‘Horribly imbalanced:’ How short-term rentals affect housing in Utah’s tourism-driven towns

Short-term rentals create a Catch-22 in some Utah towns, an expert said, because they help expand tourism but limit housing supply and affordability.

(Bethany Baker | The Salt Lake Tribune) Skiers walk through Canyons Village in Park City on Friday, Feb. 2, 2024. The area has several licensed short-term rentals, according to a Summit County official.

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After the pandemic, Jennifer Schaerer said she planned to invest in property in Kanab to list as a short-term rental.

After some research, weighing the personal economic benefits with the possible effect on the community, Schaerer and her family changed their mind.

“Our community is horribly imbalanced,” Schaerer said, adding the family now is considering investing in and listing an accessory dwelling unit — a secondary rental room on the same lot.

Short-term rentals account for millions in business in Utah a year – about $130 million for Airbnb hosts alone in 2019, according to the company. But with the money has come concerns.

In some communities, neighbors complain that renters in short-term units sometimes leave behind messes, or that rental units displace permanent residents.

Schaerer said she worried about how flipping a house into a short-term rental can “completely change the face of the community,” because such a listing “takes a normal homeowner out of the voting pool.”

(Jennifer Schaerer) The Schaerer family moved to Kanab from Draper in 2021. They considered investing in other properties to turn them into short-term rentals but decided an accessory dwelling unit would be less harmful to the community.

Tamra Hamblin, who lists half a duplex in Ogden, said she focuses on managing her listing well, so there aren’t too many cars or too much loud music, or anything that would trouble the neighbors.

The number of dwellings that are rented out in the short term — for a day or a week, as opposed to apartments that are leased by the month — has exploded in Utah, with around 10,000 listings added statewide in the past five years, according to one tourism expert.

With that growth, residents, officials and experts say they are concerned about oversaturating their communities with tourists making brief stays — and balancing the needs of full-time residents with those of the tourism industry in their cities and towns.

Short-term rentals are an important part of the state’s tourism economy, said Jennifer Leaver, a senior tourism analyst at the Kem C. Gardner Policy Institute, because they offer visitors a choice that often has more privacy than a hotel, and access to extra amenities like a backyard and full patio.

Leaver’s colleague, Gardner research fellow Dejan Eskic, who focuses on housing, said for Utah’s rural and remote towns, short-term rentals present a Catch-22: They’re crucial to the tourism industry’s critical infrastructure in some parts of Utah, but they make it harder to find housing people can afford.

In some Utah counties — particularly ones near ski resorts, hiking and national and state parks — short-term rental listings represent 15% or more of the housing stock.

(Bethany Baker | The Salt Lake Tribune) A woman walks through Canyons Village in Park City on Friday, Feb. 2, 2024.

One of those counties is Summit County, where one official said they are still trying to get a handle on the numbers of such rentals and what they’re doing to the economy. County officials also are delaying any move to regulate the practice while they wait for state lawmakers to act.

Grand County, another place more saturated with short-term rentals, leaders decided to change land use rules to “save neighborhoods” and limit listings in some areas, said Mary McGann, a member of the Grand County Commission.

There’s a time and place for short-term rentals, said Cameron Diehl, executive director of the Utah League of Towns and Cities.

In the end, he said, it comes down to balancing property rights, community expectations and how the rentals affect the area.

Utah added 7,000 short-term rentals in two years

As the coronavirus pandemic changed the way people travel, short-term rental listings surged across the country.

In Utah, there were 7,005 more short-term rentals in 2023 than in 2021, based on numbers Leaver analyzed and provided from Transparent. She said a few thousand more were added in the years before the pandemic.

Most of that growth in rentals, and most of the listings in general, are in three counties: Salt Lake, Summit and Washington. Those counties had a combined 60.4% of the short-term listings in 2023 and accounted for nearly 58% of the growth in listings statewide from 2021 to 2023.

The effects of short-term rental growth, though, have not been equal across counties, Eskic said.

Summit County — known for the ski town of Park City — has the most listings of any county in the state, and the greatest saturation, with 21.7% of the county’s housing units used for short-term rentals.

Short-term rentals also make up more than 10% of the housing units in northern Utah’s Rich County — where Bear Lake State Park is — and the southern counties of Garfield, Grand and Kane, all of which contain parts of Utah’s “Mighty 5″ national parks.

The listings are “absolutely impactful” to housing affordability in those areas, Eskic said.

