This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and Vermont Public.
A new data analysis by the Vermont Housing Finance Agency found the number of homes listed on platforms like Airbnb and VRBO has grown rapidly over the last several years, following a brief pandemic downturn.
In September, Vermont saw the highest number of active short-term rentals out of any month on record: 11,747, a 16% increase relative to the same month last year, according to VHFA’s data analysis released in late October.
As the industry has boomed, more and more towns are grappling with short-term rentals’ impact on the availability of year-round housing – and debating approaches for how to track and regulate them. Meanwhile, short-term rental industry advocates argue towns, and the state, should gather more data before imposing restrictions.
The finance agency’s analysis shows that the number of active short-term rentals statewide has increased markedly over the last three years. The agency purchases private data from AirDNA, a site that aggregates rental listings from platforms like Airbnb and VRBO, and looks only at full-unit rentals, rather than partial-units such as a bedroom in a home.
Ski towns have the highest number of these rentals, according to VHFA’s analysis: Stowe, Killington, Ludlow, Dover, and Warren were the top five. Stowe, a town of a little over 5,000, had close to 1,000 active short-term rentals as of September.
The amount of Vermont’s housing stock used for short-term rentals is relatively small. According to VHFA, these rentals account for about 3.6% of the state’s total housing stock. About 16% of Vermont homes are seasonal or vacation homes, according to the U.S. Census Bureau.
Because data on short-term rentals and information on seasonal and vacation homes come from different sources, it’s difficult to deduce how they map onto each other, said Nate Lantieri, research coordinator at VHFA. The agency also lacks data on how properties have historically been used, making it hard to track how many long-term units might be flipping to vacation use, and how the increasing number of short-term rentals might impact the year-round rental market.
But even slight shifts can have an outsized effect when the year-round rental market is extremely tight, Lantieri said.
“When we’re looking at these really small vacancy rates across the state, any one unit that’s being taken out of year-round rental for potential short-term rental – it creates more pressure on the low vacancy rates already,” Lantieri said.
As the number of short-term rentals has shot up, so has the revenue they bring in, according to VHFA’s analysis. In February, average monthly revenue for these units surpassed $5,000 for the first time. As of September, average revenue had dipped to a little over $4,000 a month.
While the majority of short-term rental owners are Vermont residents – and have just one unit – some might see the industry as an investment opportunity, Lantieri said.
“There are also people that see the numbers and say – that’s the market that’s potentially really lucrative,” Lantieri said.
Towns consider regulations
Ted Brady, executive director of the Vermont League of Cities and Towns, said “there are at least a dozen” debates over local short-term rental rules underway in towns across the state, with many communities citing these rentals as part of larger concerns around housing availability and affordability.
“It’s basic math – there are units of housing that people are living in for weekends instead of for the year,” Brady said.
Many towns are in the midst of updating their zoning bylaws and town plans to comply withrecent changes in state law aimed at encouraging denser housing development. And for some towns, debates around approaches to short-term rentals have cropped up during that process.
After a local report that found short-term rentals contributed to rising housing costs and declining availability of year-round rental housing, Londonderry’s select board is considering limiting the number of these rentals a property owner can have. Chester has placed a six-month moratorium on all new short-term rentals where the host does not live onsite, as the town develops new rules. Dover has discussed contracting with a third-party registration company that could help manage complaints about noise or overcrowding, said Eric Durocher, the town’s economic development director.
The League recently issued some basic information to towns considering short-term rental rules. The guidance summarized the array of options available – from registries to residency requirements to limiting where such rentals can be located – but it refrained from giving more specifics on how to regulate the industry. Brady said the organization will wait to see what further questions town governments have.
At a short-term rental industry expo held this week in South Burlington, Julie Marks, founder and director of the Vermont Short Term Rental Alliance, expressed concern that the town-by-town patchwork of rules lacked coordination and could take a toll on Vermont’s “visitor economy,” lowering tourist spending and state revenue via the meals and rooms tax.
The group has advocated for a statewide short-term rental registry to gather more data before enacting additional regulations. State lawmakers have previously pushed to require short-term rentals to register with the state as part of a broader rental registry, but Gov. Phil Scott opposed the measure.
Marks argued that short-term rentals should not be “scapegoated” for Vermont’s housing shortage.
“The only thing that is going to really make a dent in our housing situation right now is if we build more housing,” Marks said. “The only thing that’s really going to take away the focus on short-term rentals – and wasting all of these resources focusing on an aspect of the housing and tourism economy that just won’t move the needle – is for there to be a fix and a correction to the housing market.”
Lantieri, from VHFA, acknowledged that short-term rentals are likely not the biggest factor squeezing Vermont’s housing market, but said shifting units away from long-term use could add continued stress.
“Any additional pressure that is taking units out of that market is going to feel like additional downward pressure on people trying to find housing,” he said.
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