As Utah’s housing affordability crisis continues to be a stated top priority for the state’s political leaders, short-term rentals — like Airbnbs and VRBOs — have been in some policymakers’ crosshairs.
Lawmakers for years have contemplated changes to Utah’s short-term rental laws — some to allow more restrictions and others more leniency — but it’s a moving target as the number of short-term rentals continues to grow.
Past research has shown that short-term rentals eat into less than 2% of the statewide housing market, but they have a bigger impact on vacation areas like Park City, Moab and St. George. Housing experts have stressed that short-term rentals — while they impact some communities more than others — are taking up only a fraction of the state’s housing stock, and they’re just a small piece of the state’s housing affordability crisis.
Still, lawmakers have explored legislation targeting short-term rentals, including possibly enacting higher taxes on the properties. So a Utah taxpayer watchdog group recently commissioned a new report wanting to give lawmakers a bigger picture of short-term rentals’ impact — both on housing and the economy.
Billy Hesterman, president of the Utah Taxpayers Association, told Utah News Dispatch on Monday that he wants policymakers to “look at the whole picture” when it comes to short-term rentals — not just in the housing affordability conversation, but also as economic drivers.
“Short-term rentals are often framed as having an outsized impact on housing supply while only benefiting the relatively few Utahns who own them,” Hesterman said in a prepared statement issued alongside the report. “This couldn’t be further from the truth; the report shows that short-term rentals benefit small businesses, contribute to local economies, and generate needed tax revenue. As Utah grows, it’s important that our elected officials understand the role short-term rentals can play in boosting communities across the state.”
The report released earlier this month concluded that while short-term rentals “continue to be a significant component of Utah’s tourism landscape, their broader impact on housing supply and affordability is relatively limited at the statewide level.”
They account for only 1.9% of the state’s total housing stock, the report said. And even in the communities where they’re the most concentrated, if they were to be converted into for-sale homes, they still “would not fundamentally solve local housing shortages or materially shift affordability for most residents.”
To understand their impact, the Utah Taxpayers Association study tested a scenario: What if the state’s short-term rental properties were converted into traditional residential housing?
“We wanted to evaluate what would happen if all of the current STR stock became available, residential housing,” said Hesterman. “This helps us understand what’s at stake and whether or not STRs are a major driver of supply-side availability and affordability.”
Even if all of Utah’s year-round short-term rental housing units moved to the residential housing market, the statewide median home price would drop by just 0.4%, the report concluded. That would equate to about $2,000 off a $500,000 home’s sale price. And still, less than 1,000 short-term rentals would be affordable for families earning their area’s average income.
In areas where short-term rentals are highest — such as Summit, Grand and Kane Counties — converting them would “dramatically increase inventory; yet these markets often have limited year-round housing demand and unique economic drivers,” the report said.
Hesterman said those areas, while they have housing challenges, also “benefit greatly” from their short-term rental availability and the tourism dollars they bring. He said any changes like increased regulations or higher taxes on short-term rentals would likely not “have the impact people hope” while the “status quo is producing really good results for those areas.”
As for Utah’s largest and fastest-growing urban counties, the report said short-term rentals “represent a negligible share of housing stock, and their potential conversion to owner-occupied or rental housing would provide only marginal and temporary impacts on housing supply.”
At the same time, the report found that short-term renters generate a significant amount of tourism dollars, totaling $1.19 billion in direct visitor spending in 2023. Additionally, the report found they’ve led to an estimated 10,200 jobs across the state.
Tax wise, short-term rentals have generated an estimated $35.8 million in usage taxes, which the report said accounts for more than a third of statewide collections for hotel and other temporary room rentals. Plus, short-term rentals generated about $181 million in property tax revenue last year.
“This research makes it clear,” Hesterman said. “Eliminating short-term rentals would do almost nothing to solve Utah’s housing challenges, but eliminating their significant benefits to tourism and small business-based economies would create revenue shortfalls and other problems for communities across the state.”
Hesterman said he thinks lawmakers should continue focusing on incentivizing more affordable housing types rather than “punishing or regulating” the short-term rental market.
“Let’s look at other options. How do we increase the supply? How do we look at making construction more affordable in the state and making sure our future families do have somewhere to live at an affordable cost?” Hesterman said. “There are a lot of options to consider.”
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