Read Part One
We are hearing, this week, about a climate disaster taking place in Texas — Texas being, incidentally, the primary reason for Pagosa Springs’ very existence.
As of 10:30pm on Wednesday night, just under 1.9 million customers in Texas were still without power due to freezing cold and snowy weather. Nearly 7 million people have been told to boil tap water before consuming it, after the deadly winter storm caused power blackouts at treatment facilities. Freezing temperatures have also caused water pipes to burst, despite attempts by homeowners to insulate them from the cold using blankets.
The state’s energy grid was overwhelmed by a surge in demand, as people tried to keep warm in some of the coldest temperatures in more than 30 years… hitting 0 degrees Fahrenheit earlier this week.
The storm has resulted in at least 24 deaths.
“This is the winter version of Hurricane Harvey,” Texas Governor Greg Abbott told a Texas news station. “And we will learn from this also, and we will come up with strategies to make sure there are available sources of power and energy so that things like this do not happen again.”
More than a few Texans have, no doubt, been considering a visit to their second homes in Pagosa Springs — where temperatures have been similar, but where the power and water infrastructure, and the community, are well adapted to winter weather. My lights flickered for a few moments the other morning, but other than that, our recent storms have been nothing more than an excuse to exercise my snow-shoveling muscles.
Many of our local second homes, over the past decade, were purchased with the understanding that they could also generate a sizable income stream — functioning as vacation rentals whenever the owners were living back home in Phoenix or Dallas. The home-buying frenzy increased during 2020, according to reports by local realtors. We posted one such report earlier this month, by one of the community’s leading realtors, Lee Riley. He wrote:
If you are selling, you are in the catbird seat licking your lips. Buyers are hungry and looking for something to buy with not much left on the shelves. There’s a lot of pent-up demand. As a Realtor, we have plenty of buyers sitting on the sidelines waiting and hoping for new properties to hit the market. The difference from a year ago is increased prices and multiple offers, typically with escalation clauses. I recently sent out three mailers begging for new listings. A year ago, I had 16 homes and condos available. Currently, I only have one.
Plenty of buyers, waiting and hoping.
These may not be buyers who actually want to live full-time in Pagosa Springs, however, and are even less likely to be buyers who want to work at paying jobs in Pagosa Springs.
Nor are the homes snapped up by wealthy Phoenix or Dallas residents likely to become available as long-term rentals to serve our Pagosa workforce. Second-home owners typically want their house to be available whenever they feel like coming for a visit — for a week or two? — and long term rental agreements do not typically allow for such flexibility. But vacation rentals fit the “visit whenever I want” model perfectly. When you’re back in Dallas, the house can be available as a rental. When you want to visit Pagosa, the house can be conveniently empty and waiting.
In Part One, we shared a few quotes from an anonymous letter, emailed to the Daily Post a few days ago, that describes the joys of vacation rental ownership. Apparently, a vacation rental owner can even imagine that he is a ‘member of the Pagosa community’ while maintaining a primary residence in Scottsdale or Houston.
Our local governments — the Town of Pagosa Springs, and the Archuleta County government — have been tip-toeing around the vacation rental crisis, placing none of the restrictions that we’ve seen put in place in numerous other tourism-centric cities like Durango, Salida, Telluride, Denver, and Boulder.
In Durango, no more than one vacation rental can be approved per city block.
In Salida, no more than 3.5% of the residential housing in the city may be converted to vacation rentals.
In Telluride, vacation rentals are allowed anywhere in town, but are limited to no more than 29 total days of rental activity per year.
In Denver, short term rentals are permitted only if the homeowner is a full-time resident of the house, renting out a room or a portion of their house.
Boulder has a requirement similar to Denver’s:
The rental property must be the owner’s principal residence; principal residence is defined as the dwelling unit in which a person resides for more than one half of the year. The name on the license must be the same as the name on the deed for the property, the owner must be a natural person, trust, or a nonprofit organization.
Here in Archuleta County — while our local government leaders have allowed the housing disaster to unfold, unchecked — we’ve watched our home prices skyrocket, our workforce housing disappear, and our residential neighborhoods become poorly-supervised lodging complexes.
Even before the sudden explosion of vacation rentals in Pagosa, following to the arrival of AirB&B and VRBO and the other vacation rental website services, about 40% of the residential housing in Archuleta County belonged to people who didn’t live in the community. Given the relatively small number of long-term rentals available, we could easily assume that the majority of these houses were “second homes.”
That’s the general conclusion reached in a 2016 study performed by Region 9 consultant Donna Graves, which you can download here.
Government allowance of unlimited vacation rentals have made it even easier to afford a second home, because it can now be rented out like a monstrous motel room. That’s driven up the price of real estate, with no end in sight.
Will the Archuleta Board of County Commissioners please stand up?
Or even… the Realtors?