Last year, the most sought-after Airbnb property in North Carolina was a romantic treehouse. Located 20 minutes from Asheville, this “oasis in the woods” offers luxury bedding, a hot tub, and a view of the surrounding forest from high above. Set down a gravel road and accessible via a swinging bridge, it costs $300-a-night.
Few would confuse it for a viable long-term housing option (eccentric millionaires aside). The luxury treehouse shows how some short-term vacation rentals don’t overlap with the typical residential market.
However, for every treehouse, there are functional properties, like Rachel Baran’s one-story home in Haywood County, that could either be leased to a long-term tenant or posted on a short-term rental site like Airbnb. Soon, Baran will have to decide.
Baran, 26, is a cut flower farmer who works part-time at a brewery. Her current home is approximately 1,200 square-feet and stands halfway up a mountain near the edge of Waynesville, the largest town in Haywood County. It has a rustic teal exterior, a one-car garage, and, in Baran’s words, “a banging view.” This summer, she plans to move to the nearby plot of land and must decide what to do with the house she’s leaving.
On the rental market, she figures it could fetch around $1,100 a month, enough to ensure the mortgage and provide property maintenance. But Baran believes she could bring in more money, with less liability risk, if she offered the home to short-term vacationers.
“I feel like we had a lot more success with Airbnb than we did listing a bedroom for long-term,” she said of past experiences she and her fiancé had renting out a single room in their house. “When the time comes, which will probably be in the next few months, we’ll have to start figuring out what would be more economic for us.”
While Baran remains on the fence, more Haywood homeowners are preferring to book short-term rather than signing leases with long-term tenants. In the past five years, the rural county has seen a 900% spike in Airbnb listings, according to AllTheRooms Analytics, which researches the short-term rental market.
Sensing their properties are hot commodities for tourists, homeowners are ratcheting up the supply. Last year, short-term rental listings rose 15% in Haywood County, according to AllTheRooms, more than three times the state’s overall increase.
“If you’re going through Airbnb, you can make four times as much on the property,” said Heather Boyd, executive director of the Smoky Mountain Housing Partnership, a Waynesville-based affordable housing nonprofit. “That is just a more successful way to go as far as business.”
Meanwhile, the overall housing stock in Haywood County hasn’t kept pace, as developers struggle to build efficiently on the region’s sloped terrain. As supply lags behind demand, home prices have risen, and an already tight housing market has been squeezed even tighter. It’s a dynamic that extends beyond Haywood, many said, to popular destinations across the state’s western reaches.
Rental regulations common in larger cities have largely been absent in these rural communities, though that might be starting to change. As short-term rentals continue carving into the long-term housing supply, more residents are asking how a booming market – which brings tourists and tax dollars to their communities – could be better controlled to help more local residents find rooms.
Getting landlords off Airbnb
Since the pandemic began, demand for short-term rentals in Haywood County have intensified as tourists bypass cramped cities to enjoy the area’s open spaces and proximity to two major mountain ranges, skiing, white-water rafting, hikes, and – for a change of pace 30 minutes to the east – downtown Asheville. The flexibility of remote work and virtual school make a stay in Haywood even more feasible. According to Lynn Collins, head of Haywood’s Tourism Development Authority, the county received a “record-setting” number of visitors over the second half of 2020.
Many booked Airbnbs.
Founded in 2008, Airbnb controls around 65% of nation’s online short-term rental market according to AllTheRooms. In what’s often called the “Airbnb effect”, researchers found that Airbnb listings increase by 1% increase in an area, rents increase by .018% and home prices by .026%. These amounts may seem minuscule but can add up when the local short-term rental markets soar.
In response, cities across the country (and world) have enacted limitations and restrictions on short-term rentals. In Asheville, a major tourism hotspot, homeowners wishing to rent to short-term guests need a special permit from the city and can’t rent out their entire homes for less than a month.
But in Haywood County, the online short-term rental market is relatively new and unregulated. Some suggest that residents and local officials in the more conservative-leaning county might resist government regulations. While not a conservative, Waynesville native Kasey Valentine-Steffen believes there’s a better way beyond regulations to control the number of Airbnb listings.
Valentine-Steffen works for Helping Hands of Haywood, a nonprofit that assists local residents who are experiencing homelessness and housing insecurity. Western North Carolina’s housing stock, she said, is drastically limited.
“We try to get people into housing which can be pretty much impossible,” she said. “Like it doesn’t matter how much money we have in the bank, there’s nothing there.”
In October, she started contacting owners of Airbnb properties – over the phone and social media – to persuade them to rent to long-term tenants instead.
“I just want people to be educated and aware that their decisions impact other people,” she said. “A lot of people, when they find out the struggle of what’s going on and realize that there’s something they can do to help, then they want to help.”
She focuses mostly on owners who have multiple housing units and who had previously rented to long-term tenants. Small-scale landlords like Baran, she understands, may be more reliant on short-term rentals to supplement their incomes and cover their mortgages.
Over the past few months, Valentine-Steffen has connected with around 50 property owners, and around 10%, she estimated, agreed to reopen rooms to long-term tenants. This rate has been encouraging enough to keep her reaching out to more.
