In Wyoming Tourism Towns, Short-Term Rentals Squeeze Real Estate Markets

SARATOGA — This small southern Wyoming community is the latest to wrestle with issues that short-term rentals like Airbnb and VRBO can present in high-demand tourist areas. Technology is allowing remote workers to live where they want to play, and that influx is fueling dramatic increases to housing prices in many towns with tourist attractions. Add in short-term rentals, which can pull some housing out of the real estate market, and the problem can become even more acute.

“It’s kind of a fine balancing act, and we are trying to figure out exactly where the proper pivot point is,” McCall Burau, a business owner and member of Saratoga’s Planning Commission, told Cowboy State Daily. “There aren’t enough hotel rooms to support events at the community center and general summer tourist activities, so short-term rentals definitely play a vital part in our economy.”

But short-term rentals are also pulling some of Saratoga’s already short housing supply off the market, adding what some feel is a sharper edge to the city’s growing affordability crisis.

“If we want to be a town with a diverse population as far as age and economic status, we need a more diverse housing pool,” Burau said. “And it’s been argued that any affordable housing on the market gets snatched up for short-term rentals.”

Where the tipping point might be for short-term rentals and their effect on housing in Saratoga is something Burau said has been elusive.

“I’ve talked to a couple of researchers who study that,” she said. “And they don’t really have a hard and fast number.”

Saratoga Housing Heat-Up Impacts Labor Pool

Saratoga’s median single-family home price was $350,000 in July 2024, up $25,000 or 7.7% month over month. That puts the median price per square foot around $210, according to a report from Rocket Homes.

That jump in prices has happened despite a jump of 43% in inventory, and average sale times have dropped 16.5%.

That kind of heat has been going on for a while now, to the point it’s starting to affect the ability to hire people, Burau told Cowboy State Daily.

“We own a restaurant, so we see that issue with housing and workforce from a personal place,” she said. “There’s not a lot of available service workers and I don’t know where they all went post-COVID, but the industry has really taken a hit.”

Where in the past, businesses could hire seasonal workers for the summer from outside Saratoga, the rising cost of housing has meant a dramatically restricted labor pool, because there’s nowhere to put the workers that they can afford.

“We have completely retooled our restaurant,” Burau told Cowboy State Daily. “Before it was kind of a higher-end, sit-down, full-service restaurant with a complex menu.”

It’s been reimagined as a counter-service style, where customers order their food, then wait for someone to bring it to them.

“The menu has been simplified so it’s not labor intensive as far as requiring someone to make a lot of complex sauces and cook a steak to a proper temperature and having a wait staff that is going to be very attentive throughout multiple courses of the meal,” Burau said. “We just didn’t have that anymore.”

The restaurant is now only open five days a week now, too, instead of seven.

“We’d love to be open seven days if we had enough people. We just don’t.”

Wide-Ranging Problem

Saratoga’s short-term rental picture and its affordability crisis is a microcosm of trends that are happening across the state and the nation, AirDNA’s Director of Economics and Forecasting Bram Gallagher told Cowboy State Daily. It also illustrates how complicated it can be to figure out how just much impact the short-term rentals are really having on the housing market.

AirDNA tracks data on vacation rentals across the country, and Gallagher estimates that his company captures 90% to 95% of the short-term rental market.

According to Gallagher’s data, Saratoga has around 60 short-term rentals, about half of which are available full time. The other half are offered on a part-time basis, meaning someone lives in the home at least part-time.

Saratoga’s short-term rentals are going for an average of $200 per night, Gallagher said. That suggests those homes wouldn’t land in the affordable category even if they returned to the market.

In addition, most of the short-term rentals are owned by people who have four or fewer rentals, so it’s not a corporation-driven trend. There’s just one that looks at all “corporate,” he said, and they only own six units.

It takes about four units for an individual to fuel a retirement or replace a full-time job that pays $40,000 annually, Gallagher said.

“So, we consider having four or five — anything less than 21 — as a small-time operator,” Gallagher said. “After 20, then we’re like, OK, you are definitely a professional company.”

So far, Gallagher said, studies are not finding much relief for housing markets that have banned short-term rentals.

“Harvard Business School is looking into New York City, which famously has very expensive properties, and trying to find an effect from the recent ban that they had on short-term rentals,” he said. “We were formerly one of the largest short-term rental markets in the whole world, and now it’s essentially outlawed.

