Mountain towns have always been a place to which one can escape the noise, pollution and daily grind of the concrete jungle, and conversely have been magnets that attract folks with peace and quiet, clean air, relaxation and panoramic vistas.

This combination of escape and attraction is what makes mountain communities desirable places to live, either as a primary or secondary home. Long-term residents know this: unless they’re among those lucky enough to spend their entire lives in our communities, they’ve sought the escape, found the attraction, and made the move. But it’s not a move everyone can manage, and so the rise of the “treehouse,” the second home in the mountains to which to escape. 

Chief among roadblocks to full-time mountain residency is employment. Most people find their career in the city, and in many cases that same work for the same money isn’t available in smaller communities. Queue a pandemic, and with it a literal shift in how the world works.

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Suddenly there’s a new phenomenon in rural America, coined elsewhere as “in-migration” – the escape of new residents and second homeowners from their urban domiciles to the attraction of the mountains. What began almost immediately after the pandemic declaration as a significant increase in second home occupancy has evolved into the full-on migration of second homeowners and wholly new residents to resort towns. The Insights Collective is working to understand the up- and downside consequences of these changes.

Changes in Rental Inventory

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• The upside: Tired or declining inventory is getting a facelift, raising the overall standard of inventory in the town and putting renovation dollars into the pockets of local suppliers and contractors. That increase in quality also increases the potential rental revenue or resale value of the unit at a future date, essentially “banking” revenue for the community.

At the same time, mountain towns across the West are reporting an aggregate increase of 4.8 percent in taxable retail sales during the past 10 months, despite lower occupancy and shut-downs. While not likely entirely attributable to new residents, there is a strong correlation between the two.

• The downside: A majority of second homes in mountain communities are part of the traditional leisure rental pool, either through property management companies, online markets like Airbnb or both. Second homeowner use over the past year contributed to a 5.5 percent decline in available units in western mountain resorts this past winter versus 2018/19.

While it doesn’t sound consequential, that amounts to slightly more than 188,000 room nights. Each of which can potentially generate an average of $399 per night based on DestiMetrics’ data, for a potential loss of $75 million in revenue and the corresponding lodging taxes.

Workforce Housing

• The upside: Workforce housing is a long-standing issue that public and private sectors have been challenged to address holistically. New and increased urgency is a strong catalyst to compel both sectors to find solutions. Says Chris Romer, CEO of the Vail Valley Partnership, “Second homeowners and new residents bring significant benefits to our community. It is incumbent on the private and public sector to increase our housing stock dedicated to the local workforce.”

• The downside: New residents purchasing properties or units in mountain communities are further exacerbating pressure on available and affordable workforce housing, a significant pre-pandemic condition across the industry. This drives the workforce to the outer edges of the community or, worse yet, to other communities altogether, creating challenges servicing the needs of both the tourist- and resident-based local economies.

Real Estate Transactions

• The upside: Real estate inventory in mountain towns is consistently selling as quickly as it’s listed, often over both market value and asking price. This generates new-found home equity for non-selling residents, and sellers are able to capitalize financially on the high demand. The resulting significant increases in real estate transfer taxes can be a mitigating factor to town budgets, perhaps even partially funding workforce housing solutions.

• The downside: What was barely affordable housing in many communities is quickly moving out of the reach of all but the most affluent of buyers, adding to the aforementioned workforce housing issue. That’s potentially creating a localized valuation bubble and putting new homeowners and the long-term financial health of the community at risk, if so.

Changing the Business Curve

• The upside: Communities have long sought a leveling of the peaks and valleys of weekend/midweek visitation, and the pandemic (to a degree through in-migration) has partially accomplished that.

Says Dave Belin, director of consulting services at RRC Associates and an Insights Collective member, “New residents were taking advantage of flexible work schedules to ski and recreate midweek. This incremental demand is anticipated to continue this summer on trails and in outdoor dining.” These patterns of leveled visitation are also reflected in the Inntopia / DestiMetrics occupancy data.

• The downside: While there is potential for midweek overcrowding resulting in a loss of ‘down days’ in the community, it’s frankly difficult to identify a downside to a smoother, more consistent business cycle.

Today we’ve only scratched the surface of in-migration. Issues such as physical infrastructure, parking, broadband capacity, political orientation, schooling and public health and safety are just some of the many not addressed that the Insights Collective sees as manifesting across the industry in the months to come. As destination resort populations evolve, leaders and constituents have an opportunity to embrace and exploit the upside, mitigate the downside and meet the pre-existing and new challenges head-on.