Housing in the rural central tier of southern Vermont always has been dependent upon single-family homes. Apartment complexes are rare in most villages.
Instead, most residents in southern Vermont have found housing in single-family homes to purchase and apartments to rent in repurposed larger homes or other buildings.
Despite waiting lists for low-income or senior housing, that formula seemed to have satisfied the majority of the populace - until COVID-19 hit the East Coast in March of 2020.
The pandemic brought with it “Covid refugees” with a strong desire to escape the uncomfortably crowded but locked-down cities. And these refugees also brought with them hefty wallets that enabled bidding wars that some realtors said reminded them of what happened after 9-11: homes bought sight-unseen; properties without a perc test.
The beginning of Covid created a minor housing crisis for some local residents who were looking to buy. But most seemed to understand the market flux. And many believed that the refugees would stay and grow the communities.
With the rise of short-term rentals, that hasn't happened.
Short-term rentals didn't create the housing problem, but some people believe that they have made it worse, and town selectboards have begun to take notice.
Marion Major, outreach and marketing coordinator of the Windham & Windsor Housing Trust, which seeks to find homes for area residents, calls it a “complex scenario because the housing crisis has been building for so long and Covid exacerbated it.”
“Then the idea that people could buy homes and then put them on the market for short-term rentals full time [and] out of the financial reach” of local residents occurred, she says.
In the nick of time
David Lewis, who is in his early 40s, finally owns his first home. But his first home wasn't his first choice. He moved into a rental home in Andover in 2018 with his sights set on buying it. That one-bedroom, one-bath home on 4 acres was a perfect place for his gardens.
Lewis and his landlord settled on a price of between $110,000 and $120,000. But before any deal could be struck, Covid hit, bringing with it the pandemic influx of homebuyers.
“As soon as Covid happened,” Lewis says, “the owner had a higher price in mind.”
Lewis adds that the owner “really tried to work with me. But with the prices rising, well, you really can't blame him.” Lewis had to move out in September of 2020.
“Now,” says Lewis, “it's a full-time, short-term rental, unhosted.”
In short-term-rental jargon, a hosted rental is where the property owner lives on site or very nearby. The owner of an unhosted rental lives farther away - even hundreds or thousands of miles. An unhosted rental may be overseen by a local property manager.
Lewis was one of the lucky ones. He sent out feelers and was able to find a small house - one bedroom and one bath - on a quarter of an acre in Windham, which he bought for $89,000. He says the home is a bit smaller than the Andover home and he had to do some work on the place to secure his loan, but he's been able to make do with the smaller plot of land.
If Lewis had waited much longer, his Windham home would likely have been priced out of his reach.
According to the Vermont Housing Finance Agency, the average sale price for a single-family home increased almost 40 percent between 2019 and 2021, and it now exceeds what the average in-state family can afford by more than $100,000.
Lewis has become part of the small Windham community and is currently looking into the impact of short-term rentals.
One of those impacts, he fears, is a loss of community, explaining that “you lose volunteers for the fire department and other services you need to run” when so many of your homes are unhosted STRs.
Short-term rentals, by the numbers
Just how big a problem is this?
It's difficult to pinpoint because, as Major says, “there isn't really centralized data,” though “there has been conversation” at the state level to assemble the statistics.
“Neither has a statewide rental registry [been established], which has been talked about for years,” she says.
As a matter of fact, the state Legislature passed legislation that would have created a rental registry and a revolving loan fund to help with home purchases and allocated funding to bring rentals up to code. It was vetoed by Gov. Phil Scott in July of 2021.
AirDNA is a company that tracks “whole house” short-term rentals through rental websites. It defines “whole house STRs” to mean a complete home, apartment, or accessory dwelling, either hosted or unhosted, but not a room rented out in an already occupied house.
In looking at the growth of these “whole house” short-term rentals through Windsor and Windham counties, the trajectory is up.
Windsor County went from 1,142 in January 2019 to 1,458 in August 2022. Windham County went from 1,076 to 1,563 in the same time period.
[To explore the data from AirDNA, visit bit.ly/686-airdna.]
In both cases, each county saw a dip of whole house short-term rentals in May 2020 down to 868 and 764, respectively, which could indicate a “Covid dip,” where owners were either pulling their property off the rental markets or using their STR as their full-time home.
STRs are lucrative businesses, according to AirDNA data, with average prices in those towns spanning from a low of $200 a night in 2019 to a high of more than $600 a night currently, depending on the town.
The prices are obviously geared toward vacationers and not to the average Vermont renter. In 2019, according to the Vermont Housing Needs Assessment of 2020, 74 percent of Vermont's renters survived on less than the median income ($39,959 in 2020, according to the U.S. Census Bureau). Most spent 30 to 50 percent or more of their income on rent, while the average tenant earned $13.40 per hour.
When a house is not a home
In Vermont, with a large number of second homes, it isn't unusual for houses to be empty for a good part of the year.
