An economic impact study shows big financial benefits of Airbnbs and other short-term rentals. But a city of Brevard group asks if the report understates their downsides.
Ah, lots to unpack here. First – the actual report and its findings. Most people who’ve done any independent research (Google or otherwise) shouldn’t be shocked to find that the economic impacts of STRs in virtually any area are unbelievably positive. So, it’s no surprise the same is true for Brevard. It looks like most of the STR Task Force and City Council members were on board with that finding as it is basically an incontrovertible fact, and arguing to the contrary would only reveal more of their bias. Predictably, their opinions on the report’s findings concerning the effect STRs have on housing prices is where they seem to diverge with the experts they commissioned to study it. Why predictably? Well, because before the study was even conducted, several of those the author interviewed for this piece were publicly clamoring for the regulation of STRs (banning them out right, re-zoning so no future STRs would be permitted, etc.) before they had ANY data presented to them on the matter. They had their minds made up that STRs were the reason behind the “affordability crisis”, and were already offering solutions to a problem that was yet to be supported by any actual data. Don’t believe me? Just do a quick search on this author’s Substack. Or Facebook or Google. Several of these people even made such positions a part of their platform while running for City Council.
The unmistakable irony of the arguments presented in the article border on satire. Aaron Baker is quoted as saying “we should focus on the data rather than some of the analysis and narrative that is built around it.” Ignoring his own advice, he provided his own analysis that the correlation between the median sales price and the number of active STRs was “pretty high” at .71, and introduced the narrative that such correlation is “the opposite story of what they are saying” in the report. Mr. Baker’s analysis and narrative that this is “pretty high” may or may not be correct. Without writing a treatise on the matter, whether correlation is “strong” can vary from field to field. I’m not an expert on housing prices and the impact of STRs on them, so I won’t opine as to whether .71 is “pretty high.” Those conducting the study presumably are, which is why they were hired, so I’ll defer to their analysis of the matter – something those interviewed refuse to do because it is in direct contradiction of the propaganda some of them have pushed for two years or more now.
Baker’s own analysis is that there is high correlation here, and the analysis of the experts is off. But after securing a report on my own (it was neither provided by the author, nor was it directly quoted), I can confirm the report never concludes that there is low correlation between housing prices and the number of STRs in the county. Instead, the report says, “[w]hile there is a positive correlation between the median sales price and STR active listings, … there is limited evidence of causation between STR active listings and housing prices.” See page 21 of the report. Baker’s own analysis (in which he urges us not to engage) that the analysts “pass[ed] that off as not that big a deal” appears to confuse correlation with causation. Baker ignores the fact that just because there appears to be a relationship between housing prices and the number of STRs in the county, does NOT mean that one causes the other. This is Statistics 101. So, while there may be some sign of a positive relationship between the two (as the report clearly concedes), it does NOT follow that the presence of STRs directly causes housing prices to rise.
The report also indicated that there were six other factors which were determined to impact housing prices to a greater degree than the number of STRs. The author only mentioned one – total housing units – and did not question any of those he interviewed about any other such factors.
Mr. Baker suggested that “we should focus on the data”, yet the City’s plan is to spend $10,000 to retrieve anecdotal data (“what we’re looking for is that anecdotal information”), which by definition is unscientific data, via a glorified opinion poll from individuals who choose to respond to a survey. If we made policy decisions based off anecdotal data, none of us would have received COVID-19 vaccines, and most would never step foot on another airplane or get behind the wheel of a car. You can’t make this up.
The bias here is clear. Multiple members of City Council, as well as members of the STR Task Force, have gone on record before this study was ever commissioned as wanting to shut down STRs. They engaged experts to study the relationship between STRs and housing prices, and the data doesn’t support the propaganda they’ve pushed, so now they’re pivoting. Now that they know the data does not support the premise that STRs are behind an “affordability crisis” and, therefore, they cannot justify an STR ban on such grounds, they are embarking on a what is a taxpayer funded witch-hunt to secure unreliable anecdotal information about how STRs make people “feel.” These folks have tried relentlessly to shape your opinion of STRs before this opinion for years before this poll was ever suggested. Don’t be fooled, Brevard. Read the report – not the propaganda.
If all the data referenced by the task force members in their discussion and their quotes used in this article are from 2020, I think a pretty significant consideration was missed: 2020 was a disastrous year for traditional hotels / motels. Remember when people feared going into public places? People escaping urban areas to homes in rural mountain regions was a big part of the 2020-’21 Covid boom for STRs in our county.
With that in mind, it’s not surprising that the occupancy taxes collected from STRs in 2020 surpassed the amount generated by “traditional accommodations.”
I think 2022 will be a more interesting year to compare the source of occupancy taxes, as the Covid escape boom is clearly over. Plus the current state of the economy is pushing STR pricing down, demand has softened, and hotels/motels are not scary places anymore.
