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SALT LAKE CITY — If you've planned a vacation recently, chances are you've come across at least one short-term rental listing during the process.
The short-term rental economy — buoyed by companies like Airbnb and Vrbo — is worth billions. Nearly 2.5 million listings in the U.S. last year generated $64 billion in revenue, according to an analysis published by the vacation rental analyst firm AirDNA in January.
Given this, it's no surprise the number of short-term rentals in Utah and nationwide has exploded. Monthly short-term listings in Utah jumped from 16,803 in 2021 to 23,428 in 2023, representing close to a 40% increase in just two years, researchers at the University of Utah Kem C. Gardner Policy Institute writes in a new report.
This, they say, can have positive and negative impacts on the state and its already complex tourism and housing sectors.
Utah's exploding short-term market
The new report focuses on how the short-term rental market has changed since 2021.
Unsurprisingly, it found growth is centered around areas near Utah's state and national parks, ski resorts and other tourism draws. Most listings were either within 10 miles of a national or state park, monument or ski resort. By the end of 2023, Salt Lake, Summit and Washington counties accounted for nearly two-thirds of all short-term rental housing units on the market in Utah.
"Park City and Summit County unincorporated make up a quarter of the short-term rentals here in Utah," Moira Dillow, a housing, real estate and construction analyst for the institute and the study's co-author, said during a roundtable discussion of the report's findings on Wednesday.
With Salt Lake City now the host of the 2034 Winter Olympics and Paralympics, the demand for short-term rentals likely isn't going away in the next decade. Dejan Eskic, senior research fellow and scholar for the institute and the report's other co-author, said he imagines demand will reach record highs by the time the global event arrives.
"You saw this happening in Paris recently. Closets were being rented for $1,000 a night," he said.
Is it good or bad?
Rentals provide visitors and Utahns exploring other parts of the state with more options.
The report doesn't dive too deep into tourism data, but Utah leaders often rely on other Gardner Policy Institute research to understand the industry's impact. Tourism generated a record $11.98 billion in visitor spending in 2022, supporting about 98,600 jobs and generating $2.12 billion in tax revenue between the state and local governments.
"You're getting not just the tax revenue, but also the local businesses — the restaurants that can stay open," Eskic said, adding that it's allowed supplemental income for residents and new options for rural Utah communities, as well.
Interestingly enough, the same three counties with the highest short-term rental supply also led the state in tourism tax revenue in 2023, according to the institute's tourism dashboard. Salt Lake, Summit and Washington counties, combined, hauled in nearly $1.1 billion in tourism tax revenue last year, a little more than half of the state's total collection.
That's helped them new provide benefits for residents. For example, Salt Lake County Mayor Jenny Wilson said tourism, recreation, culture and convention tax revenue covered the cost of a county program that cuts entry costs for children at county recreation centers. Summit County's High Valley Transit system doesn't charge fares because its budget relies mostly on tourism-related taxes.
However, it's not all gravy. Every new short-term project may replace new long-term housing, playing a role in the rising cost of housing. Apartments, houses and townhouses represented over 90% of the featured listings by the end of 2023, while guesthouses and other similar listings accounted for about 7%, according to the new report.
Nearly a quarter of housing units in Summit County were designated as short-term rentals by the end of 2023, while rentals also represent more than 10% of the housing stock in Grand and Rich counties. In some cases, available land is even advertised as potential short-term rental space.
The average cost of a home in Utah has also skyrocketed in recent years. The state's average home price was about $517,550 in September, nearly double the average listed in June 2016, according to Zillow.
Local and state governments have explored ways to better manage short-term rentals because of this and other concerns, like neighborhood nuisances. Rep. Neil Walter, R-St. George, said he plans to introduce a bill in the upcoming legislative session that could potentially return units in areas outside of specific rental zones to the long-term market.
"The legislature's had a couple of different approaches to try and figure out how to navigate this particular issue," he said. "Although (the proposal) is not a silver-bullet solution, it is impacting housing attainability and housing accessibility."
Eskic said rentals are a factor, but they are not the only reason housing costs are up. Population growth and housing supply issues will likely persist regardless of any bans, which is why he doesn't believe a "blanket" policy will impact affordability in most communities. The report also found that rental units, while quickly growing, account for less than 2% of the state's current housing stock.
Cutting options, he adds, may even harm the city and county economies in parts of the state that rely heavily on tourism.
So are short-term rentals good or bad? The report's authors can't say.
"This is a Whac-A-Mole, this issue," Eskic said. "It's one of those challenges where you can make the case for either/or."
Contributing: Daniel Woodruff