But residents started noticing the number of single-family homes that were being listed on short-term rental platforms such as Airbnb and VRBO and how neighboring homes that once had families living in them were now hosting only vacationers for most of the nights they were occupied.
This was something different. It was a twist on the typical Airbnb model that had been normal throughout the country - a homeowner opens a portion of their home or a suite or attached apartment to guests to earn extra money to pay for college, the mortgage, necessities, or a vacation.
That's a model Tyler Maas believes in.
Maas, director of program and housing development with the Vermont State Housing Authority, says, “I find [short-term rentals] to actually help create housing stability, in a lot of cases [...] because Vermont has one of the largest discrepancies between cost of living and income.”
“Nobody's making any money, and housing is getting expensive,” Maas says. “So people are coming up with ways to make that affordable.”
But instead, these homes were being bought for the sole purpose of renting them out. They were now businesses - renting for an average of more than $250 per night - and no one is living in them full-time.
Colleen Garvey has had more personal experience with selling and buying homes in the past three years and with short-term rentals than many people. She and her husband moved from North Carolina to Chester in 2019, buying a house in the village that they then sold to be close to their daughter in Georgia during the pandemic in 2021.
It was a hot real estate market and, Garvey recalls, “We had so many offers it was ridiculous.”
They sold it to a person who wrote to them of his love for the area and the house's importance to him. Garvey now says she was chagrined to learn that their former home appears to be a full-time, unhosted short-term rental. The new owner could not be reached for comment despite multiple attempts.
It's not that the Garveys are against STRs - as a matter of fact, they have hosted guests in their homes in North Carolina, Chester, and Georgia. But the difference, she says, is that they too have always lived in the home, alongside their guests.
Besides the supplemental income, Garvey says, being a host has been “a social thing for us. We now have friends from all over the world.”
When the Garveys decided to move back to Vermont in 2022, they found the real estate market still hot and a home in Chester impossible to secure. But they finally made an offer on a home in nearby Andover, and they are just beginning to consider a kitchen rehab.
She says she later learned that they were not the highest bidder on their Andover home. Instead, she says, she heard that the owners rejected the highest bidder because he intended to turn the home into an unhosted short-term rental.
Garvey names one simple difference between hosted and unhosted: control.
There is no control over the guests' behavior when it is unhosted, she says, citing some complaints - including noise and lack of upkeep - that she has heard from her former Chester neighbors.
Though the Garveys currently do not host STR guests, she says that when they did, “You would think that our guests were our personal friends or family.”
A home to live in, and supplemental income
Polly Montgomery and her husband Ian host short-term visitors in their Stone Village home in Chester, living in the attached home behind the stone house that they extensively rehabbed to accommodate paying guests, but mainly friends and family.
She's a proponent of short-term rentals such as hers.
“When people buy a building for [short-term rentals], they'll fix it up and take care of the yard, and make everything look so much better than some of these rundown rentals,” she says.
“When we bought this house, the front stone house was another dwelling, and that was a [long-term] rental, and it was in horrible shape,” Montgomery says.
Even Chester Planning Commission member Peter Hudkins maintains a short-term rental. It's his late mother's home, near his own, and he has been keeping it going to preserve it for the next generation of his family.
“People think that short-term rentals are just these developers, but a lot of them are homeowners who need money because it's expensive to live here,” says Maas, of the Vermont State Housing Authority.
For almost 10 years, Maas has helped people build accessory dwelling units (ADUs). “They're not just rich folk from out of town who want to make even more money,” he says. “But they are middle class, more often than not, getting close to retirement age and wondering how they can stay in their home.”
Maas also emphasizes the importance of tourism for the state.
“You want to see businesses closing? Restaurants closing? If we don't have people coming into short-term rentals, our state will face a much worse fate than its housing issues,” he says. “Our economy would not survive without the tourism.”
The upside to STRs is that they bring in tourists to frequent Vermont's shops and restaurants and keep people working in maintenance, housekeeping, and lawn care jobs. But it can also make it harder for those same workers to find nearby affordable housing.
One resident involved in the short-term rental support industry, who asked for anonymity because of their position, has struggled to find an affordable home to buy.
They would only say, “I do feel like Airbnb's are contributing to this affordable housing crisis but also feel like there's a lack of higher wage opportunities. Maybe the out-of-state hosts is a symptom of this bigger picture. No easy answers - it's very complex considering Vermont's values.”
“At least three [...] people who have worked for me have struggled to find housing,” says Charlie Rimer, who works for a ski shop in Ludlow. “One guy is kind of couchsurfing, until he can get a tiny house built, hopefully, before winter. A couple other friends were given their 60-day notice and had to get out, and ended up in Claremont, [New Hampshire].”
Already pinched by the inflated real estate prices of life in Vail, a resort town, many blame Ludlow's dearth of affordable housing on its explosion of short-term rental businesses.
