Ketchum program pays property owners to rent to local workers
Amber Kennedy worked at a pizza shop for the summer last year in Stanley. She and her roommates wanted to stay in the area for a while, so they planned to move to Ketchum as Stanley became less busy. But other seasonal workers told her and her roommates, ‘Don’t even try.’
“A lot of our friends worked and lived down here in the winters, and they were like, ‘No, it’s impossible to find housing,’” she said.
But she and her friends lucked out. They rented a three-and-a-half-bedroom log cabin right in downtown Ketchum.
“We’re able to walk everywhere – the grocery store, wherever – which has been amazing this winter,” Kennedy said.
Real estate prices in Ketchum skyrocketed during the pandemic. Last year, the median house or condo sold for $1.3 million, up from $785,000 in 2019. Now the city is trying to stop the exodus of local workers being priced out by luring property owners with cash incentives if they start renting to locals.
That’s how Kennedy found her rental. It’s part of a city-funded pilot program called “Lease to Locals,” administered by the company Placemate. It pays property owners with under-utilized second homes or Airbnbs to rent to local workers instead.
Kennedy now works at the local branch of a real estate firm.
“In the interview, they asked if I had housing,” she said, “which was apparently huge because it’s very challenging to find people that are wanting to work here and have housing.”
Her roommate Aidan Proctor works at a bar in town. He used to live in Hailey and would drive home after finishing a shift at 3 a.m.
“To be able to live in town, in Ketchum, is sort of very essential to what I do here,” he said.
A change of behavior
Jim Slanetz is their landlord and also a Ketchum City Council member
When the city agreed to spend $500,000 to start Lease to Locals, he abstained from the vote. He wanted to see if his family’s old primary home could ease some of the housing woes.
“It’s hard to live in a mountain town,” he said. “It’s hard to survive and it’s hard to find housing.”
The cabin used to be listed on Airbnb part of the year. Now, renting to Kennedy, Proctor and two other local workers for a year, he gets monthly rent, plus $18,000 from the city.
He said it’s a quick fix to the area’s housing shortage.
“You start the program and people are in there within a month or two,” Slanetz said.
City officials also said it's relatively cheap compared to building housing. Lease to Locals launched in Ketchum six months ago. Now 13 property owners are housing 23 local workers for leases ranging from five months to over a year. So far, the city has spent about $3,700 in incentives and administrative fees to “unlock” each bedroom for a local worker.
Halfway through the pilot period, it had only spent about $120,000 of the budget. Colin Frolich, the CEO of Placemate, said convincing property owners to make the switch to renting long-term is a challenge.
“We have to get them to do something they're not already doing,” he said. “It's a change of behavior. So, the money is really the motivator.”
Lease to Locals started in Truckee, California, near Lake Tahoe, in 2020. Since then, dozens of communities have reached out about bringing it to their towns.
“The common theme is, ‘COVID made things worse, we thought it might get better, it's not getting better,’” Frolich said about what he hears from local leaders in tourism-based towns.
The program is now in five markets, including Ketchum. It’s expanding to Eagle County, Colorado, this summer, and Frolich said he’s in talks with Nantucket, an island off the coast of Massachusetts, too. Other communities like Big Sky, Montana, and Sedona, Arizona, have started offering their own landlord incentives.
Megan Lawson, an economist at Headwaters Economics, said the incentives can be a powerful tool for local governments. They can help cities address a growing number of short term rentals, even in states like Idaho where most regulations on vacation rentals are prohibited. But, the incentives are in the 'short-term solutions bucket,' she said.
“They also need to be thinking about long term housing strategies – ways to increase housing supply for the people who want to live and work in these towns,” she said.
As of now, the Lease to Locals incentives in Ketchum only last a year. Council Member Slanetz would support extending the program, but going forward, he would like to see employers foot some of the bill, not just taxpayers.
“Basically, pay the difference to have their employees live in that housing,” he said.
He thinks that would make the program sustainable.
In addition to Lease to Locals, the city is also in the process of building tax-subsidized housing on city-owned land and is exploring programs to place deed restrictions on houses to keep them in local ownership. There could be more funding for these efforts after a May ballot measure passed that will bring in sales tax dollars specifically for housing initiatives.
In the meantime, Lease to Locals buys time for the city and also renters like Kennedy and Proctor. They want to stay in Ketchum, as long as they can find housing.
Find reporter Rachel Cohen on Twitter @racheld_cohen
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