It isn’t clear how much, though. Researchers haven’t measured the incremental effect as short-term rentals make up more and more of an area’s housing supply, he said.

Aside from Summit County, the counties in Utah with the most listings are not the most saturated.

For example, Salt Lake County has the second-highest number of listings among counties in Utah – but, because it’s the state’s most populous county, those listings represent less than 1% of the county’s total housing stock.

And, because Salt Lake County property owners can shift those listings easily to long-term rentals or go on the market for sale at some point, Eskic said, the potential repercussions of such short-term rentals are not as severe.

Statewide, short-term rental listings comprise just 1.8% of the housing units statewide.

A ‘significant’ revenue source in some counties

Eskic called short-term rentals “a symptom of a much bigger problem,” not the problem themselves.

“About half the time, something wouldn’t have been built for regular housing because it doesn’t make the same premium as a short-term rental,” Eskic said.

Even if short-term rentals were the problem, you “can’t outlaw them overnight” without decimating local economies, Eskic said.

The listings are a “pretty significant source” of transient room tax in northern mountain counties, like Rich and Summit, as well as the southern Utah counties like Grand, Kane and Garfield near the “Mighty 5,” Leaver said.

The Utah State Tax Commission doesn’t split figures on transient room tax by the type of accommodation, Leaver said, but there are conversations about developing a model to do so.

(Rick Egan | The Salt Lake Tribune) An aerial photograph of Rim Village townhomes in Moab, Wednesday, Jan. 31, 2024.

Leaver said if the $130 million earned by Airbnb hosts increased by the same amount as listings, those hosts would have earned close to $200 million in 2023 – around $10 million in transient room taxes statewide. She stressed those numbers are very rough and conservative estimates.

In tourism-dependent counties, such as Grand and San Juan, those lodging taxes matter a lot, said Elaine Gizler, the director of economic development in San Juan County, who previously held the same role in Grand County.

Coming in at somewhere between $1.1 million and $1.5 million annually, transient room taxes were 25% of San Juan County’s overall tax revenue in the past three years, according to the county’s 2024 budget.

Without transient room tax revenue, residents would have to pay additional taxes to cover the county’s new hires, gas to fill up county vehicles, infrastructure for road maintenance and other costs, Gizler said.

“As much as people don’t want overnight rentals, you have to have a certain degree of them in order to help offset and bring in revenue,” she said.

Host: Management is key to neighborhood experience

There are people who don’t want overnight rentals.

Jennifer Long-Pratt has lived near Salt Lake City’s Liberty Park for more than two decades. When she first moved in, her neighbors were older people, mostly, but the neighborhood has changed over time.

Short-term rentals, she said, have been a change for the worse.

Most of her annoyances are minor, Long-Pratt said — problems finding parking, cars speeding down the street, leftover trash or an electric scooter sitting in front of one of the houses for a week — but they add up.

“You wouldn’t behave in these ways if you actually lived there,” she said.

Utahns who responded to an unscientific survey also detailed gripes about traffic, noise, large parties and, as one reader put it, “displacing community members in favor of visitors.” But more people who gave their opinions were neutral or even positive on the topic of short-term rentals.

In almost three years of listing half of the duplex in Ogden, Hamblin hasn’t had complaints from the neighbors, including the long-term tenant in the other half. There was one unapproved party, she said, but “as soon as we found out about it, we shut it down.”

Most people who stay in their short-term rental are waiting to move into a newly bought home or are remodeling their place, she said, or they’re working at a ski resort or the Ogden Business Depot.

The key, Hamblin said, is good management, a good cleaner and not allowing parties. “You can’t just set it and forget it,” she said.

(Tamra Hamblin) A view of the duplex Tamra Hamblin partially lists on Airbnb.

Alison Taylor is more concerned about different behavior by some people who list short-term rentals.

Taylor works in a field related to real estate and helped her two children buy homes five years apart. One was a single-family home in Ogden priced at $89 a square foot with a 3.5% interest rate. The other was a townhome in West Jordan half the size but much more expensive, at $260 per square foot with a 6.9% interest rate.

Taylor said she thinks as short-term rentals started going through the roof, many people who didn’t know anything about real estate or hospitality “were basically able to print money for two years.”

Entry-level homes have been “snapped up as Airbnb options,” Taylor said, and she’s not sure there’s a way to undo the damage.

