Amid housing crises vacation towns limit short-term rentals

STEAMBOAT SPRINGS, Colo. — In the Colorado ski town of Steamboat Springs, motels line the freeway, once filled with tourists eager to pitch down the slopes or bathe in the local hot springs.

Now residents like Marc McDonald, who keep the town humming by working service-level jobs, live in the converted motels. They cram into rooms, some with small refrigerators and 6-foot-wide kitchens, or even just microwave kitchenettes. Others live in mobile homes.

Steamboat Springs is part of a wave of vacation towns across the country facing a housing crisis and grappling with how to regulate the industry they point to as a culprit: Short-term rentals such as those booked through Airbnb and Vrbo that have squeezed small towns’ limited housing supply and sent rents skyrocketing for full-time residents.

“It’s basically like living in a stationary RV,” said the 42-year-old McDonald, who lives with his wife in a just over 500-square-foot converted motel room for $2,100-a-month, the cheapest place they could find.

McDonald, who works maintenance at a local golf course and bartends at night, and his wife, who’s in treatment for thyroid cancer and hepatitis E, said they will be priced out when rent and utilities jump to about $2,800 in November.

“My fear is losing everything,” he said, “My wife being sick, she can’t do that, she can’t live in a tent right now.”

Short-term rentals have become increasingly popular for second homeowners eager to offset the cost of their vacation homes and turn a profit while away. Even property investment companies have sunk hundreds of millions of dollars into the industry, hoping to pull a larger yield from tourists seeking their own kitchen, some privacy and a break from cookie-cutter hotel rooms.

When the pandemic opened the floodgates for remote work, Airbnb listings outside of major metro areas rose by nearly 50% between the second quarter of 2019 and 2022, the company said.

In six Rocky Mountains counties, including Steamboat Springs’ Routt County, a wave of wealth flooded towns, with nearly two-thirds of 2020 home sales going to newcomers, most making over $150,000 working outside the counties, according to a survey from the Colorado Association of Ski Towns.

Local governments — from Lincoln County on Oregon’s coast to Ketchum in Idaho’s Smoky Mountains – are grappling with how to regulate the $74 billion industry they say fuels their economies while exacerbating their housing crises.

In June,…