This Mammoth Real Estate Q&A appears in the Christmas Weekend 2023 issue of The Sheet.
The Wheel is turning and you can’t slow down,
You can’t let go and you can’t hold on,
You can’t go back and you can’t stand still,
If the thunder don’t get you then the lightning will.
The Wheel—Grateful Dead
Q: We’ve vacationed and stayed in Mammoth condos all over town, and for many years. We like trying new places and locations and sometimes we go back to our favorites, depending on the season. We’ve even contemplated buying a place. But now we hear the local government wants to crack down on the nightly rentals properties and it might affect our stays, and potentially ownership. Can you sort through the noise and tell us how the future might be different?
A: It might be the wrong time of year to put on your thinking cap, but here goes. There is a recent and ongoing public (Town) effort to increase regulation, and potentially restrict usage, in the Mammoth condominium short term rental (STR) market. The ultimate outcome is yet to be determined. All of this is a direct reaction (and somehow connected) to the increasing workforce housing crisis in town. How things will be different, including availability of units in specific local projects, will be debated in the coming months.
This current effort is being driven by certain Town Council members and the Town staff. It appears they want to make changes, and potentially dramatic changes, that could affect both the owners of these rental properties and the guests and visitors who stay in them. It is almost guaranteed these proposed changes will cost everybody more money, maybe lots more money, both to operate and to occupy (including the potential for even more taxation of our guests).
All of this started rather abruptly in the past couple of months when the Town Council enacted an emergency ordinance and moratorium restricting any further nightly rental permits for condos in the RMF-2 zone. This includes most for the older condo projects in town including those at the base of Canyon Lodge, many around the Village periphery, all of the projects downtown aligned with Old Mammoth Rd. and Meridian Blvd., and more. And again, the “emergency” is the workforce housing crisis in the region which has accelerated in the post Covid lockdown period.
“Workforce”, and historically referred to as “affordable” housing, has a long history in Mammoth. The Town has actually built substantial workforce/affordable housing in town in the past 30 years. And today, look in the center of town and it continues to build major, multi-story housing projects. But the last few years have created even greater demand in many mountain resort communities, including Mammoth. Nationally, the demand for travel, leisure, hospitality and restaurant jobs increased substantially during this period (although the employment industry states that this demand is dissipating). And of course, housing is a nationwide issue in many communities both large and small.
The immediate “solution” and reaction by the Town was to concoct this moratorium prohibiting new STR licenses in these specific neighborhoods. This has been alarming to property owners and industry participants and has become divisive, and questionable, in many parts of the community. The “process” has created a task force known as the STR Committee to review the current STR regulations but to also explore how these older condos can somehow help to alleviate the housing crisis. How it will happen is somewhat unclear. Or downright confusing. But here we are.
Many suspect that the current Town fathers (and mothers) appear to have some scheme to force, or incentivize, the conversion of older condos (in the current RMF-2 zone) into workforce housing. Just last week the STR Committee consultant and the Town Planning department members made subtle arguments for essentially establishing a “15 Minute City” within the town limits. This trendy planning concept is all the rage with this cohort. But the natural boundaries for it already exist with Main St. and Old Mammoth as two sides and Meridian Blvd. and Joaquin Rd. the other sides. It is so compact and convenient it could almost be a “5 Minute City”.
This new 15 Minute City planning area encompasses a broad variety of older condo projects, apartments, Town and Mountain housing, and more. It is centrally located to the critical town services and amenities. But many of these older condo projects within the boundary also represent some of the most popular and longstanding (and affordable) locations for STR properties. Many of these properties also represent the critical “entry level” accommodations in town.
Ultimately, in the age of government overreach, it was only a matter of time before the Town of Mammoth Lakes came to the conclusion they needed to have more control over the local STR business. They are currently exerting their control over the individual property (condo) owners, but the paying guests are also in their sights. The guests who have been coming to Mammoth have apparently had too much fun, haven’t adequately obeyed the rules, and possibly haven’t spent enough money (or paid enough tax). But how all of this is going to play-out hasn’t been finalized, yet.