Taylor added that leveraging an accessory dwelling unit — such as a basement apartment, a unit above a garage or a guest house — or similar space for passive income is great but said it’s not what has happened with many short-term rentals.

Nearly all of the rentals statewide — about 93%, based on numbers Eskic pulled from Transparent — are entire homes.

And while about a third of people who list a short-term rental only have one, Leaver said, about a third have more than 20.

Of that group, 15.9% have 100 or more more properties, based on data Leaver provided. Those are almost certainly property management companies, she said.

The remaining third of have between two and 20 listings, with most having two to five properties listed as a short-term rental.

A tale of two towns

The effects of short-term rentals can vary from one community to the next, even in similar towns. Jordon McKee has seen that for himself.

McKee lists a short-term rental near Bear Lake State Park, based around a freshwater lake on the Utah-Idaho border. He lives in a different town in the Bear Lake area that doesn’t allow short-term rentals like they do where he has his listing.

Where McKee lives, which he asked The Tribune to not name specifically, officials don’t want a lot of growth, and they want permanent residents, he said.

“People are still buying homes or building homes, and they’re just second homes,” he said. “And we’re actually losing residents because it’s becoming too expensive to live there.”

The no-listing rule doesn’t just apply to full houses, he said. Residents, he said, can’t rent a room or a separate building on the property to tourists.

In the community with short-term rentals, people are spread out and there isn’t a feel of actual neighborhoods, McKee said. The area is a mix of permanent residents, short-term rentals and second homes, he said, and there’s no street where a full-time resident lives in every single house.

McKee would like to see a hybrid policy, where regulations “allow residents to take advantage of the tourism if they want,” but don’t allow short-term regulation to take over the market.

Utah laws are limiting enforcement

(Rick Egan | The Salt Lake Tribune) Grand County Commissioner Mary McGann at the entrance of Rim Village townhomes in Moab, Tuesday, Jan. 30, 2024.

Utah’s laws make it difficult for local officials to enforce ordinances around short-term rentals, said Diehl with the Utah League of Towns and Cities.

Under Utah state law, local governments are not allowed to stop short-term rental operators from listing properties on such rental websites as Airbnb and Vrbo, and the governments cannot use these sites to find and prosecute unlicensed short-term rentals.

It’s framed as a free-speech issue and applies even in areas where zoning means a short-term rental isn’t allowed. That means regulators must rely on complaints from residents to locate illegal vacation rental properties.

The law also makes it hard to ensure short-term rentals are licensed as businesses, and paying the same taxes as hotels and other traditional lodging, Diehl said.

Local officials also have concerns about safety and welfare, said Tonja Hanson, vice chair of the Summit County Council.

“Right now, there’s no regulation,” Hanson said. “We don’t know if the hot tubs are being checked. We don’t know if there are fire detectors [or] sprinklers.”

Summit County asks for licensing now, she said. Several short-term rentals are licensed, she said, mostly in Canyons Village on the north side of Park City Mountain Resort.

But officials “don’t have a handle on the numbers” across the whole county, Hanson said.

The county has a subcommittee looking at short-term rentals and how they affect the community, but council members are waiting to see what the Legislature does. They would then also have to consider the cost of implementation, Hanson said, including hiring more inspectors and staff in the clerk’s office.

Hanson’s wish list for the Legislature includes removing the statutory barriers to allow counties to locate short-term rentals and identify the problems they may cause.

Grand County has seen success with its regulations, said Mary McGann of that county’s commission.

The commission instituted a zoning overlay giving the county the final say over any new overnight accommodations. That overlay, passed in early 2020, also allows commissioners to consider how new overnight accommodations — including short-term rentals — affect housing supply, economic diversification, community esthetics and more.

Since the overlay went into effect, the commissioners have approved so-called “glampgrounds” offering camping with luxury amenities, such as furniture and ensuite bathrooms, McGann said — but not any short-term rentals.

It’s important to remember that short-term rentals affect different parts of the state differently, Diehl said.

“There are kinds of places where short-term rentals make a lot of sense, and there are also areas where the expansion of the short-term rental industry has had a detrimental effect on housing supply,” he said.

There’s a value to short-term rentals, but officials need to find a balance, Diehl said. The best place to do so, he said, is at the local level.

Megan Banta is The Salt Lake Tribune’s data enterprise reporter, a philanthropically supported position. The Tribune retains control over all editorial decisions.

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