Demand for Steamboat rentals driving up prices

October 19, 2014

Steamboat Today

A year ago, the Steamboat Pilot & Today’s classifieds section listed a one-bedroom apartment available for $700 per month, a two-bedroom for $1,150 and a three-bedroom, two-bath home for $1,550. The prices weren’t rare finds but representative of 40 other listings, including those at Mountain Village and large complexes across town.

The rental landscape today is far bleaker for the prospective tenant, and last Sunday only six properties were listed for rent in Steamboat — including one-bedrooms for $800 and $1,200 apiece, two-bedrooms for $1,400 and $1,600 and high-end three- and four-bedrooms for $3,000 and $2,150 each.
 
While the classifieds represent a random sampling of properties that may be changing renters at a given time, the numbers are on par with statistics collected by the state from complex managers in Steamboat earlier this year.

“It’s a classic supply-and-demand scenario. Demand is exceeding supply, and therefore your price goes up,” said Jason Peasley, executive director of the Yampa Valley Housing Authority.

Peasley said there are simply not enough homes and complexes in Steamboat to feed the demand right now, and even if ground is broken on more livable units, it could be two years before rental agreements are signed.

“The demand is right now,” Peasley said.

The Ponds apartment complex, owned by Steamboat Ski and Resort Corp., reported no vacancies for one-bedroom units and saw a 45-person waiting list for prospective renters.

Rising rents

With high demand comes increased prices, as evidenced in the state’s Multi-Family Housing Vacancy and Rent Survey, which surveys rental costs, vacancy rates and other characteristics of rental complexes in Steamboat and across the state.

The most recent statistics for the first quarter of 2014 show a sizable jump in the cost of rental units.

Average housing complex rent, which has hovered between $700 and $800 for most of the past decade, was $932 in the first quarter of 2014, representing surveys from March of this year.

The median rent of $744 for a one-bedroom and $963 for a two-bedroom condo are the highest recorded average the decade-old survey ever has reported.

Sponsored by the Colorado Division of Housing, the survey is researched and authored by Ron Throupe, an associate professor at the Daniels College of Business at the University of Denver.

A previous professor at the college started the first state rental surveys nearly 30 years ago, Throupe said.

Between 150 and 300 surveys are collected twice per year from units in Steamboat.

Steamboat Springs City Council member and economist Scott Ford said while he didn’t disagree with the idea that the rental market is tight, the survey results may only represent a small sample of rentals.

“This could be the tyranny of small numbers,” Ford said.

While the spike in rent for the first quarter of the year could represent a sampling anomaly, rental availability and listing prices around town suggest otherwise.

Apartment complexes are at capacity, with Mountain Village full and non-employee tenants being asked to leave The Ponds to make room for seasonal renters who work for Steamboat Ski and Resort Corp.

Throughout the summer, The Ponds, which is owned by Ski Corp., reported no vacancies for one-bedroom apartments and had racked up a 45-person waiting list for prospective renters.

Peasley said The Ponds was built years ago to provide suitable housing for employees recruited from out of state or out of the country to work for Ski Corp. During the recession, more resort jobs went to locals, who were likely to have housing in place already, freeing up space for others not employed by Ski Corp. in the complex.

As the economy recovers, locals are taking available year-round employment, meaning recruits from out of the region will be moving back into The Ponds.

A change in employee housing needs is one example of the economy’s effect on Steamboat rental market, Peasley said, and apartments are just a small percentage of the roughly 2,250 rental housing units in Steamboat.

Single-family rental homes face their own set of economic factors driving up the cost of rent.