Is the committee researching short term rentals an objective committee? Are city council members objectively gathering data or have they made up their minds already that short term rentals are bad? Why is it significant to the tourism authority that traditional accommodations' occupancy is down and attribute that to the trend that short term rentals are popular if overall occupancy is steady or even up? Should that organization lobby for traditional accommodations? Who will write and who will receive the survey to provide anecdotal information?
I would not argue that short term rentals are not a factor in housing issues but it's not the only issue. I'd like for to us look at second homes (4000 out of 20000 according to the article), rising constructions costs, the trend in working remotely, wages of teachers/nurses etc and service/retail workers, as well as look forward to announced economic development as factors in rising property prices and a shortage of overall inventory. No one would say let's stop letting people buy a second home here or stop industry expanding to keep house prices down and rent affordable.
If we are really taking an objective look at how to help people who live here and work for $10/hr or even $35,000/year (new teachers) we've got to look beyond the easy target.
These are all great questions, Tracie. Another question not asked of those supporting it: why are we concerned with anecdotal information? As I alluded in my response, can you imagine a world where policies were formulated based on anecdotal information? Various people experienced horrible side effects from the COVID-19 vaccine - I guess we should ban it. My neighbor, a long-term renter, turned his house into a meth lab - I hope the city is looking into ways to re-zone such that long-term rentals are at least limited going forward. My aunt was hit by a drunk driver - I hope the county is at least considering making Transylvania a dry county. There's no logic to any of this.
And you're right - short term rentals are not the only issue impacting housing in the county. There were six other factors which were more impactful on housing prices in the county, and the author left all but one of them out entirely. Given that he neither provided a link to the study nor did he bother to directly quote it, my guess is he hasn't even given it a full read. Thus, the total lack of scrutiny on any statement made by others in the article.
It's nice to read that $33.1 M went into our local economy, though I would like to see the methodology used to calculate that. And I would be interested to know to what extent STRs are cannibalizing hotel revenue, as Didi pointed out.
Tangentially related questions:
1. What is the total amount collected as Occupancy Tax for the most recent year?
2. Who gets the income from the Occupancy Tax? My impression is that the State Legislature passed a law that says it must be directed to tourism, not the general fund or other accounts.
Finally, didn't Senator Edwards recently write that he was able to obtain an over-ride to that law for Buncombe County, and if so, why not for Transylvania County?
County collects the tax and I think Buncombe's situation is a little different. But most counties, Transylvania included, are required to spend two-thirds of proceeds on tourism marketing. Total collected in fy 2021 was $1.85 million, and reached new records in the first part of last fiscal year (end of calendar 2021) but has flattened since February.
Senator Edwards' legislation made Buncombe align with the state wide standard of two thirds (66%) spent on advertising/promotion. Previously, they were required to spend 75% on advertising/promotion activities. Transylvania County has had the two third (66%) standard in place since 2005.
Maybe this has something to do with the fact that, from what I understand (and I could be wrong), the city sold a chunk of land to a group putting up a hotel in the middle of downtown. And now that same city wants to see that hotel succeed. And wants to effectively ban short term rentals. I wonder why? I'd love to see the assurances the purchaser of that lot was given upon purchase of said land. Those emails and conversations would be enlightening.
'Cannibalizing' is a business term used to describe what happens when one product displaces another. Example off the top of my head: Warner Brothers must figure out what to do when streaming on the internet cuts into attendance at movie theaters that it owns. (answer: they get into streaming also and get better control of how their movies are viewed in theaters and via internet.)
The $10,000 will not yield actionable data unless the questions that need to be answered are clearly articulated. "How the neighbors feel" will not tell you whether or not the number of short-term-rental properties affects the number of affordable housing units available.
Right. I think that's why Aaron clarified. I think it will ask opinions but also questions about experiences such as how rentals are in your neighborhood, what changes have you seen. Questions have not yet been finalized.
They've moved on from the debate of whether STRs impact affordable housing. The data in this study (as well as MANY others in other cities) simply do not support that assertion. Since they cannot support an STR ban with data, they will do it with an opinion poll which seeks unreliable anecdotal horror stories. The same sorts of stories you'd get if you asked people about their experiences with neighbors who are long term renters.
"These second homes are typically not viable as long-term rentals, and if they weren’t offered as vacation rentals, would likely sit empty and provide no benefit to the local economy, he said."
Why are they not viable as long-term rentals, exactly?
Some of them are 5-6 bedroom monstrosities of homes sitting on 5-10 acres. Your typical long-term renters would never be able to afford something like that in any market, let alone Brevard.
