By JULIANA SUKUT, Daily Column of Bozeman
BOZEMAN, Mont. (AP) – A program in the resort community of Big Sky that offers homeowners money to convert vacation rentals or seasonal homes into long-term homes for locals, which has converted 21 homes and housed 58 residents during his first three months.
After a three-month trial of the Rent Local program, started by the Big Sky Community Housing Trust, the nonprofit launched the full program on November 1. The success of the pilot program came as no surprise, said Executive Director Laura Seyfang.
“This is what we were hoping for,” Seyfang told the Bozeman Daily Chronicle.
The program hopes to convince some 1,200 owners of seasonal homes or vacation rentals to rent to local residents by closing the cash gap the owner could earn from short-term rentals.
The Housing Trust has estimated that homeowners earn on average between $ 3,800 and about $ 10,400 more per year on short-term rentals than on long-term rentals.
“By providing that boost, it’s enough to equalize,” Seyfang said. “We did all of these things to make it easier for a landlord to rent to a local worker, but then there was that difference in cash. By making up for that difference in income, it takes away all those excuses. “
Adding the incentive was much more effective in convincing landlords to rent premises, according to the association. The nonprofit estimates it has created new inventory 89% faster than through some of its other programs.
A program that offered inexpensive property management services and background checks for tenants converted about 14 housing units from vacation rentals to long-term rentals in about a year and a half.
In Big Sky, it takes creativity to solve a severe housing shortage. Big Sky needs about 655 additional homes by 2023 to fill the housing gap, according to the association.
With few local rentals available, around 78% of Big Sky workers commute around 40 minutes outside of town.
Buying a house in the resort town is also largely impossible for local workers. The median price of a single-family home in Big Sky is just under $ 2 million, while the median price of condos and townhouses was around $ 1 million, according to data from the Gallatin Association of Realtors. .
The average monthly rent in Big Sky is $ 1,200 per room and there are virtually no long-term vacancies, according to the association. The median income for a four-person household was about $ 88,900.
Since the pilot a few updates have been made including updating how incentives are awarded.
Originally, the money was allocated based on the length of the lease. An updated formula includes the length of the lease and the number of bedrooms in the house or apartment.
From August to October, landlords who signed leases with locals could get up to $ 14,500 for a two-year lease.
The new formula means that a landlord could receive incentives ranging from $ 2,160 for a one-bedroom apartment rented for 6 months to a maximum of $ 17,820 for a two-year lease on a 4-bedroom house. .
“This is the major change we have made,” Seyfang said.
The program is not a long-term solution, Seyfang said. There are several housing projects underway in Big Sky to add housing, but they can take years to complete.
“Our vision is that we will need it (local rent program) for the next two to three years until we can build more housing,” she said.
Sustaining the program is also largely dependent on securing funding.
The program is funded by donations from the Spanish Peaks Community Foundation and other nonprofits in the region. The organization is also considering re-applying for local tourist tax funding.
One of the current housing projects, the RiverView Apartments, recently received nearly $ 7 million from the Montana Board of Housing.
The Low Income Housing Tax Credit was just one piece of funding needed for the development of 100 units that will be rented exclusively to local workers.
The RiverView project is being developed by the Big Sky Community Housing Trust and Lone Mountain Land Co., a local developer.
The development plan has yet to be fully approved, Seyfang said.
“We have been very persistent and are delighted to have obtained this money,” said Seyfang. “It brings our project to life and helps us move forward.
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