Vermont Legislature SmartTranscripts:

[Marc Mihaly (Chair)]: Thank you. Welcome everyone to the House Committee on General and Housing. Today is Thursday, May 14, and we're continuing our investigation into data relating to housing supply, housing demand, limitations, and also short term rentals. And our first witness is Julie Marks, who's the director of the Short Term Rental Alliance. Welcome, Julie. Take it away.

[Julie Marx]: For the record, my name is Julie Marx, founder and executive director of the Trabad Short Term Rental Alliance. Thank you for this opportunity during this time to take a little deeper dive into the vacation rental economy here in Vermont to hopefully brief you for future conversations. So today, do have a lot of slides. I'll run through them quickly. But I want to share a brief history of the vacation rental economy in Vermont, what the current regulatory environment is, the state of doing business in Vermont. Vacation rentals, as you know, overlap and intersect the world of housing and the world of tourism. So I want to give you some sense of the sentiment right now in the business community. And then certainly present you with some data and statistics that we have on short term rental industry impacts here. And then also what impacts local regulations are having, not just here, but also what we're seeing across the country. So you've met me before. Know Vistra. We continue to grow as an organization, representing over three fifty members and almost a third of the short term rental units that are online here in Vermont. And our members are more than just homeowners. They're the property managers who manage these homes and their employees, the property care professionals, the housekeepers, real estate agents, and other tourism dependent businesses. So real quick, I always like to, when I have the opportunity, share some history to ground us of how we got to today. The first record of Vermonters sharing their homes as vacation rental started happening in the 50s right after World War II. Obviously, there was no internet, so this was all done via newspaper ads. The concept of timeshares and fractional ownership didn't come into play until the '60s. And then once the internet was born in the '80s, it didn't take long for the nation to rally a national association of vacation rental managers to put some licensing in place. Back then, you had to be a realtor to manage a vacation rental. And ten years later, we have our first online advertising or listing for vacation rentals. And Vermont actually was the first, alongside with what we know today as the RVO, Vrbo, to produce an internet based listing site. Vermontproperty.com, still around today under a different name. By 2023, couch surfing was a thing. People sharing their homes and renting out literally their couch. And then, which ultimately led to the launch of Airbnb, which started as a room share platform in 2008. Fast forward to 2019, now about half of all travelers are choosing to stay in vacation rentals worldwide. And you might remember a time briefly where hotels were up in arms against vacation rentals. That shifted. They're getting into the game. Some of the major hotel chains, Hilton, Wyndham, Marriott, have launched their own vacation rental management businesses now. And then the latest news just revealed at this year's Vermont Tourism Summit. Their data from the tourism department here has now revealed that one in four of visitors who come to Vermont are choosing to stay in a vacation rental and that 60 of our vacation rentals are located in towns where hotels are not. There are a lot of industry terms that surround vacation rentals, and there are a lot of legal definitions. They get interchanged or misused.

[Marc Mihaly (Chair)]: So 60% of vacation rentals are in towns That don't have hotels. That don't have hotels.

[Julie Marx]: So when we think about where our visitors are going, where their dollars are being distributed, there's a lot outside.

[Marc Mihaly (Chair)]: Does Stow have? Stow has hotels. Stow has hotels. Stratton, I mean, about half the vacation rentals we heard yesterday are in towns that are what we think of as resort towns. I'm assuming they all have hotels?

[Julie Marx]: The resort towns do. Yeah. But there's a lot of distribution in every corner of the state.

[Marc Mihaly (Chair)]: I have one other question which I can't help When but I went to the League of Cities and Towns and met, you know, on short term rentals, early in the presentation, it was stated that indicated that the total number of visitors coming to Vermont has remained fairly constant over time. It hasn't grown that much. Total number of visitors.

[Julie Marx]: It's grown by about 200,000 since 2019. It doesn't look like a lot when it's in the point dot millions, but it's 200,000. It's grown, so. I

[Marc Mihaly (Chair)]: was just wondering, since it hasn't grown that much overall, where did all those people stay before short term rentals?

[Julie Marx]: Well, the number one reason why people come to Vermont is to visit friends and family. So without making too many assumptions, there's that component. The other thing I would think to do is look back at occupancy rates at hotels and see how they changed over time.