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Struggling to stay
Since early 2016, around the time Airbnb gained traction in Haywood, the county’s median home price has jumped from $159,000 to $226,000, a rise of more than 40%. According to the Smoky Mountain Housing Partnership, more than half of all Haywood renters are currently cost-burdened, meaning they spend more than 30% of their budgets on housing.
But being cost burden is better than being without a home said Kaylee Kempton, an Amazon delivery driver without a permanent residence in Western North Carolina. Since November, Kempton, 28, has bounced between friends’ homes as she searches for a permanent place within 45 minutes of the Amazon distribution center in Henderson County. She has joined a few Facebook groups for Mountain-area housing, but the posts from people “ISO” or “in search of” housing far outnumber those offering rooms.
“There’s waitlist after waitlist for housing,” Kempton said. “It is extremely expensive here to live. It’s hard for anyone to live here without help or a game plan or a lot of saved money.”
She currently pays $10 a night to an acquaintance for a room in the Haywood County town of Canton, but she’ll have to move out by the end of March. Another apartment in Canton seems like a possibility, for $800 a month, plus gas and electric. Kempton makes $16 an hour, so the rent would leave her cost-burden, but she’d eagerly accept it.
Yet short-term rentals alone don’t account for the region’s housing crunch.
The region’s “flat, developable land” limits new housing construction, Waynesville Alderman Jon Feichter said. According to a planning report published in September called “Waynesville 2035”, only 1% of the city’s 5,900 housing units have been built in the past decade. The topography of many surrounding areas – from the Blue Ridge Mountain foothills to the Tennessee border – is similarly uneven.
The overall beauty and tranquility of the mountains also attract newcomers with deep pockets who snatch up available housing as their primary residences, second homes, or as investments. Among Haywood County’s existing housing stock, a significant portion, 22%, is taken up by second-home owners who split their time between Western North Carolina and a primary residence outside the area.
“It’s hard to compete with cash and quick closings,” said Heather Boyd, of the Smoky Mountain Housing Partnership, which formed in 2019.
Boyd pointed out that Haywood’s tourism-based service economy generates more than 1,700 jobs a year, but that many pay relatively low wages, a fact backed up by another line in the “Waynesville 2035” report: “Unemployment is low, but the town’s poverty rate (23.1%) is relatively high compared to North Carolina.”
Boyd said teachers and nurses are also struggling to keep up with climbing rents, leaving her concerned that integral employees will leave the region. “It’s really important as a community to feel as a whole that we’re keeping those folks here, so that they’re not having to uproot their familiar to either find higher-paying jobs in the same field or lower rent.”
Sara Green, 31, a personal assistant and housekeeper in the Macon County town of Franklin, said housing costs might soon drive her out of Western North Carolina. Her rent will increase from $600 to $1,000 in May, a decision made after new owners purchased the property.
“A lot of houses in Franklin have gone up in price because there’s an influx of people moving to rural areas right now, from Atlanta especially,” Green said of the major city only two hours south of Franklin. “So (the new owners) wanted to compete with the prices that other people have been raising their rents to.”
She’s gotten assignments to clean Airbnbs in recent years, though she believes second-home purchases drive up local costs more than short-term rentals for now.
With their lease up in a few months and no strong housing prospects despite months of searching, Green said she and her boyfriend may move to Eastern North Carolina to live with her parents until they can land more permanent housing.
“It’s not ideal, but at least we won’t be homeless,” she said. “We’re fortunate enough to not be in that position.”
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Despite its impacts, local officials and advocates both say whether to regulate short-term rentals hasn’t been a hot-button issue in Haywood.
“We haven’t had a lot of backlash to them,” said Phillip Wight, a councilman for the town of Maggie Valley.
The vacation properties that eat into the overall housing supply also attract thousands of tourists who spend money and contribute tax revenues to communities across the county. Others, like the secluded luxury treehouse, bring in visitors without impacting the overall housing stock.
“Obviously, if we had not had these folks come in, especially during the pandemic, a lot of our retail and restaurants would be a lot worse off than they are,” said Lynn Collins, who has served as executive director of Haywood’s Tourism Development Authority since 2009.
But as the officials hear more concerns about short-term rentals, – in letters to the editor and during public comments at board meetings – Collins said local leaders are beginning to explore what regulations could look like.
“We have just started delving into that more deeply,” she said.
The “Waynesville 2035” report, which calls short-term rentals a threat to housing inventory, advises the town to consider enacting land use standards that manage where these rentals may operate. In December, the Haywood TDA hired a firm to audit the local short-term rental market, to give officials a better sense of where properties are currently located and to ensure their owners pay Haywood’s 4% room-occupancy tax.
Beyond Airbnbs and Vrbos, residents say there’s a growing consciousness of an area’s critical housing issues.
“There is momentum for affordable housing here,” said Feichter, who has serves on the county TDA board as well as being a Waynesville alderman.
In 2016, the county formed an affordable housing task force, and Waynesville is in the process of adding hundreds of housing units, including a project to convert a former hospital into affordable housing.
Yet with the appeal of Western North Carolina unlike to wear off anytime soon, pandemic or not, it’s unclear if any current initiatives are enough to alleviate the effect of Airbnbs.
Brian Gordon is a statewide reporter with the USA Today Network in North Carolina. Reach him at [email protected] or on Twitter @briansamuel92.