21% of property owners who’ve put their homes on the vacation-rental market for the first time said they did so for economic reasons, according to a May 21 survey by homeaway.com.
"[When I moved to Santa Fe in 1992, [Fort Marcy] was a neighborhood with relatively reasonable rents, where artists, writers and young post-docs at the Santa Fe Institute could find digs…All these opportunities to live downtown have been wiped out by legalizing short-term rentals."—santafereview.com Editor George Johnson
Thinking about renting your home to tourists for a little extra cash? Don’t bother. People with nicer houses closer to the Plaza have already thought of the same thing.
Through June, Santa Fe Craigslist carried an average of 12 vacation-rental listings a day. That’s up from an average of four such listings a day in June 2007. Another vacation-rental site, homeaway.com, added a handful of new Santa Fe vacation rentals this year.
Those wannabe DIY hoteliers will be stymied by low demand. Vacation-rental owners are suffering from the same summer tourism decline that’s hitting the hotel industry.
Kokopelli Property Management CEO Charles Goodman says his vacation-rental business is down 10 percent from last year. James Dominick, owner of The Management Group, has seen a similar drop, partly due to increased competition.
“Because hotels have started lowering their rates, that’s cutting into our business,” Dominick says.
Most short-term rentals advertised online have permits from the city, but a few remain underground. After a yearlong controversy, Santa Fe City Council legalized short-term rentals in 2008, provided homeowners pay $1,000 for a permit. The Council is set to revisit the issue later this summer.
The city now has 364 permitted properties. Dominick estimates there are another 100-150 illicit vacation rentals.
That would mean short-term rentals comprise only 1.6 percent of Santa Fe’s 30,533 residential homes (at last count by the US Census). “It’s not the ‘creeping algae’ that it’s been called,” Dominick says.
Both he and Goodman lost clients after the introduction of permits. Many former clients now dodge the ordinance by renting their properties for at least 30 days. Others have left the short-term rental market entirely, which could be good news for local long-term renters wanting to live closer to downtown.
“My advice to all owners is do whatever it takes to keep the tenant in the property,” Goodman says—including rent reductions of up to 10 percent.