[Unidentified Committee Member]: Number one reason is to visit friends and family.

[Julie Marx]: But you don't always want to stay with your family.

[Marc Mihaly (Chair)]: No. Instead of staying cramped, you'll be at other place.

[Julie Marx]: That's a requirement in my household. Any other questions?

[Unidentified Committee Member]: How

[Marc Mihaly (Chair)]: did they get to call

[Julie Marx]: this Airbnb? Well, so the company Airbnb, I believe the history is that because it was about sharing rooms, it came from renting out your air mattress. And because it was a homestay, like a bed and breakfast, Airbnb, it's my understanding. Yeah. I know. Yeah. There are a lot of industry terms. I'm going to use the term vacation rental interchangeably with short term rental. Short term rental is the legal phrase and associated definition. I heard some talk yesterday about what is a vacation home. From my perspective, a vacation home is a dwelling unit that's not declared as a homestead and has no landlord certificate. That's pretty cut and dry right now in the way that our property designations are defined. Airbnb and VRBO, this is a pet peeve of mine. They are not a short term rental. They are what we call an OTA. They're an online travel agency. They are merely a website that allows people to advertise. Hotels are advertised on Airbnb cabins, rooms in a house. It doesn't matter whether it's owner occupied or not. You can find it on Airbnb. You can even find massages and tours and all sorts of things on Airbnb. VRBO is a little bit different. Homes VRBO only allows whole homes to be advertised on their website. And they have a little bit of a benchmark. So if your house doesn't cut mustard, they won't let you on there. And then direct booking websites. This is just another way that people advertise and take reservations through their own reservation management system and through their own website. So important to know when you're thinking about taxes and who's the merchant of record. When people are advertising and running reservations through an OTA, they are the merchant of record. They are collecting and remitting taxes on behalf of the owner or the host versus when they're collecting directly through their own means, then the owner or the host is the merchant of record.

[Marc Mihaly (Chair)]: So just to be clear, vacation, when we're talking about short term rentals, the vacation rental is either a home or a, what about an ADU, an apartment, a distinct dwelling units. They're not sharing

[Julie Marx]: Right. So a short term rental is not defined by the type of property. It's defined by the activity. So it's any type of rental that's for fewer than thirty days in a row. And then in the statute, there's a carve out for very casual use of if you rent out for one or two weeks a year, you're exempt from any kind of tax stuff. Thirty days total. Yeah, less than thirty days. At thirty days under state statute, you cross over into landlord tenant law.

[Marc Mihaly (Chair)]: But just to go back a slide, just to understand, does this mean that if I have what is clearly in short term rental, but then I decide to use an OTA to help fill it, it's no longer counted in your numbers as a short term rental? I know it is. It is. Yeah, is. So.

[Julie Marx]: The OTAs are

[Marc Mihaly (Chair)]: included. The houses that are, or the units that are in the, just because they're advertised in the OTA, are they still included in your numbers?

[Julie Marx]: Absolutely. The way that the homes are marketed and advertised has nothing to do with the data, except for where some of the data comes from.

[Marc Mihaly (Chair)]: Yeah. Oh, so you wouldn't wanna do over thirty days? No. Because you don't wanna deal with it or turn away a little bit. You

[Julie Marx]: just cross into a different jurisdiction, yeah.

[Marc Mihaly (Chair)]: Thirty days, cumulatively. If I have a sixteen day rental in this month and another sixteen day rental, that's over thirty days.

[Julie Marx]: Not cumulative. Thirty days and days. Yeah, sorry, sorry, consecutive.

[Marc Mihaly (Chair)]: And that's pretty much in the law.

[Julie Marx]: Poster law is the law.

[Unidentified Committee Member]: What law is covering under thirty days if it's not Lamoille and Tenet?

[Julie Marx]: Okay. So just to wrap up some terms, you've also heard, I think, the first time yesterday, midterm rental. This is not a legal definition. There is no real definition around this. It's used more colloquially. There's a whole business demand. There's a whole market for what is being called now this mid term rental housing. Generally, it's furnished, it's somewhere between a month and less than a year.

[Marc Mihaly (Chair)]: And it's corporate often, corporate?

