LEAD — When Wade Linafelter purchased a Lead property that had a reputation for being a “party house,” there were a great deal of repairs that needed to be done. The remnants of raging parties were present in the graffiti-filled walls, and the aging house was like so many others in Lead that needed a new sewer system, updated plumbing and electrical systems, and more.
All of the costly repairs required a supplemental source of income, so Linafelter and his partner Katrina Hutchison decided to finance the house restoration by renting out the second bedroom to short term renters. That was in 2017, and since then the pair have been able to make significant progress toward preserving a house that was once in danger of being condemned.
“Wade only bought our home knowing we would rent out our spare bedrooms to help with the enormous renovations that were needed,” Hutchison wrote in a letter to the Lead Planning and Zoning Commission. “This home is our retirement plan. We could not afford to renovate this home, which was one step away from being demolished, if we did not have the supplemental income from the Airbnb. As a side note, we hire local contractors as much as possible, which in turn puts more money back into Lead. If we lost that income, we would have to look for a smaller, more affordable house, which we all know is hard to find in this area. We only bought a larger home knowing we could utilize Airbnb.”
Hutchison’s story is one that is echoed by multiple short-term rental owners, who consistently tell about saving Lead’s most dilapidated properties, and using income from short term rentals to pay for the restorations.
Amber Ziegler purchased Esther Lux’s old house, partially out of a desire to preserve the Golden Gal’s legacy in Lead. But when she bought the house there were a number of repairs that needed to happen.
“The reason it was great to purchase the house is because it was owned by such a neat lady,” Ziegler said. “The problem that I hear from commission meetings are concerns about losing community, not having people for schools, not having volunteers, not having affordable housing. But, you know, none of those folks we just referenced would have been a candidate to probably purchase Esther’s house because it needed so much repair.
“We’re excited to have that house and we are so excited to tell her story,” Ziegler continued, adding that she has worked hard to decorate the house according to Lux’s well-known characteristics, such as her love of music, her background with the Homestake mine, and her love for community. “Every little part that somebody would tell me about her, we have tried to keep that going. It was not our intention to cause problems in Lead. We come to your town and shop and spend money there and visit. I think that’s a really great thing. Otherwise, you would just have had a property sitting there that would have just continued to deteriorate.”
Daniel Ward purchased four units on the same property with the intention of renting one to a long-term tenant and using the other three as short-term rentals.
“The thing I really wanted to stress to the people of Lead was that there are a lot of homes that are not in the best care and they need a lot of repairs,” he said. “We had a problem that after the mine shut down some of these places were kind of falling into slums and they’ve been falling apart for the last 20 years. So, now it takes even more money to fix up these homes. If these homes collapsed, or if the state (condemns) a house and it has to be torn down, that’s it. There is not going to be another house there because the lots are too small to meet the current building code. Once these homes are gone, they will be gone forever and they’re never going to come back. People are worried about the current state of affairs, but I really want people to think about the future 20, 30, 60 years down the line. Housing may be slightly limited as far as rentals go, but 30 years from now those houses are still going to be there. The hope is that we can maintain and improve the housing we have now, so that 30 years down the line the people who own these Airbnbs are going to be moving on and retiring, so you’re going to see that housing coming back ten-fold.”
At about 550 square feet, the two of his four rental units don’t meet the needs of many families and residents who are searching for long-term living quarters in the city. But at that size, they are perfect for visitors who prefer to stay in a privately owned home when on vacation.
Ward authored a letter to the planning and zoning commission that was signed by 28 short-term rental owners. In the letter, Ward speaks out strongly against local regulations or caps for the business, and instead asks the city to let the short-term rental market regulate the practice.
“As a group we do not approve of the city implementing any type of licensing or registration of short-term rentals,” the letter states. “We feel this is an undue burden on our business that is disproportionate to other business owners within this town and could eventually be a way to restrict or outright ban our source of supplemental income in either the near or far future.”
Concerns about garbage, parking, noise or other undesirable practices from short term renters, Ward said, will be naturally addressed by the market. Currently, he said there are about 50 Airbnb “superhosts” in Lead, and that distinction requires a significant amount of work to maintain high ratings and good standing with customers. Additionally, he said those concerns about short-term renters are not unique.
“Parking, garbage, housing, noise, health and safety concerns, and questionable neighbors are concerns everyone constantly has,” he said. “However, these issues have not been caused by short-term rental homeowners and they will persist without short-term rentals. Homeowners who do not maintain high standards of cleanliness, safety, and appearance typically do not stay on the market for long. To date, a vast majority of vacation rentals located within Lead have maintained the highest ratings available on third-party applications.”
Ward has been vocal about his opposition against short-term rental regulations or caps, because he is concerned that the practice could lead to an outright ban of the practice. With hundreds of thousands of dollars caught up in his effort to try and restore the units he owns, he wants to protect his investment and his retirement nest-egg.
“There are serious concerns based on unofficial conversations that we’ve heard about off-hand remarks from commissioners and other people in the city,” Ward said. “Some people want a total ban on short term rentals. Some people are threatening my retirement fund and my loan. Everyone who owns a short-term rental that I have talked with in the city of Lead are on board with having a well-kept place, with good people inside them. They also want to cooperate with the people in Lead.”
Additionally, Ward said claims that short-term rentals are contributing to the housing shortage in Lead are not entirely accurate. As a former service plumber in town, Ward said many of his customers were people who moved to Lead from out of state.
“That has been the real hurt on housing in this area,” he said. “Having Airbnb has exaggerated that, but it hasn’t been the sole cause.”
Sherri Meidinger, who has operated her short-term rental since 2016, said she feels like short-term rentals are being unfairly blamed for the housing shortage in Lead.
“I don’t like to see the blame put on us with the 50 homes,” she said. “The whole thing with workforce housing has been an issue for decades. Comprehensive planning has been looking at that for a long time.”
Meidinger also said claims about short term rentals causing problems have been unwarranted.
“We focus on hospitality and we are respectful to our neighbors,” she said. “There was talk about how we all need to be respectful to our neighbors. They also need to be respectful to the people who have bought the home and try to cause dissension or make up stories.”
As the city of Lead takes input and considers possible regulations and caps on short term rentals, owners are divided about whether to support the effort.
“Really, the greatest regulator that is going to make everybody happy is the market,” Ward said. “If you start poking around at this you’re going to create unintended consequences. I really hesitate to even approve of a committee because really you’re just opening up the door for somebody to poke their finger in the market when the market can really solve a lot of the issues that we have right now.”
Christine Gill, who owns a short-term rental unit in Caledonia Condominiums, as well as house for a long-term rental, said she worked with her long-term tenant on rental prices and she wants to work with the city to come up with a good solution for her short-term rental.
“We said, ‘we can’t afford to have $500 rent. But you can’t afford to have $1,300 or $1,400 rent. What can we find as a middle ground, so we both win? I understand their position on community. I understand the school situation. I understand all of the reasons that they think there is an ordinance that needs to be done. I am not in disagreement that something needs to happen. I think that compromise is the answer.”
EDITOR’S NOTE: This is the third in a series of stories about short-term housing rentals in the Northern Black Hills.
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