I recently received a spam email from Pagosa realtor Chris Liverett, the owner of Sherpa Real Estate, inviting me to view a YouTube video featuring one of his associate brokers, Matt Martin. On YouTube, the video bore the title:
“The Truth About STR’s”…
…but the link in Mr. Liverett’s spam email looked like this:
As we all know, “Truth” can mean different things to different people. Just as “Data” can mean different things to different people.
Mr. Martin had obviously obtained a copy of the new ‘Short Term Rental Fee Study’ written by Denver-based Root Policy Research and presented to the Town of Pagosa Springs earlier this month. The study was discussed, at some length, at the December 6 Town Council meeting, and was also discussed (also at some length) in a recent Daily Post editorial series.
Some folks might see the Root Policy study for what it is: an attempt by some intelligent people, who know relatively little about Pagosa Springs and its economy, to suggest a municipal fee on Short-Term Rentals (STRs, vacation rentals) that could be successfully defended in court, in case the Town were sued. Root Policy took a two-pronged approach to developing their suggested fee. They looked, first, at a likely number of residential homes that once served working families and individuals in Pagosa Springs, and estimated how many have been lost to the Long-Term Housing market, as the result of homes being converted into tourist lodging.
Root Policy did not calculate or estimate the overall effect on home prices or rental rates caused by those conversions. Instead, they estimated that maybe 16 dwelling units disappeared from the available stock of Long-Term Housing, for every 100 STRs that opened their doors in Pagosa Springs, and calculated an ‘affordability gap’ for those 16 dwelling units, if they had been available to working households. To fill that calculated gap — directly caused by STRs — would justify an STR fee of about $1,500 a year per license.
Sort of a round-about way to generate an estimated dollar figure. But probably ‘supportable’.
The second thing Root Policy looked at was the STR industry’s impacts on the job market. They calculated that the tourists staying temporarily in STR units generate about $9.27 million in annual spending in Archuleta County, resulting in about 175 jobs… with most of the spending done, and most of the jobs created, located within the town boundaries, because nearly all our businesses are located within the town limits.
But only about 124 active STRs are located in the town. Nearly all the community’s estimated 1,250 STRs are located outside the town limits, in unincorporated Archuleta County.
In the YouTube video being marketed by Sherpa Real Estate, some of the Root Policy numbers were carelessly, and unbelievably, inflated by associate broker Matt Martin.
Here are some numbers from the actual Root Policy report:
As we note, here, these are the numbers for “Archuleta County STR Spending”.
These are not numbers for “The Town of Pagosa Springs STR Spending”. As you would understand, if you had read the report carefully.
Here’s the next ‘figure’ in the report.
This graphic shows the types of employment Root Policy assumes are generated by “STR Visitor Spending” in “Archuleta County”. Once, again, this is not in “The Town of Pagosa Springs”. The number of jobs generated within the town limits is estimated at 124, with the remaining 51 jobs located outside the town limits. A total of 175 jobs, created by the STR industry, in Archuleta County. And about $9.27 million per year in annual tourist spending, in Archuleta County.
Rough estimates, of course.
In his YouTube video, associate broker Matt Martin offers us the following graphic, which appears to be a composite of the two Root Policy graphics shown above. With a bit of added text…
We then hear Mr. Martin make the following claims in his YouTube video:
According to Root Policy Research… there’s 124 active rentals in the town of Pagosa Springs. These 124 rentals generate $9.27 million in economic input within town limits, and create 175 jobs.
Oooops. Associate broker Matt Martin is confused. The 175 jobs are created in “Archuleta County”. Only 124 jobs are created within the town limits, not 175.
And the $9.27 in spending results from 1,250 STRs in the entire community, not just within the town limits.
Mr. Martin, in a state of confusion, then makes the mistake of multiplying these jobs and this spending by a factor of ten — because he mistakenly thinks Root Policy did not include the county STRs in their numbers.
Most of the STRs are located out in the county, but they were already included in the Root Policy calculations, as was made clear during the December 6 Root Policy presentation at Town Hall.
Quote from the video, based on Mr. Martin’s mistaken understanding, and thinking that the Town STRs, alone, generated all that money and all those jobs:
To put it another way, one STR creates $75,000 in economic activity and creates 1.4 jobs. But what about the county as a whole? They weren’t included in this study… so I decided to take these numbers and apply them to every STR in the county…
Apply that to the 1,250 STRs [in the entire community] and we’re looking at over $100 million that STRs contribute to our local economy, while providing 1,760 jobs for our locals.
Oooops. $9.27 million in the Root Policy report has magically become $103 million in Mr. Martin’s overactive imagination. 175 jobs in the Root Policy report has magically become 1,760 jobs.
We’ve often heard the warning, “Don’t do math in public.” More importantly, don’t do math in public — or in a YouTube video — without understanding what the numbers actually mean.
At the end of his video, associate broker Matt Martin switches gears and makes an argument to “raise the Lodgers Tax” and use the funds to support the development of workforce housing. Many communities have done just that, over the past five years, but here in Archuleta County, the only serious attempt to assess higher fees on STRs — for the express purpose of developing workforce housing — was the result of a petition put forward by the town voters, not by our local government leaders.
Mr. Martin and I seem to share the same idea — that STRs and the tourists who rent them could be important contributors, to help us solve a serious housing crisis.
Maybe, working together, we can convince the Archuleta Board of County Commissioners to adopt a similar attitude.