[Julie Marx]: It can be vacation rentals, short term rentals often go back and forth and do both in one year. But again, from the host liability perspective and under the rule of law, they fall under, in Vermont, And same as so when I say host, I'm talking about the person who's responsible for managing the rental here in Vermont and everywhere. It can either be the property owner themselves being fully hands on, or it can be a property management company that they've hired to do all of the cleaning, maintenance, guest communication, reservation management, etcetera. There's often a lot of misconception that property management companies, when you see them advertised, you'll see homes and they'll have 200 homes offered by the CASA. They do not own those homes. They are managing on behalf of owners who have hired them to do so. More on that later. This is in your slides, but this is the easiest way that I have found to try to delineate between the different types of accommodations as they're defined both legally and colloquially in Vermont. So the only thing that's not on here are campsites, which some of our short term rentals technically also qualify as campsites, not as short term rentals because when they don't have plumbing, so like glamping and tree houses like that. But our lodging establishment very clearly licensed by the Department of Health when you are either serving food or have three or more units on a single property. So regardless of what they look like, a short term rental, you cannot have more than two rental units on a single property and still be designated as a short term rental. I explained the difference between midterm and long term. Again, legally, they both fall under the same jurisdiction. It's just that the midterm satisfies a furnished, all utilities included need, and the long term doesn't.

[Marc Mihaly (Chair)]: So if I have a house that I'm not in, it's and got three bedrooms, and I rent all three bedrooms via whatever, that's considered a lodging establishment.

[Julie Marx]: If you rent each bedroom to a different party,

[Marc Mihaly (Chair)]: then

[Julie Marx]: you would most likely, in your town, fall under the definition of a bed and breakfast because you live on-site. And then you might need a license for a bed and breakfast.

[Unidentified Committee Member]: Okay. But you said you don't live on-site. Yeah.

[Marc Mihaly (Chair)]: If I don't live on the site, if I'm just running it out as a business, It still could be B a B if I ran out three or four rooms to different people.