Ah, lots to unpack here. First – the actual report and its findings. Most people who’ve done any independent research (Google or otherwise) shouldn’t be shocked to find that the economic impacts of STRs in virtually any area are unbelievably positive. So, it’s no surprise the same is true for Brevard. It looks like most of the STR Task Force and City Council members were on board with that finding as it is basically an incontrovertible fact, and arguing to the contrary would only reveal more of their bias. Predictably, their opinions on the report’s findings concerning the effect STRs have on housing prices is where they seem to diverge with the experts they commissioned to study it. Why predictably? Well, because before the study was even conducted, several of those the author interviewed for this piece were publicly clamoring for the regulation of STRs (banning them out right, re-zoning so no future STRs would be permitted, etc.) before they had ANY data presented to them on the matter. They had their minds made up that STRs were the reason behind the “affordability crisis”, and were already offering solutions to a problem that was yet to be supported by any actual data. Don’t believe me? Just do a quick search on this author’s Substack. Or Facebook or Google. Several of these people even made such positions a part of their platform while running for City Council.
The unmistakable irony of the arguments presented in the article border on satire. Aaron Baker is quoted as saying “we should focus on the data rather than some of the analysis and narrative that is built around it.” Ignoring his own advice, he provided his own analysis that the correlation between the median sales price and the number of active STRs was “pretty high” at .71, and introduced the narrative that such correlation is “the opposite story of what they are saying” in the report. Mr. Baker’s analysis and narrative that this is “pretty high” may or may not be correct. Without writing a treatise on the matter, whether correlation is “strong” can vary from field to field. I’m not an expert on housing prices and the impact of STRs on them, so I won’t opine as to whether .71 is “pretty high.” Those conducting the study presumably are, which is why they were hired, so I’ll defer to their analysis of the matter – something those interviewed refuse to do because it is in direct contradiction of the propaganda some of them have pushed for two years or more now.
Baker’s own analysis is that there is high correlation here, and the analysis of the experts is off. But after securing a report on my own (it was neither provided by the author, nor was it directly quoted), I can confirm the report never concludes that there is low correlation between housing prices and the number of STRs in the county. Instead, the report says, “[w]hile there is a positive correlation between the median sales price and STR active listings, … there is limited evidence of causation between STR active listings and housing prices.” See page 21 of the report. Baker’s own analysis (in which he urges us not to engage) that the analysts “pass[ed] that off as not that big a deal” appears to confuse correlation with causation. Baker ignores the fact that just because there appears to be a relationship between housing prices and the number of STRs in the county, does NOT mean that one causes the other. This is Statistics 101. So, while there may be some sign of a positive relationship between the two (as the report clearly concedes), it does NOT follow that the presence of STRs directly causes housing prices to rise.
The report also indicated that there were six other factors which were determined to impact housing prices to a greater degree than the number of STRs. The author only mentioned one – total housing units – and did not question any of those he interviewed about any other such factors.
Mr. Baker suggested that “we should focus on the data”, yet the City’s plan is to spend $10,000 to retrieve anecdotal data (“what we’re looking for is that anecdotal information”), which by definition is unscientific data, via a glorified opinion poll from individuals who choose to respond to a survey. If we made policy decisions based off anecdotal data, none of us would have received COVID-19 vaccines, and most would never step foot on another airplane or get behind the wheel of a car. You can’t make this up.
The bias here is clear. Multiple members of City Council, as well as members of the STR Task Force, have gone on record before this study was ever commissioned as wanting to shut down STRs. They engaged experts to study the relationship between STRs and housing prices, and the data doesn’t support the propaganda they’ve pushed, so now they’re pivoting. Now that they know the data does not support the premise that STRs are behind an “affordability crisis” and, therefore, they cannot justify an STR ban on such grounds, they are embarking on a what is a taxpayer funded witch-hunt to secure unreliable anecdotal information about how STRs make people “feel.” These folks have tried relentlessly to shape your opinion of STRs before this opinion for years before this poll was ever suggested. Don’t be fooled, Brevard. Read the report – not the propaganda.
If all the data referenced by the task force members in their discussion and their quotes used in this article are from 2020, I think a pretty significant consideration was missed: 2020 was a disastrous year for traditional hotels / motels. Remember when people feared going into public places? People escaping urban areas to homes in rural mountain regions was a big part of the 2020-’21 Covid boom for STRs in our county.
With that in mind, it’s not surprising that the occupancy taxes collected from STRs in 2020 surpassed the amount generated by “traditional accommodations.”
I think 2022 will be a more interesting year to compare the source of occupancy taxes, as the Covid escape boom is clearly over. Plus the current state of the economy is pushing STR pricing down, demand has softened, and hotels/motels are not scary places anymore.
