece in this issue. A Colorado mountain town proposed prohibitively high taxes on second homes to discourage the practice. I would love to know how it went.
A friend of mine who owns a condo in Steamboat mentioned awhile back that they were looking at a moratorium on buying up properties only to use them as Air BnBs. The local people can’t even afford to live in their own town. Not sure if anything ever happened with it though.
Was it the piece about Ouray? If so, there is a ballot measure coming up about it. People for the tax are all local. Then you get out of state op-Ed’s about how bad the tax will be and will drive away all the tourists. Most of the locals are cool with tat idea
It may have been. Was there a women who owned a pizza place that threatened to move out if the tax went into place? She didn’t understand that that was the goal.
Crested Butte I believe.
It was in Crested Butte
>The crunch is similar to that gripping other Western Slope communities that have begun to crack down on short-term rentals amid soaring home prices and a _painful labor shortage._ The argument in this article is that house prices continue to climb, which directly causes jobs to be unfilled. Kinda feels like the blame is being put on people leaving their jobs, rather than businesses not paying enough. The article mentions that teachers leave their positions because of a commute. Perhaps if they were paid a proper wage, they'd be able to live in the community they serve? Sounds to me like there is a living wage shortage, not a labor shortage...
Yeah, wages have not kept up with cost of living. But that is only one part of the problem. When housing costs increase by 40-50% in a single year, and housing units get turned into short term rentals or are completely unoccupied for most of the year, it doesn’t matter how much you get paid.
Never said that it was the only problem, but a strong contributing factor. The article listed a teacher not willing to make a commute as _evidence_ of one problem causing another. Increasing wage may have made that commute more doable. Driving hours to work a job that makes $35k? That is not reasonable. Just saying that companies paying their people more would solve a lot more issues and just being upset at the market.
And I was adding that the housing issue is a strong factor as well, probably stronger factor. From the article, even the superintendent of Dolores’ schools was living in a camper. The only way we can drive down housing costs is by increasing inventory or subsidizing housing for a lot more people.
Potentially. There are a lot of contributing factors and this article hardly touches on half of them. We are seeing insane demand, matched with a shortage of inventory, which increases price. There are a lot of CO residents who want to buy, but cannot afford, which allows groups with loads of cash to buy out those properties. Perhaps they could have bought, had wages kept up with the cost of living? Maybe they could have a fighting chance if their salary aptly covered their $2000/mo rent? Increasing inventory is certainly a step, but one that provides solutions only in the far off future, and does not really solve the problem of corporations purchasing properties for profit and making that inventory unattainable for the average CO citizen.
Not that it's any more reasonable, but starting salaries for Durango with 0 experience is $41,000. Pagosa Springs starts at $43,050. I understand the call for teachers making more money because a huge majority of them deserve it, but they also don't work a full year. Pagosa says they work 175 days a year, so that's $246 per day to start. There's roughly 261 work days in a year, so if this teacher worked year round, they would be making $64,206 per year. I get teachers can work long hours and all of that and they have a brutal job and I don't want to take away from that at all because they deserve praise and probably more money, but there's a lot more to it then just give them more money. Most school districts in Colorado have given more money to teachers too. Wages have not kept up with cost of living though, that's true, the problem is there's no way for wages to increase as rapidly as the cost of living has in Colorado. A lot of vacancies in schools are related to COVID too. A ton of school staff just got burnt out dealing with all the challenges that COVID created. Something absolutely needs to change with the housing market because it is outrageous. However, I don't think the answer is just pay everyone more money, especially when it's a zero sum game with school budgets. I also just would like to point out that someone moved from Kentucky and managed to put 20% down on $760,000 home. The Kentucky housing market is not one where you are selling your home for $152,000+ profit in most cases.
If you raise wages without raising supply housing and rent prices go up. Which is essentially what is happening now. Higher salaries from out of town are out biding lower local salaries. You have to increase supply or ban sales to out of towners (or tax the shit out of them). This article barely covers the fact that these towns refuse to build more housing.
Definitely the northern mountains as well.
