Summit County second home owner Rick Davis said he never wants to buy property in the county.
Davis said he and his wife, Teresa, who live in Austin, Texas, have regularly brought their sons to Summit County since 1988 to ski and spend time outdoors as a family.
His sons loved him so much that they eventually moved to Denver to be closer to the resort community. After their sons had kids, Rick and Teresa decided they wanted a place in Summit County to welcome their family, be close to their grandkids, and enjoy the county they’ve loved for so many years. years.
The two bought a townhouse in Wildernest in March 2022. Over the next month, they spent large sums of money paying local workers and businesses to upgrade the house, Rick said, because she didn’t hadn’t been updated for years.
Rick said they decided to buy knowing they could supplement the cost of the mortgage with short-term tenants. However, once the May 24 moratorium on certain short-term rental licenses in affected neighborhood areas, Rick was unable to rent the property.
Now Rick said he may have been very spread out since finding out he couldn’t rent his property, especially since he couldn’t rent during the peak months of November, December and January.
At the County Council of Commissioners Summit Board meeting on Tuesday, August 9, Commissioner Tamara Pogue and Commissioner Elisabeth Lawrence said they heard from many second home owners who have struggled to pay for their property without being able to rent it. short term.
The county implemented the moratorium to assess problems caused by short-term rentals and homes that remain vacant for the majority of the year or are not accessible to the workforce that keeps the county going. . Up to 12 local workers can share a single home, and housing options for those below the region’s median income are few and far between.
Short-term rentals are also causing issues related to excess litter, increased noise violations, and other negative effects on neighborhood character, which regulations seek to address during the moratorium.
Sara Gambino, broker at Berkshire Hathaway HomeServices Colorado Real Estate, grew up in Summit County and saw the real estate market change drastically over the years.
“I would say, you know, 60% of our market is second home owners,” Gambino said. “And the majority of them can’t afford it without offsetting the cost.”
Short-term rentals are therefore the perfect solution, said Gambino.
It’s such a normal thing that Gambino said when second home owners want to buy a property, lenders walk them through a process of projecting the number of short-term rental visitors and how much a homeowner will earn from renters for ensure they can financially qualify for the purchase.
“Investment property is essentially a business, because you generate income using your investment,” she said.
And with a business as integral as short-term rentals in Summit County being regulated, Gambino said there are inevitable consequences.
Summit County resident Timothy Paynter has owned a second property in Breckenridge for 20 years which he rents out six months a year.
His loft studio served him during this time, but now Paynter has a 2-year-old grandson whom he wants to grow up in the county and attend Summit County schools.
“I looked at the programs they offer in Summit County, and I’m impressed that there’s golf, skiing, rock climbing and swimming,” Paynter said, “and I wish he was a part of all of that.”
Therefore, Paynter wants to buy another property in Summit County, a property where he can expand his home to accommodate his grandson and his grandson’s parents. However, with the increase in the price of housing, he would need to rent it.
He said that during high seasons and holidays, he and his family might open a room in their house for a tenant because there is so much money to be made during high season.
However, Paynter is unable to obtain a short-term license in many neighborhoods, and those where it could obtain a license are well outside its price range, he said.
Paynter added that he wanted to make this investment for his grandson. For now, though, he’s stuck and feeling frustrated that the moratorium hasn’t done as much as it should have to help the workforce housing count.
Gambino also pointed out that she hasn’t seen strong demand from locals for workforce housing even during the moratorium.
” They did it. The pause button was pressed,” she said. “Where is the local demand?”
Both Paynter and Rick said they were frustrated with the moratorium and struggled to understand its benefits.
“They’ve been looking at the angles of short-term rentals for years,” Gambino said, “and it’s basically a business, but it’s not treated like a business.”
Paynter said he believes the county will feel economic effects that have not yet been anticipated, such as less room for skiers in Breckenridge during the winter months. Rick also said he believes tourism is an integral part of Summit County’s economy.
Gambino also agrees.
“I don’t think every angle was, I guess, empathetic,” she said. “It slowed down the market. This has slowed down tourism.
She added that growing up in the county gave her a unique perspective on what the county has been trying to become over the past 30 years, when it was just a winter tourist town. With all this context, she sees the moratorium as a regression.
“New people got involved in politics and ski resorts and everything, and their goal was to make it a winter and summer destination,” she said. “So they kind of go back to all the work that’s been done to make the county the destination that it is.”
The moratorium will end in February 2023 and many people have ideas for improving the situation.
“I think the most important thing for people to understand is that we’re a resort community and our whole economy is based on tourism,” Gambino said.