Affordable housing is the number one problem in the Wood River Valley, but there are some things that we cannot change. It is a highly desirable place to live surrounded by land we cannot develop, and building luxury condos will always be more profitable than housing local labor.
Other things we can change. What is the lowest fruit in our housing crisis? Crackdown on short-term rentals.
An important distinction: It is one thing that hosts rent out their primary residence in high season, it does not detract from the available housing stock and does not concern me. It’s another to own a portfolio of Airbnbs, occupying units that could otherwise be used to house premises.
Short-term rentals, or STRs, occupy the building stock. More than 1,000 units are actively leased to Ketchum and Sun Valley on Airbnb and VRBO, according to AirDNA, a market research platform for STR investors. Four hundred and thirty-four of these units are full time rentals (or available more than 180 days per year).
DOS drives up house prices and rents. According to several studies in other cities, short-term rentals have increased rents and house prices. There’s a reason so many cities (Chicago, San Francisco, Santa Monica, even Sandpoint, Idaho) have instituted quotas, high taxes, and requirements that hosts are the primary residents of the unit.
DOSs are not taxed enough. Ketchum only taxes DOS at 4%. That’s less than Sandpoint, McCall, and equal to Hailey. But even increasing the tax to 25% will not solve the problem; it’s still more profitable than long-term rental. The median return on STRs is $ 3,500 per month, according to AirDNA.
STRs are a very lucrative business and investors have taken notice. Among the rentals available on Airbnb, how many hosts have multiple lodgings? How many have 10 or 20? I’ve seen hosts with 10 or 20 units, all two to three bedroom condos, places where working class people lived. How many web hosts are actually investment companies with hundreds of rentals in other resort towns?
Ketchum needs to step up his surveillance. After calling the town of Ketchum, they were unable to tell me how many STR businesses are registered with the city, how many units these businesses own, or how much tax revenue the city collects on STRs. It should all be public information. How can we be sure the Town of Ketchum knows about the problem when they don’t know the extent of the problem? How can we be sure that they are even doing the essentials, like collecting the taxes owed to the city on STRs? Ketchum has the power to get those answers, but if they don’t ask the questions, they don’t have to think that’s a problem.
STRs eat away at housing stock, drive up rents, drive up house prices, and the only ones benefiting are investors and tourists. Meanwhile, we are struggling to find nurses, restaurant workers, firefighters, teachers, retail staff, and all the other people who ensure a functioning community.
Why can’t I find the words “Airbnb”, “VRBO” or “short term rentals” on Mayor Neil Bradshaw’s re-election website?