VT proposing restrictions on Short Term rentals

[Killingtime]

I bought a condo in Vermont in 2007 when the real estate market was already showing signs of cracks and I thought how far could it go down? 10 or 15% I could live with because my wife loved the place and I expected to have it a very long time. by 2010 it was worth half of what I paid. Banks stopped lending on second and vacation homes and buyers who were willing to fork over cash dried up. It took a very long time for the values to come back up. It feels as though we are going through something similar right now and it is 2005/2006 all over again.

 

[cdskier]

Excuse my ignorance....What kind of taxes do VBRO and Air B&B pay in VT vs Hotels and B&B's? I really have no idea.

The same thing...the VT Meals and Rooms tax. AirBnB collects and remits to the state on your behalf (assume VRBO does as well but didn't specifically look). So interestingly enough, restricting STR via these options actually also would potentially hurt their tax revenue.

 

[BenedictGomez]

Disagree with this. While not a ski condo, renting my very modest beach shack on Cape Cod 2-4 weeks per summer really helps to keep costs of upkeep and tax burden in check. An extra 5-10k never hurts. Without this option the math might still work, but no sure thing. I'm sure many ski home owners feel the same.

Yup. I'm surprised numerous people agreed with the original poster. The income from rent clearly can strategically be used to help "afford" the unit better, you can even model it as bringing down the cost of the acquisition. It's not much different conceptually than when I sell OOTM call options against a long position. It brings down my cost basis.

 

[jimmywilson69]

I agree with both of these.

If you have to rent all but say 2 weeks in your "prime season" to make it work, then yes you probably shouldn't have bought it. However, if you want to rent it a few times to help pay the taxes or offset some renovations. then you are just being a smart financial person. Hell if I could rent my primary residence to pay for things I might consider it LOL

 

[thetrailboss]

It has nothing to do with COVID19 & everything to do with government wanting more tax revenue.

Maybe, but I am pretty sure it has more to do with what I said--special interest groups representing their constituents. In this case, the hotel and lodging industry that are hurting in Vermont after COVID.

 

[jimmywilson69]

That is also true. I'm pretty sure that's why NYC has a ban on STR.

nobody should be making knee jerk reactions right now...

The lobbyists should be working over the VT legislature to loosen their insanely tight restrictions instead.

 

[kingslug]

I think the term affordable housing has changed a tad bit these days. What exactly is affordable housing anymore?
What I have seen is that rundown house down the block that no one wanted..well its now refurbished and turned into a rental. All over the place..so much so that now they are building new ones. Drive around Stowe..you will see. Been going on for a while now. Those little studio condos on the mountain went up quite a bit in the last year..and now they are building more of them. They're not building anything to house employees. No money in that.

 

[BenedictGomez]

Maybe, but I am pretty sure it has more to do with what I said--special interest groups representing their constituents. In this case, the hotel and lodging industry that are hurting in Vermont after COVID.

Oh I absolutely agree with that too. It's happening all over America whereby AirBNB & VRBO are under attack & often it's partially (perhaps all) driven & funded by the hotel lobby & their campaign donations.

What it's definitely NOT about, however, is COVID19.

 

[skithetrees]

Are you kidding me. Go look at the prices right now at sugarbush. The market has never been hotter. I know at least 5 people who have sold for way above what they paid. A condo in my building sold this week for $217K that was bought for $140K 5 years ago. The house up the street that was bought 7 years ago for $550K sold for $1.2M. The market is insane. I am not saying to Buy right now but if you are selling. OMG.

I’m looking at 30 year trends. I don’t know what the market is this year, doesn’t affect me. It will all even out over time to basically no gain. You are looking at 2007 right now.

 

[Hawk]

Ya it leveled out into my friends pocket. To the tune of 75 grand. In 30 years at Sugarbush the real-estate has been basically flat and now is going up. I doubt it will go back down to the levels pre covid. So if you are looking at trends why would you not know what is going on this year? Isn't this year part of the trend?

 

[kendo]

there's (2) other VT bills in development targeting the short term rental market... both for creating a statewide STR registry and for implementing annual Health & Safety inspections and fees.

H.256 Draft Bill Template (vermont.gov)
and
S.79 Draft Bill Template (vermont.gov)

The state has no STR registry and the lodging industry has been pushing for more STR H&S oversight and fees (or reduction in their fees - which would never occur). These bills have more of a chance to be implemented as they create a known STR database for additional state and local regulations.

H.200 (70% owner occupancy) and the (2) bills above were recommended by a May 2020 Dartmouth STR study - commissioned by VT lawmakers to define "policy options to address the uneven playing field". prsshorttermrentalfinal.pdf (dartmouth.edu)

Expect to see another bill forthcoming that will require additional insurance coverage for STR owners, as most homeowner policies have a business-use exclusion.

 

[skithetrees]

Ya it leveled out into my friends pocket. To the tune of 75 grand. In 30 years at Sugarbush the real-estate has been basically flat and now is going up. I doubt it will go back down to the levels pre covid. So if you are looking at trends why would you not know what is going on this year? Isn't this year part of the trend?

