Rental homes in the Wood River Valley are becoming scarcer and more costly, and an abundance of short-term rentals available on websites like Airbnb and VRBO are likely exacerbating the shortage.
Anecdotal reports abound of people vacating their homes to stay with friends, travel or even camp out to capitalize on the abundance of seasonal visitors who pay top dollar for a night, week or month of housing.
But homes and condos rented out short-term are homes that might otherwise be available for full-time residents.
Anne Jacobi is president of PioneerWest Property Management, overseeing management of 800 condos and other units in Ketchum, Sun Valley and Hailey. She said there’s a trend among her clients to turn to short-term rentals.
“I had an email yesterday from a client in Boise who asked if I thought the market here would support short-term rentals for his condominium in summer,” Jacobi said. “I said, ‘Absolutely.’ This is no longer just a ski town. The truth is they can get higher dollar per night with short term, if they can find someone to manage it.”
Blaine County Housing Authority Executive Director Dave Patrie said there are more shortages in rental units now than any time in the past five years.
“Anything that constrains the supply of rental stock available to full-time residents is a concern of ours,” he said. “We’re hearing from the entire income spectrum, low to high, about the lack of desirable rentals throughout the valley.”
The Housing Authority manages 14 income-restricted rentals that have maximum rental rates based on varying income categories, and also manages several market-rate units with no income or rental restrictions that are part of mixed-income developments.
“All of our rental units are full, with waiting lists in case one becomes available,” Patrie said.
A cottage industry
More than 10 percent of the Wood River Valley’s 12,500 homes, or rooms in homes, are available periodically for short-term rentals at prices much higher than typical monthly rates. Guests can rent anything from a large home in Warm Springs for $1,400 per night to a tree house in Ketchum for $69 per night.
Ketchum has identified six specific zones where short-term rentals are allowed for up to 30 days in length. They are the three Short Term Occupancy Zones and the three Tourist District Zones. According to online postings of availability, the local short-term rental industry is booming. Of the 794 Airbnb offerings in the Wood River Valley, only 27 were available the first week of July.
Cities partake of the boon as well, taking in revenue in the form of local-option taxes to support city infrastructure and services and to support commercial air service.
During fiscal 2015, Ketchum took in $144,275 in local-option-tax receipts from a 3 percent tax on short-term rentals. Based on that figure, Ketchum property owners earned $4.8 million from short-term rentals last year—and that’s assuming that the tax was charged on all the rentals.
Short-term rentals provide more revenue than hotel rooms in Ketchum, which brought in $118,552 in taxes during the same period.
Though no study has been conducted to measure the impact of short-term rentals on the overall rental market, cities are taking notice of potential problems relating to taxation compliance and other issues.
“The city is evaluating short-term rentals,” said Ketchum spokeswoman Lisa Enourato. “When the analysis is complete, we will present the information to the City Council.”
The city of Hailey also collects LOT revenue from short-term rentals, but does not specify which zones they are allowed in and has no description as to the maximum length of stay.
City Administrator Heather Dawson said the city does not separate the amount of hotel revenue from short-term-rental revenue. Hailey Community Development Director Lisa Horowitz said the city has been looking into short-term-rental impacts and taxation issues for six months.
“We try to collect LOT on these types of rentals, but to date we’ve not been successful in gaining support from the short-term-rental organizations,” Horowitz said.
She said she has called Airbnb to find out about a company to collect fees and send payments to cities.
“In order to do this, an agreement must be in place between Airbnb and the city,” she said. “As of now, we haven’t heard back from Airbnb.”
Changes in the rental landscape
According to Blaine County Housing Authority data, an average three-bedroom house in Hailey rents this year for $1,600 per month long-term. That same house can bring about $6,500 per month in summer with 20 days of short-term-rental periods on Airbnb.
With 650 short-term rentals available online in and around Hailey at various times during the year, it seems likely that the short-term-rental industry is taking a toll on long-term availability.
Property owners appear to be taking advantage of the resulting short supply by raising rent prices.
“Our employees have been hurt by rising rents,” said Hailey City Administrator Heather Dawson, “with some reporting that their landlords have raised their existing rent by $300 per month, even when the tenant has been long-term within the premises.”
According to Housing Authority data collected on long-term-rental options and prices, based on advertisements placed in the Idaho Mountain Express, there have been fewer options overall in the past few years in the Wood River Valley. Yet, for larger families, there are more options than there have been in the past.
The availability of Ketchum studio apartments has dropped 82 percent in the past four years, while the availability of homes with three or more bedrooms has increased 18 percent.
Yet, in recent years, the advertised prices for some Ketchum rental categories have decreased, while advertised Hailey homes have become more expensive. From 2015 to 2016, the cost of advertised two-bedroom rentals in Ketchum decreased by about $600, a drop of 30 percent. However, that figure does not represent an average cost to renters, but instead reflects what was advertised in the market. Meanwhile, the advertised cost of similar rentals in Hailey increased during the same period by about 2 percent.
Ketchum remains cost-prohibitive for many families, with two-bedroom homes renting for about $1,350 per month, compared to $930 per month in Hailey.
Despite a decrease in availability of rental units in all cities in the Wood River Valley, three-bedroom houses in Hailey have increased in availability from last year. Even so, their cost has increased from $1,250 in 2014 to nearly $1,700 this year.
“I’m not sure what’s causing this,” Patrie said. “But in Hailey we’re seeing more and more two- and three-bedroom homes for rent, but the rental price is going higher and higher.”
Patrie said the recent demand for housing has reached the south valley also.
“People who want to live in Bellevue are having a hard time finding a place,” he said.
Bellevue City Councilman Shaun Mahoney said at a recent council meeting that two of his employees at Mahoney’s Bar & Grill were having trouble finding a place to rent.
“Not only affordable housing, but housing, period,” Mahoney said.
On Oct. 5, the annual Economic Summit hosted by the nonprofit Sun Valley Economic Development will present a forum to discuss housing.
The title of this year’s event is “The Intersection of Housing-Development-Talent, Impacting Our Economy.”
“We understand how important housing availability is to our workforce, our local economy, and our future quality of life,” states the SVED newsletter distributed this month.
Express intern Zoe Simon contributed to this report.