“And they still haven’t really found much of an effect on housing prices, though hotels are much more expensive now.”

Demand And Supply

Ordinarily, the cure for high prices is increased supply, but so far, few new homes are being built in Saratoga, Burau said.

“Interest rates have put a halt to building,” she said. “The building permits taken out this year are less than last year, and everyone’s just kind of halted.”

What she’s also seeing is that builders prefer to build a million-dollar home to building an apartment complex.

“I think if a builder can come in and build a million-dollar home or an apartment complex that’s attainable housing for nurses and teachers, it’s probably easier for them to build a million-dollar home,” she said. “There is a demand here for that, too. Until the demand for affordable housing beats out the demand for million-dollar homes, they’re going to keep doing the easier of the two.”

Market forces aside, she said two 48-unit apartment complexes in Saratoga would be game-changing for housing the workers who serve the tourism sector that ultimately makes the town’s economic engines go.

And that dynamic is part of what leaves many eyeing short-term rentals, Burau said. But she sees the flip side of the coin too, where short-term rentals are a key component of serving the town’s tourism guests.

“It can serve the local economy,” she said. “It’s just when it becomes this kind of corporate-level machine that’s not benefitting anyone locally as far as income, and it’s changing your community.

“You don’t know who your neighbors are, because the houses are no longer taken by someone who will serve on town council or potentially have kids in school — but those things are hard to measure."

Problem Or Scapegoat?

While some in Saratoga have called for banning short-term rentals altogether or restricting them to certain zones to try and curtail them, others told Cowboy State Daily the housing situation is part of a much bigger picture, one that won’t be affected by regulating Airbnbs.

They also point out that not all short-term rentals are taking housing off the market. In some cases, longtime residents just living in their homes will rent out a spare bedroom to try and make ends meet.

“Airbnb-type rentals have been around forever,” one Airbnb owner named Terri told Cowboy State Daily.

Prior to Airbnb and VRBO, the short-term rentals she helps manage were rented without the benefit of an online site to help, which ensures lodging taxes are collected appropriately. They were instead word-of-mouth rentals.

As she sees it, Airbnbs are being unfairly treated as a scapegoat.

“The housing is a whole lot bigger problem than Airbnbs and VRBOs,” she said.

That’s a sentiment former Saratoga City Council member Joe Glode agrees with.

The root cause, he said, isn’t short-term rentals at all. It’s the result of cash floating around, looking for an investment in the free market. That cash is finding opportunity in the economic disparity between real estate prices in Saratoga and other communities, where home prices are much higher.

“The cause is, you’re bringing a different standard of living in here and injecting it into here,” he said. “You’re taking a piece of property that would ordinarily sell here for $150,000, and you’re getting $300,000. Then you fix it up so it’s livable, and it’s a half a million.”

Now that so many people can work remotely, it’s a trend that’s accelerating in many communities. People are seeking out places where they’d like to play and moving. Wyoming’s own Teton County is leading that trend in the nation, but it’s not the only community where that is happening.

Bringing Tourism To New Areas, Spurring New Houses

Terri also wonders if people really think about the positive impact that short-term rentals can have for communities by providing flexibility in the capacity for housing guests.

That’s a fair question, Gallagher told Cowboy State Daily. So far, the data he collects suggests that communities with short-term rentals tend to build more new homes than communities without them.

“The other thing we see is that they can help expand tourism into places where tourism never was before,” he said. “Like, say, youth sports. They can be in areas where they couldn’t before. They can hold tournaments there because they can house more people through short-term rentals.”

That’s a trend Gallagher said he’s seeing happen across Wyoming.

Wyoming has added about 500 new short-term rentals across the state year over year, according to his data. And most have not been in tourist hot spots like Jackson Hole, which has implemented zoning regulations that restrict where short-term rentals may locate.

“It’s really nice to see sort of a broad base spreading out across the whole state here,” he said. “So that we can, if there are some areas that may have too much tourism, we can shift them over here to some other places that would love to have them. That’s a really nice trend in Wyoming, one that I hope continues.”

Contact Renee Jean at renee@cowboystatedaily.com

Renée Jean can be reached at renee@cowboystatedaily.com.