[Julie Marx]: Well, now we're maybe getting in the weeds of town by town definition of a bed and breakfast, but from the state's perspective, as far as I understand, it's three units rented to different parties in one parcel that would trigger the need for a lodging establishment license. The data that I am sharing with you comes from a variety of sources. There are several for profit vacation rental data analyzers who collect this data to sell back to DMOs, destination marketing organizations. Our State Department has an account with Key Data. They get their vacation rentals from this company called Key Data. The VHFA, all their hazydata.org information on short term rentals, pulls from data they purchased from a company called AirDNA. Avistra is a partner to many of these companies in the industry. We also receive data from these sources as well as a variety of others. So now I'm going to get into the real stuff. I really hope that this is an opportunity for you all to take a moment to see the vacation rental economy in this overlapping light. Because really, at the end of the day, if we can find a shared reality, then we can find shared solutions. And this is where we find ourselves. You heard yesterday we have a long, long history here in Vermont of second home ownership. It was 15% of our housing stock in the '70s. It's 14% still today. Since the '80s and '90s, there has been very little growth in new construction, new home development, especially in the types of housing that we need, which are smaller starter homes or senior living facilities. And then we've had this demographic shift. I know you've heard about it before. You're going to hear about it again later today. But just my lived reality of this when I think about housing and the situation we're in. When I grew up, when I was growing up, I was in one household of four people. My parents were in their 40s, 50s. My brother and I were growing up. That was back in the 80s. Today, our one household is now three households of one or two people. My parents got divorced. They both stayed in state. My dad remarried. My mother did not. I live here now with my husband. We have no children. My brother decided to leave and lives in California. So our one household of four became three households of less than two, which is how you get less population and more housing demand. And then, of course, layer on top our affordability problems with inflation and property taxes, etcetera, all that. And then we have this under regulated petrol rental industry on top that seems to keep getting pointed at. So that's why I'm here. To answer your question about regulations currently, in 2018, Act 10 was passed, and that provides the legal definition for what is and what is not a short term rental. It gave municipalities the authority to regulate. It gave the Division of Fire Safety the authority to enforce rental code. So under fire code, as soon as anyone rents, one day, three sixty five days, it becomes public building and is required to meet residential rental code. And then this act also gave the Department of Taxes the authority to tax. And so in 2018, Airbnb and Vrbo have been remitting taxes to the state, and states been enjoying that. And then 2024, Act 81 included a mandate to the Division of Fire Safety to provide guidance on safety to the online travel agencies and to shortcom rental operators so that that guidance could be posted in advertisements and also in the residential units to inform visitors and guests. So why do people host in Vermont? This has become a growing, growing industry. People love staying in vacation rentals. It's become very popular and entices travelers from all across the globe. Nearly half of everybody traveling is choosing a vacation rental. And if we look to the future, we're just seeing the younger generations who are coming into their spending power expecting that is their norm, to stay in a vacation rental. And it's partly because they offer amenities that hotels don't. They offer more space to spread out with a larger family, bring your dog, suitable for multigenerational family visits, working remotely, again, this medium term stay. And then, of course, the privacy and the uniqueness and the feels like home vibe. I think we all can understand that, especially if you've stayed in a beachfront all yourself. So here in Vermont and these are I have some photos in here. These are not stock photos. These are all photos of real Vermont rentals and people who are in our association. So again, here in Vermont, the average short term rental holds six people. And people are looking for that privacy, which really is what Vermont has to offer in a lot of ways when people come here. We know that people, when they stay in a vacation rental, they stay longer than they do when they stay in a hotel, which means they're spending more money. And currently, about 20% of all reservations that are made through Airbnb and this is just Airbnb are for a month or longer. So that shows this growing demand for that medium term housing, when often people are choosing their destination based on their accommodation. So when somebody is looking and deciding, oh, do I want to go to New England, I want to see the foliage, Go to Upstate New York. Do I go to Canada? Do I go to New Hampshire or Maine? They might just find the coolest vacation rental and choose try to go. I want to talk a little bit about why people decide to offer their place as a short term rental rather than a long term rental and hopefully debunk false assumption that it's just for the money. And if you're into it, you're going to make a lot of money. Go to for the past five years, I've been deep in this industry now on a national scale. I go to very regular conferences, bigger perspective on this industry. I'm in the room with some of these mega corporate investors. New England is grayed out on their map because it doesn't pencil out. You can't make that profit here because what you need to make a real profit in this industry are really high occupancy rates, competitive nightly pricing. And that comes from a location has consistently high volume demands. We're thinking about where Taylor Swift goes and where Super Bowls are posted. And you have to have tons of available services that are cost efficient and predictable. Vermont, we don't really have any of those things. Our occupancy rates are really low, probably because right now, especially, we're at a bit of a market saturation. We also don't have that high volume tourism demand. Even though it's 10% of our economy and really important to us, we don't have the Taylor Swift coming to Vermont. And we don't have big business conventions and conferences coming to Vermont. And it's also, we don't have the service providers to make those services affordable as well. And then, of course, across New England, property taxes are highest in the nation. Cost of utility is much higher out here than out West. So I know yesterday, too, the BHFA shared a little bit about income data, that short term rental property, the average gross revenue that a short term rental property brings in. This is true. But the reason that the profit margins are often smaller than long term rentals is because the purchase price is higher because you have to be in a desirable location. Your interest rates are higher from lenders. The down payments are more. You have to furnish and fully equip the home, which can cost, depending on your style. And the audience are kidding too, up to $50,000 sometimes a room. You've got fixed costs even during slow months, November, December, April, no bookings. But you still got to pay your mortgage and all your utilities. Insurance for short term rentals is up to three times more expensive than a regular homeowner plan. Utilities are included. And let me tell you, vacationers do not turn the lights off or take shorter showers. So they go really high. If you're hiring a property management company, you're paying sometimes up to 40% to the property manager. Cleaning fees, hiring a professional cleaner can be thousands of dollars, along with resupplying guest provisions, shampoos, etcetera, wear and tear on furniture. I can't tell you how many sheets I buy every single year or couches I've had to replace. And then, of course, we dutifully pay our meals and rooms tax, which is now creeping up here in Vermont from 12% to up to 21%, 22% in Burlington, as you heard. So again, from the visitor perspective, maybe it's cheaper to go to New Hampshire. And then the platforms are charging more and more fees as well. And now we're seeing the towns add annual registrations, permitting fees, inspection fees, etcetera. So what really we end up seeing here in Vermont in terms of who's renting and why, they tend to be the high end luxury properties. That's because they actually do earn a higher profit margin to make it pencil out. Curated, unique stays, like Heather's Treehouse here in Glittenden Hartford, people travel just for this experience. So she has really high occupancy. Owner occupied homes do well because the expenses are lower. Similar to a legacy or inherited property that has a low cost basis can often make that work. And most commonly, what we're seeing is this middle class second homeowner, where the opportunity to rent is allowing affording people who otherwise wouldn't be able to afford that type of lifestyle to have that dream home in their dream destination. But really, they're just breaking even. They're just covering their costs. This is a little bit redundant, but this is what we hear from people as to why they choose to short term rent. We get asked this a lot, and it's really just to help them stay where they are, whether it's here in Vermont or whether it's continuing to enjoy the use of their family vacation home. The other thing we hear is that while we used to do long term, and they had such a terrible experience that they're never going back. Thing I think