'Hollowing out the community'
But ski mountain housing doesn't address the immediate problems or the future ones within rural communities like Chester, Grafton, Andover, Londonderry, Windham, and Weston.
Kathy Giurtino, a resident of Chester's Stone Village, says she grew alarmed when guests of a nearby unhosted STR wandered onto her back field.
Her first thought was liability. “If they step in a woodchuck hole and break a leg, or if they get too close to the riverbank where it's caved down [...] who are they going to sue? They're going to sue me,” she says.
She adds that she hates No Trespassing signs, but “we're at the point now when we're thinking we're going to have to put them up.”
Two other residents who contacted the Telegraph about their personal adverse experiences when dealing with guests at unhosted neighboring short-term rentals decided they did not want to speak on the record.
Among the issues they cited as reasons to regulate short-term rentals:
• Increased noise and traffic due to larger groups renting the houses.
• The possibility of repeated rentals by large groups overtaxing septic systems in rural STRs which could have an impact on neighbors' wells.
• Fire safety issues with overcrowding and inexperience with fireplaces and wood stoves.
• Ignorance of - or just plain ignoring - the local laws, including parking, leash laws, burning of trash, use of ATVs on public roads.
Giurtino sees long-term consequences of unhosted short-term rentals.
“Joe Blow and his family that want to live here, they can't do it,” she says. “It's deteriorating the entire affordable housing market. [...] If these houses are going to be sitting empty, except when a short-term rental comes in, you're hollowing out the community.”
“Given the problems that Vermont has with affordable housing, if they allow these unhosted short-term rentals to continue, they're cutting their housing market off at the knees,” she says.
David Lewis, of Windham, agrees, and he believes that unhosted short-term rentals are “stretching the idea of residential zoning.”
“As a landowner, I understand that people say 'you can't tell me what to do with my property,'” he says. “But you are already being told what to do.”
“If you are renting out a place on your property, and you live there, that is different,” he continues. “Unhosted? That's a business.”
Lewis fears the loss of a functioning rural community that depends on its full-time residents to run town government. When you no longer have that “actual community” because of so many unhosted STRs, he says, “you lose volunteers for the fire department and other services you need.”
Like Garvey, Montgomery agrees that unhosted short-term rentals can be problematic.
“We're there on site, and I think that makes a huge difference in this whole [...] situation,” she says.
Says Giurtino, “The hosted rentals, I don't see those as a problem at all. They rent out a guest cottage, or maybe it's a duplex and they rent out one side, or they have a couple of rooms they rent out.”
“But the people live there, so they aren't taking anything away from the community,” she says.
The Vermont Housing Needs Assessment found that nearly 18,000 of Vermont's rental households were at a high risk of eviction because of housing costs, and that low-income housing stock in Windsor County would increase by only 20 units through 2025. Windsor is the fourth-most-populous county in the state with 58,000 residents, while Windham County ranks fifth with 46,000.
Meanwhile, 52% of Vermont's largest multifamily buildings of 50 units or more are located in Chittenden County, home to a quarter of Vermont households and 169,000 residents with about 90% of new homes to be built there through 2025.
The Windham & Windsor Housing Trust has proposed to build 30 new apartment units in the town of Windsor and the organization has 27 units under construction in Bellows Falls.
Maas, of the Vermont State Housing Authority, points to the wealthier ski resorts. “The mountains, I think they need to create housing. They pack people in sardine-can apartments to be lift operators and such [...] they should be required to house them. Ten years from now, you'll be making a profit on those houses, right? This isn't a bad investment, but build on it, and you'll be able to attract people to work.”
While it will be helpful, it won't fulfill the housing needs of the future. The state is predicting that by 2025, 79% of existing housing will be owned by those 45 and older.
This trend of young professionals and families forced to compete for less than a quarter of existing housing inventory has persisted for more than five years.
Add to that the growing possibility of Vermont becoming a haven for those seeking to flee the country's impending crisis: climate change.
Major says the Vermont Housing Improvement Program could benefit many renters by helping property owners rehab buildings for long-term renting. Once a homeowner gets a grant and rehabs the building, they have to rent it out at an affordable rate for five years.
Maas also suggested that towns adopt the 1% percent local option rooms tax.
“I would encourage towns to incentivize building accessory dwellings for long-term rentals,” he says. “If there's, say, a higher percentage of the taxes on second homes, like a higher tax rate, and 1 percent for housing, you create housing trust funds out of it - housing incentives.”
Giurtino and others also believe that unhosted short-term rentals need to be regulated. And some see a rental registry as a good place to start, at least to get understanding about the exact number and location of units.
As town governments begin to get a handle on these issues, those changes will likely come.
Following that, the main concern just might be what to do about an oversaturated short-term rental market with those once-lucrative businesses going up for sale or remaining empty - hollowing out the community in another way.