Study: 2nd homes are No. 1 economic factor
It’s official: Aspen can no longer be rightfully called a tourist town.
A study released Friday quantifies that second homes are now the biggest economic engine in Pitkin County – dwarfing tourism during ski seasons and summers.
The study by the Northwest Colorado Council of Governments showed that second homes accounted for 34 percent of all dollars coming into the county from outside sources in 2001.
The study estimated that $1.32 billion flowed into the county from outside sources. Construction on second homes accounted for $115.5 million, and spending by occupants of those second homes – on everything from home furnishings to fancy dinners – accounted for another $337.6 million.
An earlier study by the council of governments showed that 55 percent of all housing units in Pitkin County were second homes.
All told, second homes were
responsible for bringing $453.1 million into the county in 2001, or 34 percent, the study showed.
In comparison, winter tourism accounted for 22 percent of outside dollars flowing into Pitkin County. Destination skiers, those coming to Aspen and Snowmass Village and staying at least one night, accounted for $232.5 million while nonlocal day skiers pumped $42.7 million into the economy; other winter visitors brought $14.2 million.
Summer destination visitors and day-trippers accounted for 18 percent of $244.5 million, the study estimated.
Tourism was even topped by income that permanent county residents make from outside sources. That includes everything from dividends and interest, rent from property outside the county and retirees’ incomes. That accounted for a whopping $312.8 million, or 24 percent of outside dollars.
Skiing no longer king in region
The study was unveiled Friday by Linda Venturoni, director of special projects for the Northwest Colorado Council of Governments. She was a featured speaker at Healthy Mountain Community’s “State of the Roaring Fork Valley Symposium” in Glenwood Springs. The symposium was designed to identify trends evolving in the valley so governments can plan accordingly.
Venturoni said second homes are dominating more than just Pitkin County’s economy.
“Second homes are the largest economic driver in the region,” she said.
The study examined a four-county region: Eagle, Summit and Grand counties as well as Pitkin. Vail and Beaver Creek are in Eagle County. Breckenridge, Dillon, Silverthorne and Frisco are in Summit, and Winter Park and Fraser are in Grand.
For the region as a whole, an estimated $5.3 billion in outside dollars flowed in during 2001. Second-home construction and spending by occupants accounted for 34 percent of those dollars while winter tourism was at 28 percent.
That’s significant because those four counties compose the heart of Colorado ski country. They account for about 70 percent of the annual skier visits in the state. Nonetheless, skiing has slipped as an economic driver.
Since this is the first study of its kind, there’s no way to tell when second homes supplanted winter tourism in the economy. Pitkin County Commission Mick Ireland, another speaker at the symposium, said he guesses it was the mid- to late-1990s.
Vail’s life blood
While second homes are vital to Aspen’s economy, they are the life blood of Vail’s. Second-home construction and spending by occupants accounted for 38 percent of the outside dollars coming into Eagle County in 2001, the study showed.
Winter tourism was a distant second at 22 percent. Eagle County residents’ income from outside sources accounted for 21 percent of all outside dollars. Summer tourism brought in only 9 percent.
Winter tourism still reigns supreme in Summit and Grand counties. Summit County relied on winter tourism for 39 percent of outside dollars while second homes accounted for 32 percent.
Winter and summer tourism each accounted for 27 percent of the outside dollars flowing into Grand County while second homes brought in 24 percent, the study showed.
Venturoni and symposium speaker Jim Westkott, the state’s demographer, made a convincing case that second homes will have an even greater impact on the area in the next two decades.
National studies show that most second homes are bought or built for people between ages 55 and 64. Baby Boomers, the largest age group, are just moving into that bracket.
“We know that this trend that we’ve identified will be peaking in the next 18 years,” Venturoni said.
“You thought you had a lot of second homes built in the 1990s?” Westkott asked rhetorically.
Second homes produce problems
While second homes bring a lot of outside dollars into the region, they also bring a myriad of problems, Venturoni and Ireland warned.
Ireland said Pitkin County is experiencing a trend that, at first blush, appears to be a paradox – new jobs continue to be generated but retail sales are flat or even down. The reason, he said, is second homes tend to generate more service jobs than jobs that generate retail sales taxes, which fuel local government funding.
Second homes need landscapers, gardeners, chefs, caterers and maids. Growth in the number of workers requires growth in governmental services such as schools, streets, police forces and fire departments. Yet governments must meet those demands without greater sales tax revenues.
Ireland also credited wealthy second-home owners for shaping Aspen’s much-discussed high-end retail scene. Many people lament that Aspen has too few shops that cater to a broad spectrum of people, including working locals.
Ireland said stores cater to the wealthiest potential customers, not the greatest number of potential customers. That’s why art galleries and stores selling $500 purses have proliferated at the expense of stores with more modestly priced goods.
Venturoni said rampant development of second homes has stamped land use in the four-county region. “This driver is crowding out all other uses,” she said.
Schools, health services and other community organizations find themselves “squeezed for space,” she said.
The second-home market has also gobbled up worker housing for redevelopment or driven up the price of land so that worker housing cannot be built, Venturoni noted. That’s led to the downvalley migration of workers now so common in many of the resort areas.
At the same time second homes are placing such a squeeze for space within communities, it’s generating jobs that also cause local populations to grow – and bring their own set of problems, Venturoni noted (see related story).
Scott Condon’s e-mail address is firstname.lastname@example.org
Support Local Journalism
Support Local Journalism
Readers around Aspen and Snowmass Village make the Aspen Times’ work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.
Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.
Each donation will be used exclusively for the development and creation of increased news coverage.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User
Development in Basalt barely skipped a beat in 2020 despite the coronavirus. It’s expected to be busier next year.