How much do short-term rentals like Airbnb actually limit Utah’s housing stock?

Homes in North Salt Lake are pictured Monday, July 15, 2024. (Photo by Spenser Heaps for Utah News Dispatch)

There has been a dramatic increase in short-term rental listings in the state, which in Cities banned in 2017 to ban Utahns from listing their homes on short-term rental websites, according to a study released Wednesday examining their effect on housing supply and affordability.

Although short-term rentals make up only a fraction of the state’s total housing stock (less than 2 percent, according to the report), they are concentrated in ski resorts and recreation spots like Park City, Moab and St. George, where they have a greater and more disproportionate impact on housing availability and affordability.

Here are some key takeaways from the report released by the Kem C. Gardner Policy Institute at the University of Utah, authored by Dejan Eskic, lead researcher, and Moira Dillow, housing, construction and real estate analyst.

• Rapid growth: The average number of monthly short-term rental listings in Utah has increased by more than 39% in just three years, from 16,803 in 2021 to 23,428 in 2023.

• The big picture: Statewide, short-term rental listings represent approximately 1.9% of all residential units. Although this figure is relatively small, it is increasing – and is expected to continue to grow.

• Departmental concentration: More than 60% of all Utah short-term rental listings are concentrated in three counties: Summit County, Salt Lake County and Washington County. In 2023, Summit County averaged 6,443 listings per month. Salt Lake County averaged 4,869. Washington County averaged 3,138.

• Areas disproportionately affected: Summit County – home to the popular and expensive Park City ski resort – has the state’s highest concentration of short-term rentals as a proportion of the county’s total housing units. In Park City alone, short-term rental listings account for 41.7% of the city’s total housing share, while in unincorporated Summit County, they gobble up 25.7% of the housing stock of the county. In Grand County (home to Moab and near Arches National Park), short-term rentals consume 18.7% of the region’s housing stock. Compare that to Salt Lake County, where short-term rental listings make up just 1.1% of the county’s total housing.

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• Loss of housing: Tourist hotspots like Summit and Grand County are losing existing homes to short-term rentals. From 2022 to 2023 alone, 14.2 new short-term rental listings went online in Summit County for every 10 new residential units added that year. In Grand County, 10.3 new short-term rental listings were posted online for every 10 new residential units added.

• Mainly single-family homes and apartments: Breaking down the types of homes included in short-term rental listings, nearly 41% are apartments, while more than 39% are single-family homes. About 13% are townhouses.

• Tourism and leisure drive growth: Tourism, particularly around national parks and ski areas, is a major driver of short-term rentals. In 2023, more than 83% of short-term rental listings were located within 10 miles of a state park, national park, or national monument. Nearly 25% were located within 400 meters of a ski resort, and almost half of all listings were located within 10 miles of a ski area.

• Concentrated in rich areas: Short-term rental listings tend to be concentrated in areas with higher housing prices and household incomes, higher homeownership rates and a higher number of single-family homes.

As short-term rentals increase in Utah, should lawmakers ease regulatory restrictions?

In 2017, the Utah Legislature passed HB253which prohibited cities from barring Utahns from listing their homes on short-term rental websites. A few cities have tried to enact certain regulations on AirBnBs and VRBOs, but application can be difficult.

In the years since HB253 passed, some lawmakers have Considered Changes to Utah Short-Term Rental Laws — some for allowing more restrictions and others for more leniency — but lawmakers have yet to decide exactly what to do about the growing number of short-term rentals in their state.

This year, at least one lawmaker, Rep. Neil Walter, R-St. George, said he intends to introduce a bill to reevaluate what he called at an interim meeting in August the “Knotwell rule,” referring to HB253 using the name of its sponsor at the time, Representative John Knotwell.

“One of the things that impacts the housing supply in our state is short-term rentals,” Walter said at the Interim Political Subdivisions Committee meeting in August, adding that in his county home, Washington County, “there are 1,000 homes that are estimated by The City of St. George to be rented for short-term rentals that do not meet their zoning, but they do not have the capacity to enforce this zoning mainly because of the Knotwell rule.

Estimates included in the Kem C. Gardner report are even higher for St. George, ranking that city fourth in total short-term rentals, with approximately 1,277 listings in 2023. However, according to the report, This represents less than 3% of the real estate stock in this city. Washington County as a whole had about 3,715 listings in 2023, or about 4.3% of its housing stock.

Walter’s bill has not yet been made publicit is therefore not yet clear what his legislation will entail. But he called regulating short-term rentals “a very important local control issue,” to allow cities to “be able to enforce their zoning.”

“If St. George feels that this is impacting its housing supply, then the municipality can take action and enforce its zoning in a different way, which would increase its housing supply,” Walter said. “I think it’s an important aspect of this particular discussion to reconsider this legislation.”

But will allowing more regulation of short-term rentals actually make a difference?

Eskic told reporters during a press briefing Wednesday that it’s important to recognize that short-term rentals represent only a fraction of the statewide housing affordability problem — although he recognized that they have a greater impact on some communities than others.

“When we look at what’s affecting housing, short-term rentals are part of it, but it’s not the main thing, is it? » said Eskic. “There is no main room. There are many barriers to housing affordability. Short term rental is just one part, one small part of all of this.

Eskic noted that even if all short-term rentals were banned statewide, “we would still have a housing shortage,” which housing experts attribute largely to rising housing costs in Utah , as supply has long lagged behind demand, even before the COVID-19 crisis. The Covid-19 pandemic, its remote work opportunities and low interest rates have fueled a run on the real estate market.

“When we look at where the short-term rentals are, they’re not necessarily in the highest growth areas of our state, but just in the high tourism areas,” Eskic said. “(If you) ban short-term rentals in Summit County tomorrow, are you going to see a lot of people occupying those housing (units)? Many of these short-term rental homes are likely second homes. … So will they have an impact on supply? It’s unlikely.

Eskic also highlighted New York City, which recently adopted a aggressive banning of Airbnbs. “All we did,” he said, “was to drive up the prices of their hotels. It hasn’t had an impact on affordability yet, and I don’t think it will because it’s New York. »

Eskic said if policymakers consider changing Utah’s short-term rental laws, they should probably consider policies that would be more tailored to communities that are more impacted than others.

“If we implement a comprehensive state policy, I don’t think it’s going to create much impact on affordability statewide,” he said. He again highlighted Summit County — home to Utah’s most expensive ZIP codes — and said that even if all short-term rentals are listed for sale there, “they will still be (listed at) market prices.” Summit County.”

When asked how policymakers can balance the pros and cons of the economic impacts of short-term rentals, Eskic said, “that’s a very difficult question to answer.” But he said policymakers should consider “housing affordability gaps” in tourist hotspots, which typically struggle to maintain enough housing for workers in service sectors, including the retail, hotels and restaurants.

“It’s not a problem everywhere,” he stressed. “It’s a problem in some communities.”

Short term rental-October 2024

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