In a wafer-thin rental market, Airbnb gets a lot of blame

While short-term rental platforms such as Airbnb, VRBO, and HomeAway have been around for more than a decade, their impact on housing markets is not fully understood. Screenshot

A story on the financial news website Business Insider — and accompanying viral tweet — has drawn attention to the effects of Airbnbs on Vermont’s wafer-thin rental market.

The article describes a “millennial couple” from Connecticut who created an “Airbnb empire” by buying six properties to rent and managing the lease of another nine in southern Vermont. According to the story, the couple brings in more than $100,000 in gross bookings per month.

Insider presented the story as a tale of capitalist ingenuity. Not everyone reads it that way.

Emily Allyce Rampone, a former staffer to U.S. Senator Bernie Sanders, I-Vt., and a current entomology Ph.D. student at Washington State University, went to Twitter to express her contempt.

“Dear out-of-state investors, this is NOT a feel-good piece. Your ’empire’ is contributing to a serious housing shortage in VT. Please stop,” reads the tweet, which has since been shared more than 20,000 times.

Facing a serious housing shortage, the Vermont legislature and the governor’s office have made housing investment a priority. But rents are higher than wages, and it can take many months for some people to find a rental property.

The Windham Windsor Housing Trust helps people find affordable housing to rent and own in the corner of Vermont, in the center of the Insider piece. 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 can buy homes.

“We see a lot of people (buying) with cash, and with no contingencies,” Bridgewater said. “Local people buying their first home, and anyone buying their first home, unless they have a lot of family money or significant savings, are usually scraping together that last dime to squeeze into that new home.”

With the outbreak of the pandemic, Bridgewater noticed that more people were moving to Vermont from New England, who are able to work remote high paying jobs.

Megan McMahon, a real estate agent and rental agent who focuses on properties near Stratton Mountain Resort, said she saw pre-Covid people who matched the Insider profile and picked up properties to rent in southern Vermont.

“The over 30s were picking up and doing Airbnb,” she said, focusing on properties around $300,000. The demographic age and price both match the Connecticut pair from the viral tweet.

But according to McMahon, the housing boom — accelerated by the pandemic — increased the price of homes in the ski towns where she works, causing many rental property operators to cash in and sell their homes.

While short-term rental platforms such as Airbnb, VRBO, and HomeAway have been around for more than a decade, their impact on housing markets is not fully understood.

A 2021 Carnegie Mellon University study found that short-term rental platforms like Airbnb have led to a greater reduction in affordable housing than any other income level of rental housing.

A study by Harvard’s Joint Center for Housing Studies, focusing on the New York City rental market, found that Airbnb increased rents for all income groups, but had the greatest effect on more expensive housing.

All over Vermont, communities have tried to regulate short-term rentals with varying degrees of success. Burlington City Council approved sweeping restrictions on short-term rentals, but the mayor eventually vetoed the measure. The ski resort town of Stowe has rental regulations, which include limiting rentals of less than a week. And Hartland has suggested limiting Airbnbs by adding clarifying language to its city map.

Bridgewater, the specialist in affordable housing, noted that single-family housing plays a greater role in southern Vermont’s rental stock than much of the rest of the country. Those homes are more attractive vacation spots than smaller, multi-unit condos, which make up a larger share of the nation’s rental supply.

But while the housing stock has recently been lower than it had ever seen, Bridgewater said there’s reason to believe the market could slowly change.

“I think we’re seeing the pressures that we’ve seen over the past two years loosen up a bit,” she said, pointing to the higher frequency of acceptance of her buyers’ offers. “We are hopeful about that.”

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