[Marc Mihaly (Chair)]: Do have any data at all on that number five?

[Julie Marx]: When I was involved in the local organs development in Burlington, it's kind of where Vistra started. We had a coalition of Burlington hosts, and we did a survey of the Burlington hosts that included that question. It was about if memory serves me and I can get back to you on this, but I want to say it was about 20% who indicated that they just will never go back to long term renting under current Vermont law.

[Marc Mihaly (Chair)]: I'm going to use the data.

[Julie Marx]: Okay. I can run a broader setting now. But again, I think it was also about 20% that were both, that were long term housing providers and managing vacation rentals too. So some people have never been in the long term housing providing industry. You've seen the graph on housingdata.org that shows the growth of short term rentals over time. But I find it interesting that when you segment that out into counties, so the top pink and light blue are Lamoille County and Windsor County. Those are our ski resort towns. You can see the growth is really driven by the ski counties, whereas the lower three are Chittenden, and then Orleans, and then Grand Isle County have this more flat undulating trend where it peaks in the summer and it dips in the winter. And I assume that that might be largely due to a lot of our seasonal camps housing coming online in the summer and then being turned off in the winter. But you can see very little, if not zero, growth in those counties compared to our ski resort counties.

[Marc Mihaly (Chair)]: My impression, and I'm not sure where I got it from, was that overall, the growth has kind of, in the last two years, 'twenty four, 'twenty five, kind of leveled off. Is that the case? Has, yeah. Why?

[Julie Marx]: Not empirically, but I would venture to suggest that it's partly because the market is reaching a saturation point in terms of competitiveness and demand. There was a real artificial boom in this industry right after the pandemic or during the pandemic when hotels closed and international travel was shut down. It was the only option for safe traveling because you could stay in your pods. Is that what we called it? I can't remember anymore. So there was a big artificial inflation of investors that came in. When I say investors, in Vermont, me who thought, Oh, this is a good opportunity. You buy high, and now everything is back open, the demand isn't there, the competition has remained high, and you've lost money, you're selling and getting out and deciding, no, this isn't for me.

[Marc Mihaly (Chair)]: Do you think that the Canada problem has had any impact?

[Julie Marx]: I would say the drop in tourism from Canada has had an impact in our industry, different from the hotels and really any part of the tourism sector. Certainly, our vacation rentals up in the northern part of the state and Burlington area have felt that loss of visitation more than the southern parts of our city. This is a little bit of a national perspective. I stole this from AirDNA from another conference. But this is a national look at this census showing that there is starting to be indication that where short term rentals are coming from are the formerly used vacation homes. So while we have the granular data that we'd like to say to say what is the use history of every single property? There's census level data starting to show that legacy vacation homes are now starting are more and more being opened up to the vacation rental market. Here in Vermont, our short term rental use is innately low and limited. Airbnb tells us that when they look their data, so they can analyze all of the different advertisements that are on their platform, they say that about 85% of our hosts just have one listing, which does track with other data that we have. So we see a concentration of ownership. The other thing that we know is that most people aren't offering this all year long. The average listing is rented for thirty five nights a year.

