Mammoth Real Estate Sales Report – October 15, 2023

Town Declares An Urgency Ordinance And Moratorium On New STR Permit!

Market Summary –  September 24 to October 15

Single-Family Home Inventory

Pending Transactions

Market Updates and News

October 2023 will prove to be classic fall weather in the eastern high Sierra with mostly sunny skies, warmer temperatures, and a slow turn of fall colors. A variety of regional prescribed burns have created some smokey conditions but winds have mostly blown the smoke out of the region. These controlled burns should continue in the weeks to come and even after a little snowfall happens. The pleasant weather is certainly welcome, especially for those still trying to complete repair projects from the past winter. Tourism remains on the slow side but is not dead. And again, this is a great time to be here. 

Late last Thursday the Town Of Mammoth Lakes announced an Urgency Ordinance to be placed on the upcoming Town Council meeting agenda on Wednesday Oct. 18. The Urgency Ordinance is drafted to be passed (requiring a four-fifths vote) and will place a minimum 45-day moratorium on new TOT/STR Certificates. The moratorium can be extended up to almost two years and does not include properties in Resort zones and in the North Village Specific Plan.

After reading through the staff report and draft Ordinance, what jumps out at me is the Town declares it can take “measures to limit or otherwise regulate the number, location, and/or other aspects of short-term rental properties in Mammoth Lakes.”  The moratorium is designed to allow the Town time to further investigate the current STR regulations, all in light of Mammoth’s severe workforce housing shortage. The staff report implies that the specific 2015 Quality of Life Ordinance regulating STRs needs to be updated and create additional regulations including annual review of STR properties to certify compliance.

One recommendation in the staff report is that property owners need to increase “Word of Mouth Conformity” within condo projects; “In making the owners more aware and accountable of the requirements to rent transiently, compliance should improve as owners who are held accountable will self-enforce other owners in their complex.” Now that’s a great policy—turning owners within HOAs into snitches and policeman always works out well.

The staff report also implies that owners, rental agencies and property managers are grossly out of compliance with the Quality of Life regulations. I live the Mammoth STR market rather first hand; I list, sell, walk-through these properties on a daily basis and directly observe the volume of companies and service providers who do the work. The level of competency is very high especially in light of how stressed the market can be and the overall employment situation. I look forward to seeing what the Town’s research during the moratorium uncovers. I hope they find something tangible.  

But the nexus between greater STR regulations and solving the workforce housing problem still evades me. But the Urgency Ordinance states that it is fact. I think the Town has a ulterior motive here. They tried in the recent past, through the Chamber of Commerce, to convince some of the older, legacy owners of local condos who were currently operating STRs to convert their properties to long-term rentals. It failed. So now they have the opportunity to create a mechanism where some of these older properties won’t meet the new “requirements” of the revised Quality of Life Ordinance. These older condos could have all sorts of vulnerabilities to more scrutinizing STR regulations (maybe they will find Formica counter tops are a health and safety concern). The local Realtors fought this war back in 2015. 

It is true that outside of their own owner usage, many of these units could actually cash flow better as long-term rentals rather than STRs. Maybe the Town is seeing the opportunity to strong-arm these owners into the long-term rental market. We’ll see. Based on this recent action, I’m assuming they have the four Council votes (sounds like a potential Brown Act violation). The timing of this is also curious because Mammoth has a lame duck Town Manager and currently no Planning Director. And my recent discussions about zoning becomes even more interesting in light of this proposed ordinance. I had already planned to discuss the current state of the STR market, so there is additional discussion below in my Other section.

The summer quarterly TOT numbers are currently being reported and the results will be of great interest to many. Entities from local businesses to the Town may have to plan accordingly. 

Governor Newsome just signed a bill that allows the “fast-tracking” of “affordable” housing on land owned by religious institutions. And this includes their parking lots. (Maybe Mono County should find religion?) The brand new law allows for bypassing most local permitting and environmental review. I see a fiasco in the making. 

The Cowboy State Daily recently reported that the town of Jackson and Teton County purchased eight new electric transit buses, and none of them are working. The manufacturer, the California-based company Proterra, has filed for bankruptcy and necessary parts aren’t available. The best quote of the article is from the Transit Director about the performance of the vehicles, “There is a difference in performance between cold weather and warm weather.” Brilliant. The good news(?) is that the buses were paid for by the federal government under the 2021 Infrastructure Law.

And finally, the Ski Area gave a presentation to the local Realtors during the period and the biggest take-away is that Alterra remains committed to making $40-45M in capital expenditures to Mammoth Mountain every year in the future. (They have so far every year of their ownership.) This is so profound and unlike any of the previous owners. Woolly’s Park will continue to become the winter and summer recreation spot. The new coaster is just about completed and construction of the two-story Lodge has started. The Main Lodge ropes courses will be moved down to this area and the snowmobile tour center too. All of this is a set-up for the eventual scrapping of the entire Main Lodge area. More and more services and mobility will be focused on the east side of the Ski Area. 

Chair 1 will be closed in April of this season to begin its replacement. The ski trail signage will all be replaced to match the new signage in town. And of course, more and more snowmaking capability to insure early season operations. In the 3-year horizon there will be more changes at Canyon Lodge including an addition to the gondola side of the building. And yes, they even plan to replace Chair 1 at June Mountain. 

The Limelight construction will shut down for the winter once the snowfall begins. The two levels of parking garage are substantially in place. This is going to be an impressive structure. 

Noteworthy Sales 

Other Real Estate News 

Before the announcement of the Town’s proposed moratorium on STRs, I intended to cover the latest from the STR/Airbnb/VRBO world. Now these items are even more appropriate.

