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Show Condominiumization Controversy Selling apartments as condominiums condo-miniums usually results in higher high-er rental rates, but it doesn't necessarily mean the condo's will be taken out of the Park City residential housing market. According to those in the Park City property management business, bu-siness, the trend in recent years has been away from nightly rental, in favor of monthly, or yearly. However, as pointed out by City Planner David Preece, the condominiumization of apartment apart-ment units may well result in higher rental rates, partly because be-cause of higher interest rates owners have to pay for mortgage mort-gage money. But is is not clear that condominiumization con-dominiumization means former apartments are being taken completely out of the residential housing market. In the case of the Snow Country condominiums, formerly former-ly low income housing built by the resort, condominiumization has not resulted in more units there being rented nightly. According to Bob Wells, city councilman and manager of Moana, the largest property management firm in Park City, about the same number (20) of Snow Country units remain in the nightly rental pool following condominiumizations last year. The balance of the fifty remaining re-maining units are being occupied occup-ied by their owners, or rented on a monthly basis. Wells cited similar results at other condominium complexes, all of which were originally built for nightly rental, but over the years have become residential. He estimated 75 percent of the Homestake condo's were residential, two-thirds of the Claimjumper, and noted that at the Treasure Mountain inn only 20 of 54 units there are now. being rented nightly. "Since 1974, there has been a decline in the number of condo's rented on a nightly basis," said Wells, who estimated that decline de-cline at five to ten percent per year. However, he pointed out, not all condo's taken out of the nightly market are becoming available for monthly use. "Some are pulled out because of the personal designs of the owners, rather than conversion to monthly rentals," he said, noting an increasing (60 percent) per-cent) number of the local condominiums con-dominiums are being bought by Wasatch Front residents. What that means, he said, was that the owner lives close enough to Park City to frequently fre-quently use the condo himself, rather than having to rent it as an investment. Another factor is economics. In the boom or bust economic climate of a ski resort, some owners find more money and security in renting monthly, rather than taking a chance on a bad winter dropping the bottom out of the nightly demand. That may change as more emphasis is put on attracting convention business, but Wells noted that traditionally owners of resort area condo's haven't made a killing on nightly rentals, ren-tals, most just making enough to cover the year-round mortgage. A similar trend is reported by Dale Nelson,- president of the Park City Lodge Owners Association Associ-ation and owner of rental homes and an apartment- building in the historic section of town.- Like condominiums. Nelson said the trend in homes is away from nightly rental. "Five years ago it was 100 percent nightly, now in the older section of town,- there are only five houses available for legal, nightly rental," he told the Record. In a two-year period. Nelson said he knew of 27 houses that had gone from nightly to monthly rental. "You can't afford to rent-them rent-them nightly unless you're rich," he said, adding: "Very few people who are buying places now are renting them ... a lot are just moving in.'' Nelson cited high interest please turn to pg. 7A lTlOre COndoS continued from pg.6A rales as a primary reason, noting not-ing it's tougn (o make the mortgage payments on an 11 percent loan, if a property can only be rented a maximum of 100 nights a year. What this all may mean is a good newsbad news situation for Park City renters, with more homes and condo's available for residential use, but substantially substan-tially higher rents being charged. char-ged. With skyrocketing real estate and double-digit interest rates, rents will undoubtedly go up. "Right now there is a most amazing disparity between rents and mortgages," said Nelson, Nel-son, who noted some landlords are experiencing a "negative cash flow." "For new owners, for a mini' mum of five years, your rents net lower than expenses, and for the first time in history you have money coming out of your pocket poc-ket to hold your investment." That may eliminate what's left of Park City's "low income" housing: "The people who are renting low cost housing are finding it lucrative to sell." But having said that, Nelson does not think the moratorium on condominiumization proposed by City PlanneT David Preece would be effective in keeping rents down: "I don't think the moratorium would do anything." any-thing." What he favors would be the city dropping the impact fees in the old town area: "That would encourage low cost housing in the historical section of town.'' He suggested that for not paying impact fees, the developer develo-per would have to guarantee the city to rent the units for a certain number of years. Looking to the future, Nelson said the individual businesses and not the city will be the ones forced to find a solution to lack of employee housing. "The businesses will either have to furnish cheap housing and continue to pay low wages, or they'll have to pay a lot more money." Meanwhile, City Planner David Preece, in the face of criticism of his suggested moratorium, mora-torium, (See related story), told the Record, "My recommendations recommenda-tions are valid." "The city can't restrict ownership, but it can establish a review procedure whereby approval ap-proval as apartments, doesn't necessarily mean approval will be granted for condominiumization," condominiumiza-tion," he said. In the meantime, Preece said, if the people who are being affected by higher rents and lack of housing don't become vocal, nothing may get done. "If they don't care, and don't want any action, then it won't be the case that 1 will continue to promote this," concluded the planner. |