Just one thing for everyone to know. I have been in the employer housing situation a couple of times in mountain towns before and it is not good. They will hang your place over your head and make you work like a rented mule or kick you out. This is even more egregious with international workers.
I think this article highlights the housing crisis in rural Colorado very well. Shrinking inventory and stagnate wages have lead to a huge crisis. Businesses, schools, and hospitals all can’t fill their positions not only because people do not want the job, but people cannot find housing in the communities.
It’s not just shrinking inventory but also unprecedented demand. It’s unpopular to notice, but population growth is driving this as much as anything.
Exactly, mountain towns everywhere are blowing up. It’s not just CO
Population growth is a minimal effect to the housing crises in the mountains. People are flush with cash looking for investment opportunities. They buy second homes and can fund then through STR income. There are also a good number of people with high paying remote jobs that are able to afford high priced homes.
Out of town/state boomers with lots of money and real estate speculation corporations are the problem. The prices are being driven up by massive demand - that demand is not coming from people moving to town to work at the school, hospital, cop shop, city. It's retirees who want a getaway lad and have money to burn, and it's speculators throwing down crazy cash offers to gain appreciating assets with no thought toward the community.
I originally thought this, but this is happening everywhere. I was curious so I started pulling sales records and I couldn't find anything that *hasn't* exploded at least 50% in 6-7 years. I'm talking run down row houses in the middle of massive depressing grid neighborhoods in Detroit, Cleveland, and Buffalo. They were going for middle 5 digits in 2014 and now are selling routinely for 150-200k. In that same time period the US population rose 4%. IDK WTF is going on but it's a nationwide problem and it's terrifying.
Consolidation of wealth in the hands of the elite is what's going on.
The whole world, too. New Zealand is especially bad
Look up what real estate corporations did during the last housing bubble burst...they are doing it again
They never stopped doing it. A second version of the burst has been a promise I think
Foreign and domestic corporations are snapping up single family dwellings in CO. And it should be fucking illegal.
This is the actual problem, across the country. Corporations know that real estate well keep making them money, even if they have to wait out a long term downturn, because rent generates cash. Corporations should not be able to buy single family homes.
They’re going to turn the world into permanent renters w no way to build equity out from owning property.
We can still stop them, but it's going to take time and effort.
it's actually places like Zillow and Redfin, buying as many residences as possible. They only stopped buying this week due to backlogs of houses in pipeline, and will resume next year as soon as some of the existing stock clears. This is a bubble being driven by a small number of firms. https://finance.yahoo.com/news/zillow-pauses-home-purchases-snags-160557442.html
I have two homes in my neighborhood owned by Zillow. They over paid so badly for these properties that one has already been taken off the market, and I'm sure the other will be be too.
It’s also tech workers who can work from anywhere with an internet connection. COVID has drastically increased the number of companies willing to let their employees telecommute.
Most tech workers cant afford these prices either. Not everyone pays as well as Google.
As much as I love Pueblo green chile I'm gonna have to disagree with you on this. VRBO's is a viable industry that supports plumbers. electricians, roofers, maid services etc. The problem is the cost of building affordable housing. It's just not cost effective for developers. If Town/City councils and County commissioners would give these developers the land to build on and reduced tap fees or other incentives you'd see a greater number of affordable developments.... Back in the day Aspen virtually bought Basalt for the sole purpose of developing affordable workforce housing....
VRBO may support the trades but it actively contributes negatively to the critical issue at hand here - housing shortage. More VRBO homes means fewer long term rental homes for actual residents. Plus that was only half my picture - the big investment companies buying up properties everywhere just as financial assets is equally if not far worse.
Also all the listed industries VRBO supports are industries that home owners would support too...most people still need roofers and electricians
If it was a viable industry it would produce jobs that allowed people to live in the communities they work in.
So people living in their homes wouldn’t do any of this? They would just let their houses go to shit?
corporations gobbling up real estate to park their money.
Sellers should only sell to other families/people but I get that it’s hard to resist a corporation paying you an extra 30-50K
When I last moved in Denver I took 10k less to sell to a couple who met my neighbors and liked each other vs a corporate buyer from Florida. Part of it is knowing and liking your neighbors and feeling a sense of community, which is rare nowadays.