[Marc Mihaly (Chair)]: I have a question about that. Are you able to see or is the data able to see what's happening in those rentals the other nights of the year? Are we able to

[Julie Marx]: see if it's vacant or if it's owner occupied? Not really. The assumption is that when it's been turned off, the calendar has been blocked, it's for the owner's personal use. You can see when it's available and hasn't been booked. Okay. Yes, you can see that. But whether you block it off for a reason because you're remodeling or because you're using it, that makes sense. We don't know. These are a couple of the vacation rental companies that operate here in Vermont. You can see many of them are local. And we know from them and talking to them that out of all of the vacation homes that they manage, they say 90% are occupied by their owner every year. So again, we're thinking about, are these homes available to the long term market? No. The other information that we have that's kind of emerging out of local registries would suggest to me that that 10 who don't own or who don't occupy their vacation home. So that would lead us to think that is just an investment property. My guess would be that those are Vermonters who are building a living off of real estate here in Vermont locally. You saw this data yesterday, but this is a slightly different presentation. It shows you the maximum whole home short term rental listings. This is just whole homes. This does not include rooms in a house. But it does include that mid term rental housing interchangeable. And so it's about 3% to 4% of the housing stock, depending on whether you take that snapshot at the peak point or the low point. And you can see how that compares to our vacant homes, the homes that are on the market in transition and our seasonal homes compared to our overall homes.

[Marc Mihaly (Chair)]: So let's go back to that for a minute. So those STR listings, that doesn't talk about actual occupancy. That just talks about homes at a given point in time that are listed.

[Julie Marx]: Yes, that are on the market available to be rented. And of those, so of this 12,000, about 80% are also available on the market to be rented for thirty days or more. So they are allowing that and satisfying that mid term rental housing option. So you can see in the yellow, those are the listings that don't allow for that thirty day or more and just purely do short term. But the majority of folks offer both and casually go back and forth.

[Marc Mihaly (Chair)]: When we heard about the visiting nurses, and their contracts were usually three months, So would that housing be involved in this data?

[Julie Marx]: Yes. Yeah, they would be looking for this type of housing. And it's interesting, too, that traveling nurses used to really drive that demand for this type of housing. Used to call it corporate housing. It doesn't really exist in that form anymore. It now is in this form. But today, especially post pandemic with remote working and just different lifestyle desires, the majority of medium term housing demand is from just professional workers. People who can work remotely, people who are traveling professionals, maybe in the arts and culture, maybe professors. So there's a lot more demand than just nurses now, actually.

[Marc Mihaly (Chair)]: If you go back a slide again, so the seasonal homes, the 51,000 seasonal homes, they're not counted as SDR because they're not rented? So, we don't know

[Julie Marx]: where this number is spread out between these. We don't know. So,

[Marc Mihaly (Chair)]: it's not a separate number. Right, right. It's mixed in

[Julie Marx]: coming from the seasonal homes, the renter homes, and the owner homes.

[Marc Mihaly (Chair)]: Okay.

[Julie Marx]: You asked why bedrooms was relevant. Bedrooms is an indicator of capacity. This was a fun exercise that I got to participate in with some other agencies during the solar eclipse or leading up to it because it was emergency management department called and said, what is our maximum capacity? Because we're likely to fill it to meet it. And I learned that short term rentals and this equates with what they found that I think they said 43,000 bedrooms, two person bedroom about 90,000 in visitor capacity compared to lodging. So again, when we think about the impact that vacation homes and this type of activity has in our economy overall, they're more than half of our visitor capacity right now in the state. And you can see they have a much lower occupancy rate than hotels. That's because hotels are open three sixty five days a year. Vacation rentals are not. And they tend to be more expensive. This is just a case for, again, the economic side of vacation rentals. Last year, we estimate that over $50,000,000 came to the state through the meals and rooms tax. That's based on revenue data. And then we know from both the tourism department and national data that spending habits of visitors tends to be quite high. And again, at a vacation rental, they're staying longer. So we expect that over $600,000,000 are being spent at the local businesses here in front just from vacation rental guests. And again, a lot of these homes are being professionally managed, supporting the employment and jobs of hundreds and thousands of people in Vermont. Even the two out of state national management services are employing local carekeepers, housekeepers, etcetera. And we have over 100 Vermont based vacation rental management businesses. Yes.

[Unidentified Committee Member]: So when a person owns a home and they're using, let's say, three bedrooms, they live there as a short term rental, they're paying property tax on that home. And then is the rest local option taxes?

[Julie Marx]: So the so the local option and the meals and rooms tax are separate from the property tax.

