If it seems like your neighbor’s house is continually occupied by a never-ending stream of families with kayaks, canoes, ski pods or mountain bikes strapped to their cars, there’s a good chance you live in Vermont.
According to a real estate study this year, Vermont has the second-highest percentage of second homes in the nation.
Greensboro leads the parade, with 81 percent of houses as second homes. In Stowe, a whopping 70 percent of properties are taxed at a non-homestead rate, meaning the owner doesn’t use the property as a primary residence, said Tim Morrissey, Stowe’s tax assessor.
Across the state, second, third or even fourth homes make up about 17 percent of Vermont’s houses, according to a study by IPX1031, an investment property exchange company.
Ahead of Vermont is Maine, at No. 1, with New Hampshire following at No. 3, according to the study, whose authors said they researched vacation home data from more than 29,000 census-designated places in all 50 states.
Using data from 2017, the company found that 58,500 homes in Vermont qualify as vacation homes, while 19 percent of the homes in Maine — about 143,300 — and nearly 12 percent of the homes in New Hampshire — about 75,000 — were vacation homes.
By the numbers
Stowe has 3,836 taxable properties. Morrissey said that includes vacant land, commercial properties, apartments, farms, condominiums and single-family houses. So, while not all non-residential properties are second homes, a fair number fall into that category.
Right now, Stowe has 1,142 declared homesteads — that is, primary residences, Morrissey said.
In Waterbury, there are 2,235 taxable properties, including vacant land and commercial properties, according to Beth Jones, Waterbury’s assistant town clerk, and 1,411 of them are taxed at a homestead rate; that means about 63 percent of properties in Waterbury are primary residences.
In Elmore, a lake community with cabins and camps aplenty, 50 percent of its taxable property base comes from non-residential properties.
More and more people looking to sink money into Stowe’s vacation home market, says McKee Macdonald, a Realtor with Coldwell-Banker Carlson Real Estate in Stowe.
“We’ve seen a major increase. I would say that when I started, when I moved back almost 10 years ago, it was still below the 50 percent mark of second- or third- or fourth-home owners in Stowe, and we’ve seen that steadily grow,” Macdonald said. “We’re looking at a homeowning market of greater than 50 percent for second, third and fourth homes in the area.”
That hasn’t applied to Waterbury until recent years, Macdonald said.
“Traditionally Waterbury had trended more toward a primary home market with easy commuting distance to Burlington and Montpelier, but with lower inventory in Stowe we have seen some second-home buyers considering options from Waterbury Center north,” he said.
Macdonald says a generational shift is a big part of the increase in vacation home purchases in Stowe.
He says in the 1980s, Canadian homebuyers made up a big chunk of the market, but “that market has disappeared and has been replaced by people from Boston, New York, Connecticut, even D.C. … The economy’s gotten stronger and they have the financial wherewithal to buy a second home in Stowe and make a go of it,” Macdonald said.
And the financial bar is getting lower to enter the second-home market with the rise of short-term home rental sites like Vacation Rentals by Owner (VRBO) and Airbnb.
According to Airbnb data, 22,100 guests arrived in Vermont during the holiday season, including Christmas Eve to New Year’s Day last year.
Stowe was the second most popular Vermont destination for Airbnb guests last season, right behind Rutland with the nearby Killington ski area, and followed by Burlington, Ludlow and Dover.
Tech-savvy owners can rent their places out easily, “whether they work in tandem with a local property manager or they turn it over themselves,” Macdonald said. “The ability to pull income from these houses is much easier than it has been in the past. That opens up a lot of affordability for people who are maybe on the cusp of being able to afford a second home.”
Unemployment is low in Lamoille County — the lowest it’s been since 2007, according to Lamoille Housing Partnership data and jacked-up rental rates could prevent people from coming to Stowe to take jobs in its restaurants, shops, lodging properties and businesses.