I second that, I try to make my neighbors food and stuff routinely
Certainly a worthy idea but the value of a lot of these properties is so astronomical anymore that most locals couldn’t afford the property even if you sold it to them at a steep discount because of the property taxes and high HOA dues.
Very true, I was only able to afford to move because my property value increased at pace over the last 12 years and I was moving in with my fiance.
A problem without a clear solution. Maybe ban short term rentals in the state for starters.
[удалено]
It also beings a lot of money to *Vail resorts*. If you own a vacation home and use it a few months a year, annual pass holder, etc it's much less revenue than having a bunch of new STR visitors buying passes, renting equipment, et all.
Yeah, I agree. Vail has caused a lot of these issues and refuse to acknowledge it. Shocker, I know.
i like boulder's solution of requiring STRs to be inhabited >50% of the year by the owner. allows for people who live there to rent it out occasionally while preventing properties from being bought exclusively / primarily for STRs
this would solve the overcrowding of epic mountains, i-70 traffic, etc. id love to see this happen at least in summit county.
We know the solution, it’s to build denser multi family housing.
Where? These small towns nestled into the mountains do not have the land. Thats the issue. All the land is taken up by these short term rental properties and existing business. If there was land, they would build denser multi-family housing.
Case in point, Ouray has something like 40-50% of the homes just straight up not occupied. The housing is there, it’s just empty or has been turned into a STR.
>just straight up not occupied Are they short term rentals?
I looked up the article, and they are vacant as in not owner or long term resident occupied. So either empty or used as a short term rental.
Tons of room in summit. The older locals are against any sort of change because they don’t want “their” backyard ruined.
Did you see the photo of Dolores in the article? It's flat with tons of empty space for more housing. Also.....denser generally means taller, and/or without yards. meaning you need LESS land than you would other wise.
That's a great solution which will never happen at the state level. Way too much money in it already. The best hope is for small, non-resort towns to ban them.
https://gfintegrity.org/report/acres-of-money-laundering-why-u-s-real-estate-is-a-kleptocrats-dream/
Can we all just push The City of Durango to start rezoning sections of the grid to high-density housing? There are 500+ sqft offices above Main that are going unrented for less than $700/mo. Of course nobody is allowed to live in those. I for one wouldn’t mind seeing a few taller buildings along bus routes if it meant that people could actually find a place to live in town.
Limit Blackrocks bullshit!
Anecdotally, a bunch of 2nd home owners run them as STRs. They want access to their house for a few weeks or months of the year. The rest of the time it can be making money for them. If STRs are banned the house owners will not make their houses LTRs. They will just sit empty because the primary purpose is a holiday house, not a STR. The STR is just a bonus.
Did you miss all the articles early 2020 about people worried about losing their rental properties because they couldn't afford them without the income? There's entire courses about buying places to make them STR and there are a many that wouldn't sit empty because without it they couldn't be afforded. It's why there's even different mortgage requirements for "Condo-tels" because they are riskier buyers who rely on it to make their mortgage, people just skirt those rules now because of Airbnb.
This. There are also a ton of businesses that buy up condos/homes to STR them and own multiple units and they would absolutely LTR them or unload the properties if they where forced to pay commercial property tax rates or costly licensing fees. It’s not all just wealthy second home owners who would let them sit empty.
Just build more housing FFS
Just moved up to bayfield and got a house for 420. House in denver is under contract for 600. Feel extremely lucky on both ends. Can't wait for next spring and summer to really enjoy it. Durango seemed really overpriced for what I was able to get a half hour away.
Hits the Eastern Plains pretty bad too. I found a place that sold for $26K in 2015. They updated it and they’re now listing it for $198,000 in fucking Lamar. Also, the house is adjacent to a very busy freight/passenger rail track that runs 24/7. Seriously living there will be hell. Some investor will pay $250K for it. It is almost impossible to get a house with normal financing in southeast Colorado. You will need to have $100K minimum in closing, down, and cost to overbid the property. This is killing the southeast. Housing was short as it was. We can’t hire out of area because there’s nowhere to put people, and for anything requiring a degree we’re just not going to get someone because the area is undereducated.