[Unidentified Committee Member]: Right.

[Julie Marx]: The local option tax would be, if you're in a town that has that, would be applied to the nightly rental rate that you're charging for each room, for each reservation. The property tax, if you're in your homestead, this is something I talked to other committees about actually was right now in Vermont, if you are a homestead, you're taxed at a homestead rate. But on your homestead form, have to declare if you rent a part of your property. And then that part of your property gets taxed So at the higher right now, in the education bill, we're thinking about all these different classifications. Homeowners who have a short term rental are looking at currently potentially being taxed at that high rate because they're renting, which, in my opinion, most homesteaders rent to try to pay off their property taxes. So it gets a little tricky. I showed you numbers, so I want to show you some pictures because I think this really helps to understand what the vacation rental economy looks like here in Vermont. These are all, again, real live vacation rentals that you can book today or over the summer here in Vermont. Again, the luxury homes. I think we all know Vermont is filthy with big, expensive, beautiful homes. And you can rent them. This is a 15 bedroom estate in Stowe. It rents for about $9,000 a night. This is an ADU, and it's always booked, that luxury one. This is an ADU in somebody's backyard. This is a renovated castle also in Stowe. We've got a lot of cool tree houses, of course, in our forested landscape here. Glamping, since the glamorous camping, this has become very popular and very fun. You haven't tried it, I recommend it. Of course, we have all of our ski condos that were permitted back in the '70s and '80s as seasonal use under Act two fifty. This is an owner occupied duplex. This is a traditional vacation home, family vacation home. We have our three season camp. This tiny house has made so much national news. It's one of the most sought after vacation rentals in the country, and it's also up here in Stowe. And then we have farm stay. This is another big growing part of our sector. Currently, about 20% of farms here in Vermont offer farm stay as part of their agritourism experience and offsetting the costs of farming. So these are vacation rentals here. So when you look at the numbers and you think about what the numbers this is a little bit old data, but the proportions are the same. When you look at what's a vacation rental and you're thinking about housing, Okay, Okay, orange is the house. Those are all the houses. Everything else is apartment, condo, glamping, B and B or an inn, private room, other. Again, you heard yesterday, this designation is determined by how it's advertised. So me as a host, when I'm choosing how I'm going to advertise my listing, my rental, I'm self selecting this designation. It doesn't necessarily line up with the legal definition.

[Unidentified Committee Member]: Yes. Location home typically someone's second home that lives in Vermont or lives outside of Vermont?

