In this brief, we examine four localities that are popular tourist destinations: Provincetown, Massachusetts; Big Sky, Montana; Moab, Utah; and Frisco, Colorado. These areas have small year-round populations but significant numbers of seasonal tourists that strain the local housing supply. Each has crafted a unique strategy to tackle their housing needs by combining several different policies.
Provincetown, MA
Population: 3,664
Key features
- Provincetown has a community impact fee enabled by Massachusetts state law that applies to certain short-term rentals.
- The town also established limits on the number of short-term rental licenses certain operators can hold.
Read more about Provincetown, MA, here.
Located at the top of the Cape Cod peninsula, this coastal town is a popular summer destination and sees most of its tourist activity during that time. However, it has experienced rapidly climbing housing costs that have grown more quickly than local incomes. From 2014 to 2023, the cost of a single-family home in Provincetown increased by 98 percent. As of 2023, the median price of a single-family home was slightly more than $2,000,000, while the median price of a condo was slightly over $800,000. The town estimated that the median rent for a one-bedroom unit was about $1,900.
In contrast, the 2022 median income in Provincetown was about $96,000. And the median income for the town’s accommodations and food service workers – industries crucial to supporting tourism – was significantly lower, at about $49,000. To afford a one-bedroom rental at $1,900, a household would need to make $76,000 per year.
Rising housing costs in Provincetown are attributable in part to owners of second homes whose incomes are significantly higher than the town’s median income. Seasonal homes, including short-term rentals, account for 57 percent of Provincetown’s housing stock, while only 40 percent is year-round housing. Additionally, as remote work increased in popularity during and after the COVID-19 pandemic, high-income remote workers also began competing for the town’s housing stock. Therefore, long-term Provincetown residents struggle to find affordable housing as they compete with higher-income non-locals for a shrinking number of housing units available to rent.
Provincetown has implemented several policies to prevent short-term rentals from becoming too large a share of the town’s housing stock and keep individuals or corporations from creating large short-term rental portfolios. In 2022, town residents voted to establish a community impact fee on certain short-term rentals. The fee is set at three percent of the total rent charged and applies to short-term rentals that are “professionally managed.” The town defines professionally managed short-term rentals as non-owner-occupied single-, two-, or three-family dwellings with an operator who owns two or more short-term rentals in Provincetown. Revenue from the community impact fee is earmarked for a Provincetown affordable or community housing trust fund. In the past, the town’s affordable housing trust fund has supported down payment, closing cost assistance, and a local housing voucher program. Notably, Provincetown’s community impact fee is a local option fee enabled by Massachusetts state law. Localities in other states may be unable to enact a community impact fee if their state’s laws do not allow it.
The town also introduced three policies related to short-term rentals in October 2023: one establishing that a single operator may only own up to two short-term rentals, one banning fractional ownership of short-term rentals, and another banning corporate ownership of short-term rentals. Specifically, corporations are not allowed to obtain short-term rental certificates through the town’s Board of Health, although short-term rental certificates already held by corporate owners are grandfathered in, and those rentals may continue to operate. Similarly, owners with more than two short-term rental certificates before Provincetown approved these policies can keep those certificates. Finally, Provincetown charges higher fees for rental certificates for short-term rentals than long-term rentals. Short-term rental certificates must be renewed once a year for a fee of $750. Long-term rental certificates, on the other hand, are renewed every three years for a fee of $300. This fee structure incentivizes property owners to make their properties long-term rather than short-term rentals.
Big Sky, MT
Population: 3,591
Key features
- Big Sky has a resort tax on luxury goods and services, which it uses to fund infrastructure and affordable housing development.
- The town’s housing trust offers property owners cash incentives to rent to local workers or accept a deed restriction requiring that the occupying household be part of the local workforce.
Read more about Big Sky, MT, here.
Big Sky, MT, is a popular ski destination that sees a significant influx of tourists and seasonal workers during the winter months. A growing number of short-term rentals in Big Sky has decreased the housing supply available to local residents and driven up housing prices. According to the Big Sky Community Housing Needs Update, the number of short-term rentals in Big Sky increased by 33 percent between 2018 and 2022. As a result, in 2022, 20 percent of housing units in Big Sky were short-term rentals. Additionally, rapid job growth (both seasonal and year-round) has drawn more people to the area and increased competition for what little affordable housing is available, and wages have not increased enough to keep up with rising housing prices. While Big Sky wages increased by 8.6 percent between 2016 and 2021, the average rent increased significantly more in a similar timeframe: between 2018 and 2022, rents rose by 38 percent. The Housing Needs Update reported that to replenish the housing supply and create affordable units for locals, the town would need approximately 809 new housing units by 2027, 575 of which would need to be below market rate.