Macdonald says rents in Stowe and the surrounding area are increasing, a perspective backed up by Lamoille Housing Partnership data.
Just 418 units in Lamoille County and Hardwick qualify as affordable, considering the median income — that’s 30 percent or less of total household income.
The average Vermont renter makes $13.40 an hour and can afford to spend about $700 per month on rent, according to a report published by the National Low Income Housing Coalition. But the average statewide fair market rent is much higher: $1,184 per month for a two-bedroom apartment and $945 per month for a one bedroom.
Macdonald said average rent for a one-bedroom apartment in Stowe is between $1,000 and $1,100, and utilities are often not included.
That’s due, in some part, because landlords have realized they can net more cash with short-term rentals than establishing relationships with tenants.
“When you factor in the other costs of living here, cars, health care coverage, it can become tough. It’s even tough if you’re willing to live outside of Stowe. Live in Morrisville, you’re looking at not that great of a difference. I know apartments in Hardwick where we’re seeing north of $700 for a one-bedroom,” Macdonald said.
Ripple effect on the workforce
Patti Clark, innkeeper at Green Mountain Inn in Stowe, says about 20 percent of the inn’s staff is accommodated for with staff housing provided by the inn.
Resort staff pay $90 a week for housing, and most staff members get their own bedroom and bathroom, Clark said.
About 20 years ago, Green Mountain Inn purchased the old Crimson King Motel property on Route 100 in Morrisville to house staff, and this year, it rented a few more houses for staff accommodations, Clark said.
“It’s very helpful, and I’m sure it’s why they continue their employment here. It gives them security and a place to call their own,” she said.
Stowe Mountain Resort also offers some employee housing at and near the resort — about 130 beds in all, said Jeff Wise, communications director for the resort.
“We provide a portion of our staff with housing through a mix of leased and owned properties, and we also plan on increasing the number of beds we lease for staff housing,” Wise said.
At Sugarbush Resort in Warren, owner Win Smith, who seeks to add 500 or 600 winter people to his summer workforce of 460 full- and part-timers, has said he cannot attract workers because they can’t find a place to live. Last year he bought a local inn to use as housing for workers, and he plans to add more rentals in the coming season.
Sugarbush draws its ticket-holders from a large pool of second-home owners in the Mad River Valley, and Smith characterized the high rate of second-home ownership as a “mixed blessing.” But he noted that Airbnb, VRBO, and other online vacation rental companies — which are often used to rent those second homes when the owners aren’t using them — had made it difficult for renters to find short-term housing while working at the resort.
“Looking at the valley here, there are a tremendous number of homes on Airbnb and VRBO that were not a few years ago,” Smith said.
Smith has deployed a summer intern to find out exactly how many online rentals there are in the valley. There is no statewide source of similar data, although some affordable housing organizations have said it would be useful to them.
“I bet we’re going to be surprised about how many are actually out there,” Smith said. “It gives you a good indication of how much capacity we have. In the old days, you sort of knew, because you knew how many rooms there were in existing hotels. This has added a totally new dimension.”
Second home ownership is an important part of the tourism picture in Vermont, which sees nearly 13 million visitors each year, according to the state’s division of Tourism and Marketing. Visitors spend about $2.5 billion on lodging, food and drink, goods and services, the division says.
Vermont is well-positioned as a place to attract second home owners, with Montreal less than two hours away to the north, and Boston two and a half hours from the southern Vermont ski areas. New York City is about five hours south of Killington, the state’s largest ski resort.
In March, Forbes magazine published a list of the most profitable places to own a short-term rental, and Killington was in the top five.
“We always have to seek the balance but we do benefit greatly economy-wise, property-tax-wise from having the second-home market,” Macdonald said. “It is something that can cause some issues like housing affordability but at the same time, we do see rewards and positive aspects from it. It’s a balance that I know a lot of towns strive for and I think Stowe does a pretty good job.”
VTDigger contributed to this report.