An article on financial news website Business Insider – and the accompanying viral tweet – drew attention to the effects of Airbnbs on Vermont’s extremely thin rental market.
The article profiles a “millennial couple” from Connecticut who created an “Airbnb empire” by buying six rental properties and managing the rental of nine others in southern Vermont. According to the story, the couple rakes in over $100,000 in gross bookings per month.
Insider framed the story as one of capitalist ingenuity. Not everyone read it that way.
Emily Allyce Rampone, former staffer of U.S. Senator Bernie Sanders, I-Vt., and currently has a doctorate in entomology. student at Washington State University, caught on Twitter to express his contempt.
“Dear out-of-state investors, this is NOT a feel-good piece. Your ’empire’ is contributing to a severe housing shortage in Vermont. Please stop,” reads the tweet, which has since been shared more than 20,000 times.
Faced with a critical housing shortage, the Vermont Legislature and Governor’s Office have made housing investment a priority. But rents have exceeded salaries, and some people can take several months to find a place to rent.
The Windham Windsor Housing Trust helps people find affordable housing to rent and own in the corner of Vermont at the center of the Insider room. Elizabeth Bridgewater, the organization’s executive director, said an influx of out-of-state buyers has reduced the number of local people she works with who are able to buy homes.
“We see a lot of people (buying) with cash, and without contingencies,” Bridgewater said. “Locals buying their first home, and anyone buying their first home, unless they have a lot of family money or big savings, it’s usually a matter of scraping together the last penny to sneak into this new home.”
With the onset of the pandemic, Bridgewater noticed more and more people moving to Vermont from New England and being able to work in well-paying jobs remotely.
Megan McMahon, a realtor and rental property manager who focuses on properties near Stratton Mountain Resort, said that before Covid, she had seen people who fit the Insider profile grab rental properties in southern Vermont.
“Thirty-somethings were picking up and doing Airbnbs,” focusing on properties around $300,000, she said. The age and price demographics both match the Connecticut couple from the viral tweet.
But according to McMahon, the housing boom — which has been accelerated by the pandemic — has driven up home prices at the ski resorts where she works, leading many rental property operators to cash in and sell their homes.
Although short-term rental platforms such as Airbnb, VRBO and HomeAway have been around for over a decade, their effects on housing markets are not fully understood.
A 2021 study from Carnegie Mellon University found that short-term rental platforms like Airbnb caused a greater reduction in affordable housing than any other level of rental housing income.
A study by Harvard’s Joint Center for Housing Studies, focusing on the New York rental market, found that Airbnb raised rental prices across all income brackets, but had the biggest effect on more expensive homes.
Across Vermont, communities have sought to regulate short-term rentals with varying success. The Burlington City Council passed sweeping restrictions on short-term rentals, but the mayor ultimately vetoed the measure. Stowe Ski Resort has rental regulations, including restricting rentals of less than one week. And Hartland proposed limiting Airbnbs by adding clarifying language to its city plan.
Bridgewater, the affordable housing specialist, noted that in southern Vermont’s rental stock, single-family homes play a larger role than in much of the rest of the country. These homes are more likely to be attractive vacation destinations than smaller multi-unit apartments, which make up a larger portion of the rental stock nationally.
But although housing inventory was recently lower than it had ever seen, Bridgewater said there was reason to believe the market could be changing – slowly.
“I think we’re seeing a release from the pressure that we’ve seen over the past couple of years,” she said, pointing to the higher frequency with which offers from her buyers are being accepted. “We’re hopeful about that.”
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