Buying, and selling. The exchange of products, and services, facilitated by a credit card or a debit card. The movement of dollars from my wallet into your wallet, and vice versa. I guess that’s essentially what people are talking about, when they use the term, “the economy”… or the word “prosperity.”
Pagosa Springs appears, on one level, to have weathered the COVID storm pretty well, so far. At yesterday’s Town Council meeting, Town Manager Andrea Phillips announced that sales tax collections continued to be higher than expected, in June and July. The Town Budget, approved last December, estimated the collections in July at $305,000; the actual collections are reported to be $368,920 — about 21% above the expected collections.
That puts the Town’s sales tax revenue about 17% above the expected dollar amount so far this year. Whoever is selling things in Pagosa seems to be doing an unexpectedly fine job of it.
For the month of July, some of the unexpected sales may have been to tourists. At the same meeting, Tourism Director Jennie Green noted that Lodgers Tax collections were also higher than expected in July — coming in at $116,202, which is the largest monthly collection of Lodgers Tax ever by the Town government, and 31% higher than July 2019.
Of course, a lot of unexpected things have been happening in 2020. Some employees in town this summer, for example, collected more money weekly from unemployment claims than they had been making in wages, thanks to the federal CARES Act. Those windfall unemployment payments ceased at the end of July, however, and I have no idea how many working class families are now struggling to pay their rent.
Unemployment in Archuleta County dropped from 11% in June to about 7% in July — still the highest level of summertime unemployment since 2013, but maybe acceptable? Considering everything?
The real estate website Zillow shows 202 residential homes on the market this week, and describes the housing market here as “Very Hot” — compared to neighboring La Plata County, which is listed as “Warm” and Denver, which is “Cool”. Other real estate sites show around 250 homes on the market, when you filter out vacant land and multi-family properties.
There was a time, not so long ago, when a Google search for “Pagosa Springs Real Estate” brought up a results page full of local real estate companies… rather than national companies like Zillow.com, Trulia.com, and Realtor.com — and in fact, when I did a search this morning on Google, several of those local companies were still on the first page of results. When I did the search on DuckDuckGo (my preferred search engine) the first four listings, plus two ads at the top of the page, were national websites rather than local companies.
We will note that a “Very Hot” real estate market, as Zillow uses the term to describe Archuleta County, indicates a “Sellers Market”… the demand outstripping the supply, and sellers typically getting top dollar for their homes. Part of the reason the housing supply in Pagosa Springs is — shall we call it, “insufficient”? — goes back to the financial devastation that took place here during the Great Recession. We all remember that event, I guess. In the first decade of this century, we had dozens of Pagosa construction companies furiously building homes of (inconsistent?) quality — well over 200 new homes annually. By 2012, the number of homes built each year had dropped to less than 40 per year.
The federal government spend billions bailing out big national banks and mortgage lenders, but for the most part, local Pagosa construction companies didn’t benefit from the help, and many went belly up. The median value of residential property in Archuleta County actually dropped, for a few months.
Then a strange thing happened. Hundreds of those momentarily-affordable residential homes were snapped up and converted into mini-motels… Short-Term Rentals… vacation rentals connected with national websites like AirBNB.com and VRBO.com.
I use the word “strange” because nothing like this had happened before in Pagosa Springs… a mass conversion of homes into motels. Our elected leaders stood by, with their hands in their pockets, and watched the mass conversion take place. They’d never seen anything like it, and had no idea what to make of it. Seemed like a great thing, perhaps? More places for tourists to stay? Increased Lodgers Tax collections?
During a Pagosa Springs Town Council work session back in February, our local Audubon Society gave a fascinating presentation to the Council about the benefits of protecting the “wetlands” in our community. Mayor Don Volger thanked the club members for their willingness to share information with the Council… and then introduced the next work session topic:
Short Term Rentals. STRs. Vacation rentals.
Town Manager Andrea Phillips kicked things off by distributing a one-page summary of “Arguments for/against Allowing and/or Regulation of Vacation Rentals”. Many of the main arguments — for and against — that we’ve heard at various Town and County discussions over the past several years were concisely summarized in Ms. Phillip’s handout.
A short excerpt:
Arguments for Vacation Rentals (No/Limited Regulation)
- Provides job opportunities/positive financial impact locally (property managers, property owners, realtors, cleaning companies, construction/rehab of units to turn into rentals)…
- Provides alternative stay option to hotels and bed & breakfasts. It is a trend that visitors enjoy…
- Private property rights should permit people to do what they want with their properties…
- People are buying up older homes/units to rehab them ad fix them up to make into vacation rentals, thus improving the stock…
- Vacation rentals create a stronger market with higher prices resulting at the time of sale, which can be a help to locals selling their homes…
- Like hotels and other lodging establishments, vacation rentals provide an opportunity for people to see and experience Pagosa Springs…
All valid “for” arguments. STRs do indeed create job opportunities. They do indeed provide lodging options, and are indeed a trend, internationally.
Americans do indeed value property rights — in some situations. And the STR industry has certainly helped to bring about higher home prices in Archuleta County, according to everything I’ve heard from local realtors. And it’s also true that a tourist economy functions to attract and serve tourists.
All valid arguments. But every argument has at least two sides. The job of our elected leaders is to weigh each argument and make a decision that will help achieve the community’s long-term goals.
Ah, yes. Long term goals.