Just my opinion. It’s free, so take it for what it’s worth . To your point, VT real estate was flat for 30 years and is now going up in view of a once a century type event. My point is that one, or even a few years, do not make a long term trend. Hell, house prices in my very nice suburb are going up. Not complaining about the equity bump, but nor am i counting on it long term. A lot of houses are flat from early 2000s after losing 25%+ in 2007.

 

[machski]

I think it's happening in ski towns everywhere, too. We have a 2BR condo at Sunday River, bought in 2016 - one of the many built in the Les Otten days. Cheap construction, no frills, but super convenient. Similar condos are now being listed for over 300K which seems just bananas for old buildings with deferred maintenance galore (more than double what we paid!) I guess the smart move is to cash in on the fever and sell, but we like the place and didn't buy it as an investment in anything other than easier weekend trips. In this context, it's not surprising that Sunday River accelerated the fancy new Merrill Hill development, lots of buyers these days.

We own at SR too. Bought small to afford it outright and not have to consider renting it out. We "loan" it out to friends/family when we aren't using it if any are interested or ask.

A two bed unit in our complex just went on market with an ask of $319K! Zero upgrades since the original LBO days build in the 80's, even the furniture looks original!! But then again, SR has sold out positions in the new Dreamaker Lodge, the first new two bed (and 3/4 bed penthouses) condos in decades on hill. Of course, it upped the bar on pricing, with 2 beds priced above half a million to start.

 

[Hawk]

We almost bought a small A frame in Viking village before we opted to move to Sugarbush. It was going for 250K at the time. If we bought that things might have turned out entirely different. I bet it is worth 500K now.

 

[2Planker]

The MWV Real Estate scene is on Fire. People are outbidding each other, and going 10%-15% over asking price.

 

[raisingarizona]

Covid has brought in the ultimate sh$t storm to the housing crisis in ski towns. Short term rentals are a part of the equation.

Ski communities are ‘getting crunched on all sides’ - High Country News

The pandemic has heightened cost-of-living issues in resort towns.

www.hcn.org

 

[kingslug]

142 Red Sled Dr #308, Stowe, VT 05672 | Zillow

Zestimate® Home Value: $1,375,000. 142 Red Sled Dr #308, Stowe, VT is a condo home that contains 1,324 sq ft and was built in 2016. It contains 2 bedrooms and 2 bathrooms. The Zestimate for this house is $1,486,700, which has increased by $16,871 in the last 30 days. The Rent Zestimate for...

www.zillow.com

$1132.00 a sq ft...holy canoli.

 

[cdskier]

142 Red Sled Dr #308, Stowe, VT 05672 | Zillow

Zestimate® Home Value: $1,375,000. 142 Red Sled Dr #308, Stowe, VT is a condo home that contains 1,324 sq ft and was built in 2016. It contains 2 bedrooms and 2 bathrooms. The Zestimate for this house is $1,486,700, which has increased by $16,871 in the last 30 days. The Rent Zestimate for...

www.zillow.com

$1132.00 a sq ft...holy canoli.

Don't forget the $1000+ monthly HOA fees (although that does include a lot you might pay separately or extra for elsewhere)!

Basically brand new, Spruce Peak, heated parking garage, Fitness center, high end everything inside...what did you expect? That place was never built with the intention of being bought by common-folk...

 

[Hawk]

I have a friend that bought one of those units on Spruce Peak. Those were obscenely expensive even prior to covid. Her unit is next to a partner of a large venture capitol company and down the road from Abigail Johnson of Fidelity. These are people at top of the food chain, 10 levels above most of our pay grades. Certainly not something to compare to other VT real estate. Really nice place though. I think for the money I would rather have a place on mountain at Whistler or some other place out west.

 

[deadheadskier]

I have a friend that bought one of those units on Spruce Peak. Those were obscenely expensive even prior to covid. Her unit is next to a partner of a large venture capitol company and down the road from Abigail Johnson of Fidelity. These are people at top of the food chain, 10 levels above most of our pay grades. Certainly not something to compare to other VT real estate. Really nice place though. I think for the money I would rather have a place on mountain at Whistler or some other place out west.

The people who can afford Spruce likely have one or five places out West as well.

But the current trends in Stowe really date back to 9/11.

I got there in 95 and stayed through actually 9/12/01 and then moved out of the Northeast. Back in the 90s the town was filled with multi generation locals and ski bums. Most popular cars driving around town were old Saabs and Subarus. It was pretty easy to find a reasonably affordable year round apartment or ski bum house for the winter.

Moved back in 2004 and it was all Range Rovers and Audi's. Tons of locals had moved off to Morrisville, Johnson, Wolcott etc. Some did so opportunistically by selling, others due to skyrocketing taxes and rents. Seasonal ski bum scene rapidly fading and being replaced with Visa workers. There was only a minor correction in 2009.

The difference now is that the technology is so much better for WFH.

Such a bad mix when the primary opportunities outside of WFH are low wage service jobs.