The Pros And Cons Of The Growing Demand For Vacation Rentals

As West Virginia becomes renowned for its outdoor tourism spots, short-term vacation rentals like Airbnbs and Vrbos are increasingly in demand.

These companies are part of the same gig economy as ride-sharing apps like Uber, or food delivery services like Doordash – they act as online marketplaces that connect property owners with tenants for a short period. They’ve become increasingly popular as an alternative to hotels, allowing tourists to stay in unique lodgings in the communities they’re visiting.

Jamie Lopez, a real estate agent based in Martinsburg, has been an Airbnb owner and consultant for six years.

“I think about 25 percent of my traffic comes from tourism,” Lopez said. “And when I tell local people that people are actually coming to Martinsburg to be a tourist, it shocks them sometimes.”

Lopez says the average Airbnb renter tends to be more invested in the community they’re staying in, noting they spend more money in town and contribute more to the local tourism economy.

“The same $100 spent on an Airbnb spends about $100 in town. They spend multiple days in town. It’s a huge difference, the traveler that stays in an Airbnb,” Lopez said.

West Virginia’s Secretary of Tourism Chelsea Ruby says the state has been monitoring the growth of short-term rentals for some time. She says the state has seen a huge increase in the sales tax revenue from what are called “marketplace facilitators” like Airbnb since 2019.

“In the month of August of this year, there were $10.6 million in taxable sales, and the state collected $638,000 in sales tax on these properties,” Ruby said.

That’s an increase of more than 350 percent since the state began collecting sales tax from these companies three years ago.

For the companies’ part, they’ve made more than $100 million dollars in in-state revenue over the past year, with around 4,400 vacation rental listings statewide. The popularity of these rentals has gotten such that West Virginia’s tourism office has partnered with the rental sharing company Vrbo to promote some of the state’s tourist destinations.

“We’re clearly one of the fastest growing vacation rental states in the country as far as new rentals coming online,” Ruby said. “But we’re lagging behind in consumer education, meaning that we’re quickly becoming a vacation rental state, but we haven’t told the world that we’re a vacation rental state.”

But the success of short-term rentals across the state’s real estate and tourism industries could be putting a strain on local workers, especially in more rural areas. Daniel Eades, associate professor and rural development specialist for WVU Extension, says it makes it harder for workers to find housing in the communities they work in.

“This ends up causing real problems when those rental properties that folks could afford at $750 are now being used as short-term rentals where the owner can get $1,000 a month,” Eades said.

It’s not a problem that’s unique to West Virginia, but rural communities in the state are seeing the effects. A town hall meeting document from Davis in Tucker County says 30 housing units in the town have been converted into short-term rentals as of last February.

“I think the absolute number isn’t that high,” Eades said. “But when your town only has 500 homes, that’s five percent of the housing stock that’s potentially been taken out and is being used for short-term rental.”

As one of West Virginia’s premiere vacation areas, around 37 percent of Tucker County’s housing units are second homes. The county average in West Virginia is 3.9 percent, and the national average is 3.1 percent.

But property owners converting homes into Airbnbs isn’t the sole reason why housing is hard to come by in rural communities. Emily Wilson-Hauger of Elkins-based community development organization Woodlands Development and Lending, says it’s an issue that dates back to the Great Recession and housing crisis of the late 2000s.

“I think just the lack of any significant housing being built in the last, you know, 10, 12 years is at play,” Wilson-Hauger said. “High construction costs in the area, it’s pretty remote. Developable land is really hard to find.”

Old housing stock and a stagnant market led to a shrinking workforce in areas like Tucker County. In 2015, Woodlands launched an assessment of housing needs in the area.

“The bigger issue is that even at that time, the employers, the major employers and the small businesses, were saying they could not find enough workers,” Wilson-Hauger said. “Almost everyone we interviewed, every focus group, those employers attributed that to the lack of workforce housing.”

A more recent housing assessment made by economic development consulting firm Downstream Strategies says there is an estimated deficit of 321 units of workforce housing in the county.

State leaders have recognized the issue and are trying to fix it. House Bill 4502 was passed during the legislature’s last regular session, which encourages the development of new housing in the communities that need them by offering tax credits to development companies.

The bill officially took effect in September, and Chelsea Ruby says the tourism office is working with the Department of Commerce and Department of Economic Development to designate areas in the state in need of more workforce housing. She says it’s a way to support these local communities so that they can in turn support the influx of tourists.

“There are a good number of state and federal credits that help with low-income housing,” Ruby said. “But, well, we don’t have our incentive programs to help with that middle market housing, which is exactly where these houses come into play.”

Wilson-Hauger and her team at Woodlands are doing their part to help as well. They’ve just finished building an eight-unit townhouse project in Tucker County and have plans for a larger workforce housing subdivision in the future.

“All the things that go into a development like that will just take time, because we are targeting this median income range, where there’s not a lot of public subsidies to support it, like there is for very low-income households,” Wilson-Hauger said.

And though housing remains a need, they think they can strike a balance between vacation rentals and providing comfortable, long-term housing for the locals that need it.

“I use Airbnb and when I go on vacation, too, you know, they are a very fun way to experience the community and the destination, they can be a really great wealth generator for families,” Wilson-Hauger said.