Is the committee researching short term rentals an objective committee? Are city council members objectively gathering data or have they made up their minds already that short term rentals are bad? Why is it significant to the tourism authority that traditional accommodations' occupancy is down and attribute that to the trend that short term rentals are popular if overall occupancy is steady or even up? Should that organization lobby for traditional accommodations? Who will write and who will receive the survey to provide anecdotal information?
I would not argue that short term rentals are not a factor in housing issues but it's not the only issue. I'd like for to us look at second homes (4000 out of 20000 according to the article), rising constructions costs, the trend in working remotely, wages of teachers/nurses etc and service/retail workers, as well as look forward to announced economic development as factors in rising property prices and a shortage of overall inventory. No one would say let's stop letting people buy a second home here or stop industry expanding to keep house prices down and rent affordable.
If we are really taking an objective look at how to help people who live here and work for $10/hr or even $35,000/year (new teachers) we've got to look beyond the easy target.
I can't speak for all the members, but the task force does have a mix of people, including a couple of realtors and downtown business owners.
These are all great questions, Tracie. Another question not asked of those supporting it: why are we concerned with anecdotal information? As I alluded in my response, can you imagine a world where policies were formulated based on anecdotal information? Various people experienced horrible side effects from the COVID-19 vaccine - I guess we should ban it. My neighbor, a long-term renter, turned his house into a meth lab - I hope the city is looking into ways to re-zone such that long-term rentals are at least limited going forward. My aunt was hit by a drunk driver - I hope the county is at least considering making Transylvania a dry county. There's no logic to any of this.
And you're right - short term rentals are not the only issue impacting housing in the county. There were six other factors which were more impactful on housing prices in the county, and the author left all but one of them out entirely. Given that he neither provided a link to the study nor did he bother to directly quote it, my guess is he hasn't even given it a full read. Thus, the total lack of scrutiny on any statement made by others in the article.
It's nice to read that $33.1 M went into our local economy, though I would like to see the methodology used to calculate that. And I would be interested to know to what extent STRs are cannibalizing hotel revenue, as Didi pointed out.
Tangentially related questions:
1. What is the total amount collected as Occupancy Tax for the most recent year?
2. Who gets the income from the Occupancy Tax? My impression is that the State Legislature passed a law that says it must be directed to tourism, not the general fund or other accounts.
Finally, didn't Senator Edwards recently write that he was able to obtain an over-ride to that law for Buncombe County, and if so, why not for Transylvania County?
County collects the tax and I think Buncombe's situation is a little different. But most counties, Transylvania included, are required to spend two-thirds of proceeds on tourism marketing. Total collected in fy 2021 was $1.85 million, and reached new records in the first part of last fiscal year (end of calendar 2021) but has flattened since February.
Senator Edwards' legislation made Buncombe align with the state wide standard of two thirds (66%) spent on advertising/promotion. Previously, they were required to spend 75% on advertising/promotion activities. Transylvania County has had the two third (66%) standard in place since 2005.
Thank you!
Cannibalizing hotel revenue? I just don't understand the feeling that it's okay for hotels to make money but it's not okay for cabin rentals.
Maybe this has something to do with the fact that, from what I understand (and I could be wrong), the city sold a chunk of land to a group putting up a hotel in the middle of downtown. And now that same city wants to see that hotel succeed. And wants to effectively ban short term rentals. I wonder why? I'd love to see the assurances the purchaser of that lot was given upon purchase of said land. Those emails and conversations would be enlightening.
'Cannibalizing' is a business term used to describe what happens when one product displaces another. Example off the top of my head: Warner Brothers must figure out what to do when streaming on the internet cuts into attendance at movie theaters that it owns. (answer: they get into streaming also and get better control of how their movies are viewed in theaters and via internet.)
It is not a pejorative.
The $10,000 will not yield actionable data unless the questions that need to be answered are clearly articulated. "How the neighbors feel" will not tell you whether or not the number of short-term-rental properties affects the number of affordable housing units available.
Right. I think that's why Aaron clarified. I think it will ask opinions but also questions about experiences such as how rentals are in your neighborhood, what changes have you seen. Questions have not yet been finalized.
They've moved on from the debate of whether STRs impact affordable housing. The data in this study (as well as MANY others in other cities) simply do not support that assertion. Since they cannot support an STR ban with data, they will do it with an opinion poll which seeks unreliable anecdotal horror stories. The same sorts of stories you'd get if you asked people about their experiences with neighbors who are long term renters.
"These second homes are typically not viable as long-term rentals, and if they weren’t offered as vacation rentals, would likely sit empty and provide no benefit to the local economy, he said."
Why are they not viable as long-term rentals, exactly?
Good question. Homeowners want to use them some of the year, so can't offer them for full-time residents.
Some of them are 5-6 bedroom monstrosities of homes sitting on 5-10 acres. Your typical long-term renters would never be able to afford something like that in any market, let alone Brevard.