While I was gone the past two weekends, The Sheet covered the June Lake’s community balance between tourism, workforce housing and government revenue and services expenses. The next County Supervisor’s race for this district will feature two new candidates with rather opposing viewpoints on the matters. The quote down below about the “county’s failure to adequately address the workforce housing shortage” and others are perfectly appropriate. 

Meanwhile, additional moratoriums on Airbnb and STR activities in New York City are creating more chaotic behavior (they actually want STR properties to be registered with the City!). But there are increasing reports that the latest moratorium is creating a huge black market for STRs facilitated by various social media sites. It is bound to happen—the law of unintended consequences is for real. Here in Mammoth, a black market for single-family STRs has always existed. Savvy owners have learned how to skirt the annoyed neighbors, and the Town. A similar black market of sorts is evolving in the local condo market and social media private groups and other resources are part of it. People can be so connected today. 

Ironically, many of these local black market owners are simply frustrated with the Town’s lack of respect, cooperation and support, and detest generating tax dollars for the Town’s wasteful management policies. The Town’s further restrictions and efforts will likely create even larger off-market enterprising. The Town has grossly underestimated the intelligence, character and creativity of the second homeowners wishing to generate revenue from their resort properties. All of this will drive alternative STR (and MTR) strategies. We’re back to the 70s and 80s of advertising your Mammoth STR in the back of firemen trade magazines.

An August 17 article in the Colorado Sun highlights a new lawsuit against Summit County, Colorado over STR regulations. The lawsuit claims the County Commissioner’s “justifications for its excessive STR regulations, including that STRs deprive the County of local workforce housing, are fabricated and seek to involuntarily enlist private homeowners to solve the county’s failure to adequately address the workforce housing shortage.” ( Again, pretty much summarizes the scenario with Mono County.)

From the article, “Who says you have a right to live where you work?” said Todd Ruelle, a Virginia resident who has rented a home he bought in Summit County near Breckenridge since 1980 and is spearheading the lawsuit. “You live where you can afford to live. I wish I could live in a penthouse in New York City. Does that mean I’m entitled to a penthouse because I work there?”

I also receive a regular newsletter (nothing like mine) from a RE/MAX agent in Breckenridge. A recent issue was calling for “Please Donate Today To Save Our Property Rights”. The newsletter says the donations will help fund a lawsuit against the Town of Breckenridge for their restrictions on STR. A positive outcome of such litigation would help “set a precedence for the County as well as other Mountain Towns in Colorado (and maybe Mammoth?).

“These restrictions have not only cost many locals their incomes but many small businesses are suffering and the tourism industry will be impacted in the long run which affects all of our livelihoods which could have devastating consequences on the vibrancy of our beloved town. Living in a small town like ours survives purely on tourism. Even if you do not live here full time but own property here or want to buy property here your Real Estate Investment will be impacted by these restrictions if we allow it to continue.”  
 

The lawsuit “represents property owners without local voting status.” (The old taxation without representation.) They have raised $250,000 already and are trying to raise another $150,000 according to the newsletter.

Mr. Ruelle of the Breckenridge group was also quoted in the Sun article, “They don’t use data,” he said, describing a meeting where a county commissioner said the 35-night cap “feels good.” “They pull these numbers out of their back-end and try to sell the public that it’s the truth.” 

Ruelle bought his home near Peak 7 in 1980 for $80,000. He was 23 and making $18,000 a year. He paid 17% interest on the loan and started renting to visitors through a management company in 1990 to help pay down his mortgage. 

“If you work in a resort community you try to figure out how to buy a home through hard work, creativity and entrepreneurship so you can get yourself a place to live,” Ruelle said. “We want to make Summit County ground zero for this fight and make it a focal point for the nation. Many of these resorts started when there was no place to stay except people’s homes and owners rented to visiting skiers. We helped start these economies and we continue to drive local economies.” 

The “Digital Government” platform Granicus has an article on “Short Term Rental Bans Gone Wrong.” Part of the conclusion;“Rather than turning first to a full out bans, local governments should consider if it may make more sense to put in place compromise regulatory frameworks that allow short-term rentals that meet certain requirements while protecting the interests of the broader community. By doing so, communities can can harvest the benefits of this new industry and avoid exposing themselves to expensive and time-consuming legal battles. Cities like Denver, Los Angeles, and Vancouver, British Columbia, are doing just that. While the specifics vary, the underlying idea is the same: Explicitly identify the unwanted behaviors and negative consequences of short-term rentals, and devise specific, practical policies to mitigate them.

With the advancements in big-data technology it is now possible to enforce such policies, and identify addresses of short-term rentals to bring them into compliance with local rules. Many innovative municipalities including Placer County, California; Durango, Colorado; Asheville, North Carolina; and Islamorada, Florida, already use such tools and have seen double-digit improvements in compliance and revenue. This allows these cities and counties to double down on enforcement to further ensure that short-term rental operators stay within the designated zones, pay their fair share of taxes, and are accountable and respectful of neighbors.”

The Town of Mammoth Lakes, by virtue of decades-old zoning regulations and the Quality of Life Ordinance of 2015 have had all of this in place for years. The question today is; Have these regulations failed or are these new moratorium and regulations all about strong-arming the owners of marginal STR properties into the long-term rental pool to theoretically improve the workforce housing supply? We’re going to find out.

And looking forward, the end-of-the year holiday rental period appears to be far from booked-out. Many properties appear to be at above the peak pricing of the past two years and not booking, yet. Other reservation companies are already promoting discounts. Some would-be renters are taking a wait-and-see attitude to see if rental rates drop. And of course, to see what the snow conditions will be like.

The Mammoth STR market will be worth watching in the coming months and maybe years. That darn law of unintended consequences always makes for good entertainment.

Thanks for reading!