FROM THE PRESIDENT’S DESK
Short-Term Rentals Distracting from Real Housing Issues
The Santa Fe Chamber of Commerce’s leadership believes that housing affordability is one of the most critical factors affecting our workforce, threatening the viability of local businesses, and the vitality of our community. The Chamber has committed to positively impacting the current housing affordability crisis across the spectrum of housing needs from homelessness to homeownership, and is actively collaborating with the city, county, nonprofits and other stakeholders to identify practical solutions to bringing our housing economy back into balance.
A frequently mentioned topic in the housing discussion is the growth of short-term rentals and their impact on the rental housing supply. Listening to many in the community you’d think that abolishing short-term rentals could solve our housing crunch, but in reality, the causes—just like the solutions—are much more complex.
Short-term rentals have always been part of the local economy, though growing demand and new technology have fueled their expansion. To their credit, the City of Santa Fe has created regulations that include licensing, inspections, collection of all taxes and protections for neighborhoods. As part of this regulation, the city has issued 1000 rental permits, of which around 800 been approved, suggesting that the supply is starting to become saturated.
By contrast, estimates of the demand for new long-term rental housing are as high as8000 units. Even if every short-term rental were immediately converted into long-term units, we would still be thousands of units shy of what is needed.
Moreover, we can’t overlook the benefits that short-term rentals have provided our community. The vast majority of these permits are held by local Santa Feans and more of the revenue from these rentals stays in the local economy. The added income for hosts also means many local homeowners are more financially sustainable over the long-term. And perhaps most importantly, visitors get to enjoy a more intimate and genuine Santa Fe experience, the kind you can only get with a local host. This new type of tourism encourages repeat visits and will be a critical part of cultivating a new generation of visitors to our city.
Like any policy, current rental regulations should be assessed on an ongoing basis to determine their effectiveness and to ensure we find the right balance between economic vitality and housing availability. But we also need to look to broader solutions. To address such a large housing gap, we’ll need to employ a variety of strategies to support new housing, not just large rental development projects, but also distributed strategies like easing rules governing casitas, adding housing in existing neighborhoods that are close to jobs and services. Most of all it will take concerted support from our local government to permanently capitalize our local Affordable Housing Trust Fund.
At last count, over 60% of the Santa Fe workforce lives outside Santa Fe and spends the majority of their money elsewhere. With over 80% of our municipal revenue based on sales taxes, this exporting of economic activity represents a huge drain on city services we all enjoy and undermines our community fabric, all while placing a huge burden on the environment.
The Chamber is committed to working towards productive collaborations that bring together the public and private sector to promote innovative approaches to ensure that Santa Fe’s workforce can continue to live in Santa Fe. While it is clear that causes and solutions are complex, we look forward to creative thinking and hard work it will take to build a more inclusive and economically vital Santa Fe.