12/10/2022
Correction: After chatting with Root Policy, the economic numbers depicted in this video were not for in-town STR's only like I originally thought. Nor were they for all STR's in the county.
They were for what Root Policy called "New Demand" STR's.
Root Policy went on to state that they were not trying to determine the ENTIRE economic impact of all STR’s. They were only accounting for new demand - not demand displaced from hotels.
Furthermore, they said if they included all STR’s, it would lead to overestimated demand for affordable housing created by STR’s and the fee for STR’s would be unfairly large.
While the goal of Root Policy was to find a fair STR fee/tax, they did leave us with enough data to reasonably determine how much these "new-demand" STR's contribute to the economy. Reasonable assumptions can be made about the entire impact STR's contribute to our local economy based on this.
In their technical appendix, they state $14.5M was spent by these new demand STR's with approximately $9.27M spent in our local economy, leaving $5.23M for accommodations. They also state the average revenue per in-town STR's is $31.5k.
This now leads us to believe the approximate number of STR's Root Policy considers as new demand is 166 (5.23M / 31.5k). This translates to the average STR contributing $87k (31.5 in accommodations and 55.8k in spending using the same above ratios). Which based on our original estimate of 1,256 STR's leads to total revenue of around $109.6 Million. I was about 42 units off in my original calculations.
Overall, these numbers will fluctuate based on certain assumptions. And Root Policy confirmed that they did not account for times where STR owners stay in their own properties since these stays are blocked off from AirBnB and not included in the AirDNA numbers. Since only 29% of STR's are available to rent for over 270 days, it's our estimation that the average owner stays in their own units anywhere from two to four weeks, contributing an additional $7M to $14M in our local economy when accounting for all STR's.
Root Policy even confirmed that only 40% of homeowners here are full-time when the nation's average in 2019 was 64.9% according to the Federal Reserve's Survey of Consumer Finances. When it's all said and done, while I did get the categorization of these STR's wrong, I believe the big picture here is still correct. STR's play a minimal role in affordable housing. After corrections, the numbers in this video are close to the total economic impact of STR's.
