In a razor-thin rental market, Airbnb is getting a lot of the blame

Although short-term rental platforms such as Airbnb, VRBO and HomeAway have been around for over a decade, their effects on housing markets are 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 razor-thin rental market.

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

Insider pitched the tale as one of capitalist ingenuity. Not everyone read it that way.

Emily Allyce Rampone, a former staffer for US Sen. Bernie Sanders, I-Vt., and a current entomology Ph.D. student at Washington State University, took to Twitter to voice her disdain.

“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,” read the tweet, which has since been shared over 20,000 times.

Facing a critical lack of housing, the Vermont Legislature and the governor’s office have made housing investment a priority. But rents have outpaced wages, and it can take many months for some people to find a place to rent.

The Windham Windsor Housing Trust helps people find affordable housing to rent and own in the corner of Vermont at the center of the Insider piece. Elizabeth Bridgewater, the organization’s executive director, said an influx of out-of-state buyers has decreased the number of local people she works with who are able to purchase homes.

“We’re seeing a lot of people (buying) with cash, and no contingencies,” Bridgewater said. “Local folks that are buying their first home, and anybody buying their first home, unless they have a lot of family money, or significant savings, it’s usually scraping together that last nickel to squeeze into that new home.”

With the onset of the pandemic, Bridgewater noticed more people moving to Vermont from around New England who are able to work high-paying jobs remotely.

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

“The 30-somethings were picking up and doing Airbnbs,” focusing on properties around $300,000, she said. The age and price demographic both match the Connecticut couple of the viral tweet.

But according to McMahon, the housing boom — which was accelerated by the pandemic — raised the price of homes in the ski towns where she works, leading many rental property operators to cash out and sell their houses.

Although short-term rental platforms such as Airbnb, VRBO and HomeAway have been around for over a decade, their effects on housing markets are not fully understood.

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

A study from Harvard’s Joint Center for Housing Studies, focusing on the New York City rental market, found that Airbnb increased rental prices across all income brackets but had the largest effect on more expensive housing.

Across Vermont, communities have sought to regulate short-term rentals with varying success. Burlington’s City Council passed sweeping restrictions on short-term rentals, but the mayor ultimately vetoed that measure. The ski resort town of Stowe has rental regulations, including restricting rentals of less than one week. And Hartland has proposed limiting Airbnbs by adding clarifying language to its town plan.

Bridgewater, the affordable housing specialist, noted that in southern Vermont’s rental stock, single-family homes play a larger role than in much of the rest of the country. Those homes are more likely to make attractive vacation destinations than smaller, multi-unit apartments, which make up more of the rental stock nationwide.

But though housing inventory was recently lower than she’d ever seen it, Bridgewater said there’s reason to believe the market might be changing — slowly.

“I think we’re seeing a little bit of loosening up on the pressure that we saw over the last two years,” she said, pointing to the higher frequency with which her buyers’ offers are being accepted. “We’re feeling pretty hopeful about that.”

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