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The Gains and Losses of Short-Term Rental

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An objective view of Steamboat’s booming rental market

For the past decade, there’s been a concentration of growth in big cities across the U.S. Country living simply hasn’t been able to compete with metros when it comes to job markets, educational opportunities, or diverse lifestyles. And where there are more people, there’s usually more money to spend on extras like traveling – especially to rural mountain communities like Steamboat Springs. And with a growing number of tourists comes a greater need for lodging.

Enter the golden age of VRBOs and Airbnbs…

Steamboat’s most recent housing boom has over 4,815 homes scattered around its beautiful valley. Of those, currently over 51% (2,498) are active short-term rentals.  Because of the increase in tourist demand, the nightly rate for a  short-term rental significantly overshadows the long-term rates, so homeowners are deploying this tactic in order to gross three to four times the amount they would otherwise incur in a long-term rental property.

“Many of these owners are just like the rest of the 13,214 year-round living and working residents in the ‘Boat,” Sotheby’s realtor Kiyah Roe says. “They’re trying to figure out creative ways to make a few extra dollars.”

And why wouldn’t they?  As tourism increases, cost of living increases with it.  So, many of the year-rounders are looking for ways to subsidize their income to afford living in Steamboat.

“Other owners are small families that love the ‘Boat too – almost as much as the locals – and can’t imagine spending their free time in any other place,” Roe confirms, so  they empty their pockets and buy that second home in Steamboat,  counting on its short-term rental revenue to make up the difference between visits.

But unfortunately, this lucrative income market has an unseen downstream impact on the Steamboat community. 

Rural gentrification is a phrase that’s being used more often to describe what’s happening in places like Steamboat. It’s a process where higher income investors displace lower income residents changing the essential character of a town in a single generation.

Steamboat used to be known for its homesteaders, ranchers, small business owners and year-round workers raising their children to then take up where their parents left off. For generations, that’s how Steamboat maintained its genuine warm and welcome small-town feel. Now, the town is battling the potential of becoming “the next Aspen.” 

In many ways, tourism has been the lifeblood of the Yampa Valley. It’s given Steamboat a new purpose as the final frontier of resorts that has held onto its unique identity. While its competitors quietly fell into line as kitschy chains of ski resorts and high-ticket rates, Steamboat didn’t budge. Not much anyway. It was its own laid-back, Western town and no one was going to shake its tight-knit community. Maybe that’s what the tourists loved most.

Maybe that’s why the short-term rental market spiked 175% in less than a decade.

But a community with decreasing long-term rental options coupled with an increase in employment demand for the lower-income segment (industry workers) has already created the inability to support the lives of those working to make this town run.  So, while homeowners contributing to the short-term rental boom are reaping profits that are enabling them to enjoy Steamboat, the indirect impact is that others are losing that opportunity because they can’t afford to live here.

Which is the true crux of so many of the decisions that we homeowners have to make: what might be best for ourselves and our homes, might not be what’s best for the community we love.  And while the short-term benefit is truly appealing, will the long-term effect be worth it?  Or will it change what originally brought us here?

And looking beyond ourselves, the question is: What does the community of Steamboat want for their town’s future?

If it wants to retain its image as the best small town and community-oriented resort, it’s going to have to start considering the long-term effect of this incredibly lucrative profit sector.  Currently, there are minimal restrictions for one to acquire a permit for a short-term rental property.

Zoning changes could also be considered.  According to Jason Peasley, Executive Director of Yampa Valley Housing Authority, “Steamboat has a limited supply in zoning options for long-term apartment rental complexes.” And even when YVHA reaches their target goal in the next decade to provide housing for 600 residents, that only scratches the surface for a quarter of the struggling families.

Looking at all sides of this topic, there’s so much that’s uncertain.  But there is one thing that’s crystal clear: the decisions we make on our homes inevitably have an impact on our communities and short-term rentals are no exception. 

Steamboat has always been a town built on the importance of its people and its community. And if we want it to stay that way, difficult choices will need to be made.  A balance needs to be found; a community that allows for all walks of life to live and enjoy this beautiful place we call home. 


Steamboat Cost of Living

Median Home Cost: $649,757(1)

Per-Capita Income: $42,792 (2)

Number of Households: 4,815 (3)

Active Short Term Rentals in Steamboat: 2,498 (4) 

  • (1) zillow.com
  • (2) census.gov; 2014-2018
  • (3) census.gov; 2014-2018
  • (4) airdna.com

Tera Johnson-Swartz is an avid freelancer in Colorado and keeps busy playing music, painting, writing, and whenever her three young children and pup aren’t nipping at her heels, she might be found stealing an occasional nap.


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