STVR/Airbnb Has Destroyed America's Resort Towns

Posted by freedomforall 10 months, 3 weeks ago to Economics
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"Airbnb has devastated Colorado's resort towns.

It's always been expensive to live in places that wealthy people decided they wanted to visit regularly.

Real estate speculators figure out where the money is quickly enough, buy up property, subdivide it and sell lots to their friends, who build second homes, like the single family castles in Beaver Creek and Vail. They build condos and duplexes and sell them to less wealthy folks who want to live in these places and to small investors who rent them to the people who do the actual work in these communities; our teachers, police and fire fighters, hotel and restaurant and small business operators and their staff, the 'essential services' folks that nobody thinks much about until one day, a pandemic comes along.

In Colorado, the attraction for the past 50 years has been downhill skiing and while rents always were higher than most places, the folks that moved up to the mountains and worked at the skico and surrounding small businesses generally skied for free - a season pass was a more common benefit than a healthcare plan - and the 'locals' lived to ride. Snowboards. Skis. It was a worthwhile trade off.

That era ended completely with AirBnb.

Over the past few years virtually all of the 'locals' housing in Vail, the duplexes in nearby Eagle Vail, the houses in Edwards - everything in the upper Eagle River Valley where locals lived - has been purchased - often sight unseen - by hedge funds, private capital and wealthy full and part time homeowners. It has all immediately been turned into short term rental properties (STVRs) - Airbnb, VRBO, etc.

Why rent a two bedroom apartment to a teacher for $1,500 a month when you can Airbnb the same 40 year old unit for $2,500 a week?

Except now, there are literally no housing units available.

Ok, a few pop up now and then but for $3,750 to $4,000 a month, since the work at home class has bid up the price of everything in resort towns with fast internet, and all of them have it. Even if they don't, Starlink is $120 a month for 50-200 MBPS connectivity. (I have it, it's flawless.)

Local teachers with masters degrees start at $45,000 a year, fresh out of school.

A $3,750 per month rental requires about $11,000 to move in, first and last plus the security deposit. The annual rent comes to $45,000. Thats the gross pay for new hires, which we need annually as our experienced educators retire, or sell their homes they bought a few years ago for huge gains and move elsewhere.

We can't hire teachers.

We can't hire snow plow operators, who are sort of essential in the high country.

Can't hire substitute teachers at $100 a day.

Can't hire bus drivers.

Nobody making under $250,000 can buy a house and live here anymore."
Is this the beginning of the elite finally realizing that when support businesses become slaves there will be no support for the elite?

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  • Posted by $ BobCat 10 months, 3 weeks ago
    The playground for the elites, and the elites will also own the shanties on the other side of the tracks. The elites will hire their necessary serfs and charge then 90% of their pay for lodging in shanty town.
    I think we have seen this picture repeated before throughout history...
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  • Posted by $ CBJ 10 months, 3 weeks ago
    Not all rich people that populate resort towns are bad, nor is it evil to maximize the value of residential properties by leasing them to short-term renters. And America’s resort towns have not been “destroyed”, they are simply being forced to accommodate disruptive changes in the marketplace, which is a necessary component of economic progress. What’s the alternative, using the coercive power of government to forbid short-term rentals?
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    • Posted by 10 months, 3 weeks ago
      Certainly agree that the problem isn't just rich people, and the article isn't criticizing individual rich people.
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      • Posted by $ CBJ 10 months, 3 weeks ago
        The article appears to be criticizing rich people in general, along with the way they put their property to use. A few choice quotes:

        "The rich, buoyed by inherited wealth and access to credit, find a locale with the qualities they desire, and buy the choicest properties for their own use, and a surrounding band of nearby properties so they won't be bothered by the bottom 99%."

        "The uber-wealthy don't need more money but they're trained, like hamsters in a lab, to seek ways to maximize their income and capital gains. STVRs--Airbnb et al.--are highly attractive investments to the wealthy and their money-managers--the hedge funds, private equity managers, family-wealth advisors, et al."

        This strikes me as quite a bit of contempt for rich people in general.
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