How to Save a Ski Town

>Unchained from their desks, the hordes of newly remote white-collar workers descended upon all the magical mountain towns, and in just one year, the median list price for a home in Crested Butte jumped 40 percent, to $895,000. Rents soared, too—20 to 40 percent in Colorado ski towns like Crested Butte, according to one June 2021 report.

The market adjusts if it is correct to adjust, at least probably, according to the probably efficient market hypothesis. The question is whether it's correct for the market to adjust.

Is it a durable trend for computer-based work to be performed from the comfort of far-flung locales? Because this would probably change the demand for, and therefore the construction and presence of, housing all over the place. Crested Butte happens to be first on the list; just wait until they discover Ocracoke.

But housing can't just appear and disappear willy-nilly. It's heavy, for one thing. So yes, the solution to a durable increase in housing demand is to build more housing.

What about a transient increase in demand? Suppose a bunch of people want housing but won't in five years. Suppose we know this, just for the sake of a simpler analysis (cf. for the sake of argument). What then?

The most common suggestion I've heard, in the second scenario, says you probably want some way to ensure that the people who are likely to stick around don't all get driven out. This is where you start to look at policies like rent control and property tax abatements for long-term owners. This also includes affordable housing incentives of various kinds.

But these policies conflict with construction and therefore long-term planning in municipal policymaking. Over the long-term, concealing a durable increase in demand with stringent tenant protections creates a double standard and a new kind of inequality. This is one case where a political debate turns into a prognostication contest. Unfortunately, fortune-tellers have a poor track record regardless of political leanings.

Optimistically, we can plan for both eventualities at once, as long as we're clear about what we're doing. A major barrier to the compromise option is the tendency for political polarization to poison the well. Advocates of tenant protection raise spurious "positive-feedback" objections to upzoning, citing effects that disappear in well-controlled studies. Advocates of housing deregulation overestimate the impact of modernized affordability incentives, and underestimate or ignore the possibilities for innovation and general social benefits thereof.

I'm arguing for uncertainty. I generally support housing construction wherever it's fiscally sound. But we can't expect that construction to materialize where the market isn't convinced it's necessary, simply because it would meet our social objectives. And we can't ignore the future to meet social objectives right now.

The world is changing rapidly year by year. And if change is necessary to accommodate it, we’re better off realizing all the negative consequences sooner rather than later… especially if later means it has snowballed into something far larger and more painful (e.g. US mortgage subsidies).

Markets tend to just look bad, but I think they’re more realistic. While the government will pay someone for a job/pension to do something that was made obsolete in the 70’s, the free market appropriately makes him redundant. The former isn’t better. It’s a deadweight loss to society, even if it appears more humane.

The problem described in this article is not a shortage of housing for those who want 2nd homes in places like Crested Butte (although that may well be a problem of its own).

The problem being described is the infeasability of the people who work in these towns to be able to live there.

You can double or triple the number of mountain resort towns, and perhaps that would ease the "challenge" of being able to afford a 2nd home there. But by itself it will have almost no impact in the challenge faced by the people who work in these towns.

As the article noted, and as others have highlighted in comments, most mountain resort towns are intensely space-constrained, "just build more" is generally not an option for a given town. I doubt that "just build more mountain resort towns" is a solution either.

Famous last words; would love to see where Crested Butte is at in five years. The only business that will be left will be the ones supporting the rich second homers why wouldn't it just stay like that or even get worse?

Utah sucks, go to Colorado