Vermont Short-Term Rentals: Economic, Housing, and Community Impacts

Mar 25

Short-term rentals (STRs) have played an essential role in Vermont's tourism economy for decades. Initially advertised through newspaper listings in the 1950s, the industry evolved with the rise of online platforms like VRBO and VermontProperty.com in 1995, and Airbnb in 2008.

Today, STRs, also known as ‘vacation rentals’, significantly contribute to Vermont’s tourism economy, housing landscape, and local communities. Roughly 75-85% of STR owners operate only one or two properties, and 90% of vacation rentals are used by their owners throughout the year, keeping them unavailable for the long-term rental market (According to sources at Airbnb, Vacasa, Evolve, Stowe Country Homes, Killington Vacation Rentals, Quechee Lakes Rentals, and other local vacation rental management companies).

Economic Impacts

Every year, STRs contribute over $1 BILLION in economic activity across Vermont (Keydata Dashboard, VT Tax Department, Airbnb Market Research).
In 2023, STR reservations generated over $600 million in gross revenue, putting money into the pockets of Vermont homeowners and income taxes in the pockets of the State (Keydata Dashboard).
STR guests contributed an estimated $650 million to local businesses in 2022, with the average traveler spending $1,500 during a three-day stay (Airbnb Market Research).
STRs generated $54 million in Meals & Rooms Tax revenue in 2023, with proposed tax adjustments aiming to increase education funding by an additional $13 million (Keydata Dashboard).
STRs supported approximately 6,000 local jobs in 2023, including property management, housekeeping, landscaping, and maintenance roles (Airbnb Market Research).
60% of Vermont’s Airbnb listings exist in locations without traditional hotel accommodations, making STRs a crucial element of the state's lodging infrastructure (Airbnb Market Research).

Housing Market Influence

Vermont’s overall housing stock has changed minimally since the 1980s (U.S. Census Bureau; AirDNA; VHFA).
3% of Vermont’s housing stock is used as STRs, while 20% is classified as seasonal or second homes (AirDNA; VHFA).
80% of Vermont’s STRs also provide furnished monthly rental periods, filling the rising demand for medium-term housing needs (AirDNA; VHFA).
Since 2019, the number of second homes in Vermont has decreased by approximately 4,000, while the number of primary residences, aka “homesteads”, has increased by an equivalent amount (U.S. Census Bureau).
A study from Maine found that within a county, only 0.6%-3% of short-term rentals are comparable to Naturally Occurring Affordable Housing (NOAH) (Maine Housing Authority, 2023).

Community Contributions

STRs provide livable wages for Vermont’s workforce and create entrepreneurial opportunities for locals.
STRs widen the distribution of visitor spending, benefiting local businesses beyond traditional lodging establishments, including restaurants, retail stores, and outdoor recreation services.
STRs cater to unique traveler needs, including large groups, extended stays, pet-friendly accommodations, and remote work-friendly spaces, making Vermont a more attractive destination.
The majority of STRs are locally-owned and locally-managed, with no significant evidence of corporate investment in Vermont’s housing stock for short-term rental purposes.

Policy Considerations for Lawmakers

Affordable housing experts in Vermont, and studies across New England, indicate that restrictive zoning, rising construction costs, and community opposition to development are the primary contributors to Vermont's housing shortage, rather than STR activity.
Vermont has a reasonable supply of STRs. According to sources at the Vermont Department of Tourism and Marketing, short-term rentals represent 3% of our housing stock, but over 60% of our visitor capacity.
More data is needed to assess the comprehensive impacts of STRs on a region. Baseline data on STR impacts on Vermont’s residents, tourism economy, and housing market is essential for evaluating STR-specific regulations and monitoring changes over-time.

In summary, STRs are a vital component of Vermont’s tourism economy, generating significant revenue and employment while having a minimal impact on housing availability. When properly managed, vacation homes and furnished rentals enhance community engagement, economic diversity, and local business sustainability. Future policy considerations should focus on balancing regulation with economic benefits to maximize the positive impacts of STR opportunities.