Big Sky has several programs focused on creating or reclaiming housing stock for local residents. These programs are largely funded by the community’s resort tax and administered by the Big Sky Community Housing Trust (BSCHT), an independent nonprofit formed in 2016 by the Big Sky Chamber of Commerce and the Human Resource Development Council. The current iteration of the resort tax, originally established in 1992, imposes a four percent sales tax on luxury goods and services, which include short-term rentals. A quarter of the revenue from the resort tax is dedicated to funding infrastructure. The remainder of the revenue is used for public safety, conservation, and economic development. Currently, the infrastructure funding created by the resort tax is helping expand a Big Sky County Water & Sewer District wastewater treatment facility. As part of the agreement to help fund the facility’s expansion, the District agreed to reserve future water/sewer capacity for approximately 500 deed-restricted workforce housing units.
BSCHT has two programs to reserve housing stock for locals: Rent Local and Good Deeds. Through Rent Local, established in 2021, BSCHT offers cash incentives to Big Sky property owners to rent their vacant homes, rental properties, or spare bedrooms to local workers for at least one year. The cash is meant to offset the higher profit these owners could make by renting instead on the short-term market. For a one-year commitment, the incentive amount for new participants ranges from $5,400 for a one-bedroom to $8,100 for a four-bedroom. If the commitment is for two years, it ranges from $11,880 for a one-bedroom to $17,820 for a four-bedroom. Returning property owners (those who have already participated in the program for two years) receive slightly reduced amounts. BSCHT imposes caps on the amount of rent that participating owners can charge, but the cap is not lower than market rate. By the end of 2023, Rent Local had funded 149 homes, and in 2024, the program reached capacity for participating owners.
The Good Deeds program began in 2022, shortly after Rent Local. Through this program, BSCHT pays homebuyers and owners to place a permanent deed restriction on their property. The restriction requires at least one member of the occupant household to work an average of 30 hours a week in Big Sky and earn at least 75 percent of their income there. The cash incentive never exceeds 20 percent of the property’s appraised value, and while the property can be owner- or renter-occupied, it cannot be a short-term rental. By the end of 2023, BSCHT had purchased eight deed restrictions through Good Deeds.
BSCHT has also used resort tax funding to build affordable housing that is deed-restricted to local workers. To date, they have built three developments, financing these projects through a combination of sources, including Low Income Housing Tax Credits (LIHTC), the American Rescue Plan Act (ARPA), foundations, and resort tax funds. In addition, they have contributed their designated workforce housing water rights to a partner developer. By the end of 2023, BSCHT had created 209 workforce-restricted housing units.
The City of Moab and Grand County, UT
Population: 5,221
Key features:
- The City of Moab requires that developers of overnight lodging either construct affordable housing units or pay a fee, although they have since placed a moratorium on overnight lodging construction.
- The surrounding county has a High-Density Housing Overlay program that allows developers to build more densely as long as a portion of the units they create is deed-restricted to local workers.
- The city also has a policy requiring a portion of new units constructed in two particular zoning districts be deed-restricted to local workers.
Read more about Moab and Grant County, UT, here.
Moab, the county seat of Grand County, Utah, is a community situated near the Arches and Canyonlands National Parks, which draws thousands of tourists per year. As a result, 57 percent of jobs in Grand County are in the tourism industry, according to the 2023 Moab Area Affordable Housing Plan. In 2015, following state tourism campaigns, social media attention, and the growing popularity of short-term rentals — all of which attracted even more tourists to the area — the size of Moab’s tourism workforce began exceeding what the community’s housing stock could support. The combination of limited developable land in Moab, due in part to adjacent federal land, and the rising number of second homes, short-term rentals, and investment properties, created a housing shortage. This issue is particularly acute when seasonal workers temporarily move to the city. In 2021, 36 percent of households in Grand County spent more than 30 percent of their income on housing, including 65 percent of households with incomes under $50,000. Meanwhile, short-term rentals accounted for 19.3 percent of the county’s housing stock, and the county is projected to need 949 new housing units by 2030, 74 percent of which must target households with incomes under $75,000. City staff reported that the lack of affordable housing in Moab prevents workers from living in the city, which shrinks the local labor pool and makes it difficult for businesses to find staff.