One faction in town is suggesting we create a whole new level of taxation on the STR properties to help subsidize further workforce housing opportunities. Some are talking about taxation of 20-30% of each stay. No one knows who is actually going to pay for it, the owner, the guest, or both? Their reasoning is that the guests “want to be served coffee in the morning”, right? Personally, I don’t think this will happen. But who know… It would be a great way to kill business for everybody, including the Town revenues. The jobs they’re trying to create housing for could simply disappear. It has happened before.
The current lead players in this public process are dead-set on having more regulation over the STR properties in Mammoth. This will certainly create more expense and hassle for the individual owners. And the Town has become near pathological about micro managing every property in town that accommodates any sort of guests (including non-paying guests). They revel in catching and fining any owners violating any sort of related ordinances. And “suspensions” are being proposed for violators including the cancellation of future rental bookings. And they appear giddy to catch any “guest” that isn’t a direct owner, because after all, they need to be paying taxes while they are here in Mammoth. Everyone must be taxed one way or another while visiting here.
And based on recent presentations, the Town also appears to believe they know best about where the guests should be staying, and not the guests themselves. They appear to think the guests should be staying in more expensive accommodations, and certainly not near the condo projects where local residents typically live. It is just more 2023 weirdness. They think the guests need to stay at the “portals” to the Ski Area and nowhere else, like downtown where you can easily walk to Roberto’s or VONS. Essentially, they think they can start spot zoning Mammoth to create more housing opportunities for local residents. We’ll see how this works out.
If I was to put my conspiracy theorist hat on again, I would almost think this is a plot backed by Alterra and Aspen to not only resolve much of the housing problem, but also boost the value of the STR properties they own and manage.
All of this will inevitably make it more expensive for the guests coming to Mammoth. And God forbid any guest stays in a non “certified” property in the future. Who knows what the Town will have in store for punishment? Your IKON Pass could be invalidated? Or maybe your Rivian won’t start? This new reach for greater control over STRs is probably just the beginning—they will want control over the Ring doorbell, the keypad entry, the thermostat, and on and on. Big brother is coming to your Mammoth vacation quickly. Your “Visitor credit score” could restrain you on a future powder morning. You better behave.
The irony to all of this is “The Wheel” that the Town has now created. Bed tax (TOT) and other tourist taxes (TBID) fund the Town’s operations. The numbers are substantial. And over the years, like any addict, they want more, and more. Spending millions and millions of dollars on marketing brings even more guests to town. And more guests brought even more revenues for their coffers. The tax revenue numbers for the past few years have become astronomical.
But the Town has spent all of that (go look at the new Ice Rink) and now needs more. And consequently more money to solve the housing shortage. They are addicted to massive marketing budgets and other expenditures, like the proposed new civic center (if this is an emergency shouldn’t that land and money go to housing?). Now they need to squeeze every dime out of the guests (and their STR hosts) to pay for it all. And of course, the Town needs more staff to implement the new plan (and housing for them too). Where does the law of diminishing returns kick-in?
Speaking of marketing, their mantras of the past and present are being laughingly altered to match the current environment. “Mammoth—Just For Fun” is now “Mammoth—Just For Taxes”. And “No Small Adventure” is now “No Small Change—Cuz We’ve Been Giving This Away Too Cheap”. And of course, the latest is “The Real Unreal” is “The Real UnReal Estate’.
The current public process is almost schizophrenic, and is on some self-imposed deadline (which is always a fool’s game). More regulation is bound to be coming to all of the local STRs. And the hunt for any clandestine or bootlegged rentals will be even more unyielding (you don’t want the wrath of that). The increased regulation, again, will come with more cost to the owners and guests. But the snazzy marketing pumped into your devices will still lure the masses to come. How or how much the Mammoth guests will be taxed, either directly or indirectly, to pay for more local workforce housing is yet to be seen. The powers-that-be haven’t fully concocted the plan. Stay tuned. And enjoy your coffee service.
Merry Christmas, Happy New Year, or whatever you are celebrating!