Most people who rent out a property they own through Airbnb or VRBO are people like myself who are just trying to make ends meet and be able to afford a small slice of Vermont.
We rent out our vacation homes to pay the mortgage and the upkeep. There’s no big profit to be had. I bought my vacation property in 2003 and started renting it out in 2011 after a painful divorce. I would have had to sell the house I plan to retire in someday, but renting it out enabled me to hold onto it for myself and my children on a teacher’s salary. My children would have been heartbroken had I been forced to sell our place.
In the 10 years I have been renting it, I have yet to turn a profit (I hope to do so for the first time in this coming year). But I have paid tens of thousands of dollars to my loyal housekeeper, local electricians, plumbers, landscapers, and carpenters, as well as tens of thousands of dollars
in property taxes and Vermont room taxes. Most of us are doing this out of a labor of love, and it allows for a greater supply of vacation rentals at prices that average people can afford —average people who want to experience Vermont country life. Many are young people with children that can’t afford to book three rooms in a hotel. Many are people from urban areas experiencing real nature for the first time. Some of them don’t look like the average Vermonter, or share the same culture, but the opportunity to experience Vermont is just as good for folks from the city as it is for native Vermonters to experience them. Plus, it doesn’t hurt that they bring an influx of tourist dollars to a struggling state economy. If you enact this legislation [Bill H.200], the unintended consequences will be bad for just about everyone, except for the hotel industry. These unintended consequences include:
Causing a loss of tourist dollars coming into the state. Like it or not, Vermont is heavily dependent on tourist dollars, and the government could use the taxes that they pay. Where will they make up this lost revenue? That’s right. They will have to raise taxes on Vermont residents if they can’t get as much from people out of state.
Causing a loss of jobs overall in the tourist and hospitality industry. People who own short-term rentals hire housekeepers who can work for themselves and make a lot more money than they can as a full-time or part-time hourly worker for a hotel chain. The extra upkeep and repairs on short-term rentals gives extra business to blue-collar trades people who get hired to work on these houses, not to mention the construction workers who build new houses to satisfy demand and do renovations to make the properties more attractive to vacation renters.
Causing a glut of properties on the market and falling property values for everyone in Vermont. The goal of making housing more affordable in Vermont is a noble one. As a lifelong progressive Democrat, I get it. But what that really means is sinking property values. Want to get a home equity line of credit to pay for some renovations after the value of your home drops? Good luck! Find yourself suddenly underwater in your mortgage because of the drop in equity in your house? Too bad. The best way to make housing more affordable for everyone is to have a stronger economy with more and better paying jobs. These proposed reforms will do the opposite.
This is not going to help the long-term rental market either. With the loss of tax revenue from the tourist industry, loss of property taxes because of falling property values, and higher unemployment, property taxes will have to go up. This will be passed onto the consumer. Most vacation rental owners will not rent their homes out long-term. They will just sell. Increased property taxes will make long-term rents go up, not down.
The proposals to require state residency requirements to operate short-term rentals and requirements for owners to live on-site at least 270 days a year and also require fire and safety code inspections. Are short-term rental owners going to be required to install fire-escapes on their vacation homes? How is this fair to people who have invested everything into their second homes and now stand to lose a good chunk of their home’s value plus be unable to make any money that they were depending on to help pay the mortgage?
Instead of trying to “level” the playing field by introducing more government regulations onto the rental industry, why not level it by reducing costly regulations for the hotel and bed & breakfast industry. In this day and age of online reviews and litigation, the threat of getting bad online reviews or getting sued for everything you own is enough motivation for businesses to provide a safe clean environment.
Is there any data that actually shows Airbnb or VRBO type rentals are any less safe or cleanly than hotels and Bed and Breakfasts? These regulations just lead to bloated government paying for salaries of unnecessary inspectors collecting unnecessary fees that stifle economic growth in Vermont and destroy small scale economic opportunity.