To remedy its housing shortage, both the City of Moab and Grand County have implemented policies to increase the production of affordable workforce housing and curb the spread of overnight tourist accommodations. In November 2018, Moab’s City Council unanimously passed Ordinance 18-20, which mandated that developers of overnight lodging either build affordable housing units or pay a fee in lieu of construction. Units constructed in accordance with this ordinance must remain affordable for at least 50 years, and at least one member of the household occupying the unit must be employed in the city or county, have a disability, or be over 60 years old and retired. Funds generated by the in-lieu fee are held separately to be used for the creation or maintenance of affordable housing. The fee is based on the total floor area of the overnight lodging and varies according to the lodging type, ranging from $5.18 per square foot for condos to $15.57 per square foot for hotels and motels. Although the city had implemented Ordinance 18-20, it did not disincentivize developers from building more overnight accommodations, raising concerns for the city that most developable land was becoming overnight lodging while other development needs like retail spaces and housing went unmet. In response, the city passed Ordinance 19-18 in 2019 removing overnight accommodations as a permitted use in all zones. As of 2024, this moratorium was still in place, and the city approves new overnight accommodations sparingly.
Also in 2019, Grand County launched its High-Density Housing Overlay (HDHO) Program, which established HDHO districts wherein developers can apply to build housing that exceeds the usual maximum density allowed in the zone. In return, at least 80 percent of the units they build must be deed-restricted to households with at least one member who is a local worker, a person with a disability, or a retiree. Similarly, in 2022, the City of Moab amended its municipal code to require that new developments in two districts (the Multi-Household and Manufactured Housing Residential Zones) allocate 33 percent of their units to households with at least one local worker, a person with a disability, or a retiree. Both measures were intended to help meet the area’s projected need for additional affordable units and remedy Moab employers’ struggle to hire from a shrinking workforce.
The Town of Frisco and Summit County, CO
Population: 2,913
Key features:
- The Town of Frisco offers cash to property owners in exchange for accepting a deed restriction requiring that tenants be local workers.
- The town also grants density bonuses to developers who agree to deed-restrict a portion of the units they create to local workers.
- Summit County, where Frisco is located, has multiple taxes and fees in place that help fund affordable housing initiatives.
Read more about the Town of Frisco and Summit County, CO, here.
Frisco, Colorado, is a mountain town located near several major ski resorts. It draws most of its tourists during the winter skiing season and an influx of seasonal workers as well. Over the past decade, Frisco and Summit County have suffered a growing housing shortage driven in part by an expanding short-term rental market and an increasing number of second homes. A 2019 housing needs assessment for Summit County found that the area had a housing gap of 2,400 units and that the housing available was not affordable to local workers. Furthermore, in the three years leading up to the completion of the housing needs assessment, 35 percent of all new housing units in Summit County were bought by people from outside the county. Housing purchases by these buyers have contributed to rising overall housing prices and have reduced the number of homes available to local residents. The short-term rental market has also grown: Frisco’s annual growth rate of short-term rentals was 40 percent between 2011 and 2018. As of 2021, 17 percent of Frisco’s housing stock was short-term rentals, with most owners of based outside of Summit County.
Over the past two decades, the Town of Frisco and Summit County have implemented several policies to create more affordable housing for the local workforce. Frisco has also been working to meet its goal of increasing full-time residents to 50 percent of its population. In 2021, Frisco established its Housing Helps program, wherein the town pays 10 to 15 percent of a property’s value to its owner. The exact percentage depends on market conditions and the extent to which the home “meets the current needs in the community.” In exchange, the owner must accept a deed restriction requiring that occupants of the home (both owners and renters) be local workers. Frisco also offers a density bonus to incentivize the construction of housing units for members of the local workforce. The policy allows developers to override zoned density restrictions as long as 50 percent of the additional units (those in excess of the district’s default density maximum) are deed-restricted to local workers.
Summit County has several taxes and fees that generate revenue to support affordable housing, among other initiatives. In 2006, the county instituted Measure 5A, which includes both a 0.125 percent sales tax and a development impact fee. Measure 5A funds are used for workforce housing purposes, such as land purchases or new construction, and also support the county’s housing authority. The county has also used Measure 5A funds to waive development fees for the construction of affordable units that are deed-restricted to local workers. Voters renewed Measure 5A indefinitely in 2015, and by 2025, it had generated $13 million in revenue and supported the purchase and development of land to build 155 housing units. Out of those 155 units, 115 are affordable at levels ranging from 80 to 160 percent of the area median income (AMI). The county also generates revenue from Measure 1A, a countywide property tax levy authorized for 12 years. Voters originally passed Measure 1A in 2008 and renewed it in perpetuity in 2019. Measure 1A generates about $1.5 million in annual revenue, which funds affordable housing projects and other community initiatives. Finally, in 2016, Summit County voters authorized an additional 10-year sales tax of 0.6 percent to be used for constructing or otherwise supporting affordable workforce housing for locals.