[Julie Marx]: We don't have definitive data on that quite yet, but the best indication that we have is that it's about fiftyfifty. Okay. So when we're looking at what's in this number, we have 6,000 vacation rentals that are homes. That includes the Lake Camp, the 3 Seasons Lake Camp. It includes the estate in Stowe. It includes MyADU. And it includes an owner occupied duplex. So when you think about it in that way, that number becomes a little bit less useful, I guess, because there's just too much that we still don't know. We don't have data on, is this single family, whole home vacation rental, is it weatherized? What's the market value? Is it even comparable to natural affordable housing? Is it owner occupied? Is it providing a monthly rental? Is it a snowbirder home? Was it intentionally and purposely built for this purpose, so not taken away from some other former use. And then what is the use of that property? We don't have any of that information. So again, big picture. Short term rentals, huge contributor to our economy, both from the perspective of state revenue, but also local revenue and job creation as well. And another thing that we just learned at the Vacation Rental Summit this year with new data from the tourism department. And don't quote me exactly on the number, but I believe it was 18 of people said that after visiting Vermont that they'd consider moving here. Regulations in Vermont at the local level. They're starting to come up. I think we have about 22 municipalities, at least that I know of, that are regulating short term rentals. The regulations have been highly variable, very hard to track, geographically conflicting at times. For example, we have Wilmington and Dover right next to each other in the community. They have very opposite rules, which makes it very confusing for owners and visitors alike. Largely, they remain unchallenged in court. So this is a list of some of the examples of some of the conditions that we've seen municipalities put in place. I'm not saying that all of them are necessarily legal, but they haven't been challenged. So we're seeing a huge range in registration fees, caps on the absolute number, requirements that the owner must be on-site, caps on the number of nights that can be rented or on who and how many properties somebody can own. And you can read. But really, what we have been trying to do when we work with municipalities when they are facing this challenge of regulating short term rentals. We really try to emphasize the importance of educating owners and how important that is. That's really what the data show, is not that short term rentals are having any impact on housing, but they do often, if unmanaged, they can cause issues with noise, parking, and trash. Those are the most common complaints. And typically in one given property, it only happens once because nobody wants a trashed house, nobody wants an overgrown septic, nobody wants an angry neighbor. But it takes education to help people mitigate those impacts. And so that's what we try to do. A lot of our work is education for operators and for towns to help them understand what the tools are that are available to them as well. I have a couple of examples for how regulations have or have not impacted housing. This is an example that comes from Hawaii, from Oahu, which is a very similar economy to Vermont in a way. Their vacation home or their short term rental presence is roughly similar for 4.5% of their housing. They passed a ban on vacation rentals in 2019. There are two different regulations, one in 2019 and then another one in 2022. The blue line is the number of short term rentals. And then the red line is the average monthly rate for long term rentals, so the cost of renting. So you can see that the law was very effective in reducing the number of vacation rentals but did not have an impact on long term rental rates. And we saw the same thing happen in New York City. New York City, a couple of years ago, banned vacation rentals in their downtown. And one year later, rental prices were still going up. Vacancies were static, and the hotels were enjoying almost a 10% price bump. There's more examples of this. The Board of Canada did a study in their market, essentially finding that similarly to Oahu, while policies were really effective at reducing the number of short term rentals, it didn't have effect on lowering rents. And New Hampshire did a study as well. Their housing board commissioned a study, basically finding that about half of their vacation homes are locally owned, that there was no signs of foreign investment, didn't affect the rent prices, minor effect on vacancy. And most of them had been a vacation rental for a very long time. Locally, we are starting to see indications, but this has not been professionally studied. So this is just a snapshot before and after of towns and the absolute number of vacation rentals before and after they instituted their various regulations. So in Burlington, they were really focused on trying to reduce the number of short term rentals through their rules. We didn't see that happen. Woodstock is a little bit of an asterisk because they put in rules in 2019, 2020, and then the residents petitioned against it. There was a vote and then half of the town so it's village governance and then the town governance. And so then they got splits. Now they have different rules. And with Killington, they were not interested in reducing the number. They just wanted to really enforce health and safety standards. And their system has been very successful in doing so. We also provide, just for your knowledge, we provide resources for municipalities to help guide them to regulations that we feel are fair and enforceable. And similarly, we have a growing library and educational opportunities for our members so that they can learn about those responsible hosting practices to mitigate any nuisances that arise. I hope that was informative.

[Marc Mihaly (Chair)]: Thank you. Any questions remaining by the committee at this point? No, no, not really comments. Just questions, just comment. I definitely stated a few years and stuff like that. And the situation around why someone does it is almost as many as there are. Yeah. It's wise to hear some of the stories of, like, our dream home came on the market out by the lake. We can't make it work. So in three years, we can when we sell our house and move to that place. But, you know, just the amount of stories are wild. Yeah.

[Julie Marx]: It is. It is very personal.

[Unidentified Committee Member]: I have one quick question about the under thirty days as far as any ordinances or rules having to do with

[Marc Mihaly (Chair)]: safety. Okay.

[Julie Marx]: Generally, again, they fall under the authority of Division of Fire Safety for enforcement, Given the limited resources that they have, they prioritize inspections based on either a couple of a few triggers. Either a complaint that's filed against the property, a change of use form that's submitted by the property owner, or more recently, a local ordinance that is pinging them. At that point, they have said generally that they will only inspect homes of nine or more occupancy because that is a higher risk for safety than the lower occupancy ones. So I would say those larger homes are being inspected now more than the smaller homes. But from their perspective, the rules are the same whether it's a short term rental or a long term rental in terms of that code compliance. And enforcement, if there's a complaint. If there's a complaint. Right. Yeah. Well, you. Thank you. Appreciate it. Of course.

[Marc Mihaly (Chair)]: We have your slideshow. Yes. Okay, great.

[Julie Marx]: Thank you. Thank you.

[Marc Mihaly (Chair)]: Members of the committee, we have next up JFO. They are supposed to be here at eleven. Should we take a break? What's the story?