A small-business owner in a tourist town who advocates for a tax increase on visitors is an outlier in his support for a tourist tax increase. Marcee Lundeen, on the other hand, sees few alternatives.
As she prepares her restaurant along the main drag of this famed mining town located at 10,000 feet between clusters of ski resorts for ski season, she says she will have difficulty hiring employees since few people can afford to live in Leadville anymore.
A banner in the window supports a ballot issue that will be on the ballot on Tuesday that would impose a 3 percent tax on tourists who stay in hotels, motels, and short-term rentals, with the proceeds going toward the creation of additional affordable housing. “I have a number of prospective workers that are unable to work with us because they do not have a place to reside.” “It served as a motivational aspect,” she said.
It is one of almost a dozen initiatives that will be on the ballot in Colorado to address the state’s increasing housing crisis, which predates but now resembles the situation in hundreds of municipalities around the country. A number of other counties and cities, particularly in the West, are considering placing similar proposals on the November ballot, as housing supply remains limited and prices remain high in the face of rising demand.
Housing shortages have been exacerbated by years of delayed construction, labour and supply issues, and the emergence of short-term rentals such as Airbnb, all of which have disappointed first-time buyers, squeezed renters, and contributed to homelessness.
During the coronavirus epidemic, migration patterns have exacerbated the situation in certain locations as people flee from more costly cities to less expensive ones, driving up costs as they alight in search of the next Trader Joe’s store. According to the National Association of Realtors, the median existing-home price in September was $352,800, representing a 13.3 percent gain over the same time last year and the 115th consecutive month of year-over-year growth in the sector.
However, while the Biden administration is requesting billions of dollars in rental assistance and housing funding in its massive economic policy bill, the federal government has mostly stayed out of the problem for years, leaving it to states, localities and even individuals to step up and address the issue.
Short-term rental taxes are being considered by voters in three Colorado cities this week, with the proceeds going toward new housing initiatives. In addition, voters in Vail and Crested Butte, high-end resort towns, will decide whether to approve a sales tax, with the proceeds going toward new housing initiatives, as well as other initiatives.
There is just one issue on this week’s ballot in Lincoln County, Oregon, and it would force the phase-out of short-term rental dwellings in unincorporated residential areas, among other requirements for these types of properties. Other cities are considering similar steps to reign down the popularity of short-term rentals such as Airbnb, which they fear are driving inhabitants out of long-term housing.
However, at least as many proposals have been driven by residents fired up with the housing scarcity as have been proposed by Democratic-controlled administrations. Some Republicans have introduced legislation to combat the growth of homeless encampments in large urban areas, which they hope would discourage the practise. The chairman of the Denver Republican Party, for example, has filed legislation to tighten camping restrictions in the city to reduce the number of homeless persons who set up camp in various locations across the city.
Residents of Lincoln County, Oregon, who support the proposition also point the finger at short-term rentals as a contributing factor to a scarcity of suitable homes. Housing was in such short supply in certain parts of the county last summer that a local hospital urged locals to rent out their houses to nurses and other medical personnel. Large houses have been built or purchased in the county, as has been the case in many cities and resort towns, and then converted into short-term vacation rentals for vacationers at a rate far greater than the rate at which modest homes have become available for full-time residents earning lower incomes.