Carlsbad Airbnb, Vrbo short-term rental market grows over last four years
The number of short term rental properties in Carlsbad tripled in just under four years even as the city, Eddy County and New Mexico grapple with a need for long-term and affordable housing.
In the third quarter of 2018, just 56 properties in Carlsbad were being offered for short term rental on Airbnb and Vrbo, according to data from AirDNA, a Denver company tracking short-term rental data globally. That number grew to 145 at the beginning of 2020, showing only a slight decline at the height of the COVID-19 pandemic.
Of the current 192 properties available now available in Carlsbad for short-term rentals, 80% - or 144 - consisted of entire homes, while just 36 listings were "private rooms." The data showed that most of the homes were three-bedroom properties which could house about 5 to six guests each.
Carlsbad tackles housing needs
A long-term planning document published by the City of Carlsbad in 2012 stated housing was the "number one critical issue in Carlsbad forestalling any expansion" as part of its infrastructure evaluation.
The report said the need for multi-family rentals at an affordable price was critical - a need which has only grown as the oil and gas industry begins to rebound in the region.
An April 2019 short term housing plan published by the City of Carlsbad identified several zones in the city which could be developed to help tackle the need for housing in the region which saw a 15% population growth as of the 2020 Census.
An October 2021 development update by Carlsbad Mayor Dale Janway listed the current and planned housing developments in the city.
Eight duplex units were planned on Kircher Street, nine residential lots on Peach lane, 14 apartments on Lea Street, 16 units on Fox Street and 51 single-family units in Martin Farms were in the planning or construction stages.
Forty single family residential units were planned for the Skyline Drive Commercial subdivision, already under construction. In development was Carlson Ranch Master Planned Community south of Carlsbad which was expected to developed 21.50 acres into 267 unit townhomes.
More: City of Carlsbad: Development includes housing options in Carlsbad
Eleven undeveloped lots in the Ridgecrest Subdivision were planned with 132 apartments at Arrowstone Apartments on Hidalgo Road under construction. On Chapman Road 120 apartments in the Carlsbad Apartments project are under construction, while 14 new single family homes planned for the Thurston C-Hill development project.
An additional 300 units were expected to be built as part of three separate development projects in south Carlsbad.
Rental market generates revenue
The average daily rate for short term rentals available online was $133; it includes nightly rate other fees associated with booking.
While renting housing to travelers and others generates lots of revenue for property owners - an average of $1,966 annually - studies have shown they reduce the supply of long-term rentals which cause an increase in rental and home prices.
Short term rentals have also led to increased revenue for the City of Carlsbad which had collected just over $650,000 in Lodger's Tax - a tax which is collected by property owners and managers from renters - by October 2021. In the 2019-2020 fiscal year, the City earned just over $2 million in Lodger's Tax. Lodger's Tax is applied to hotels and RV parks in the city.
In July 2020, the City amended its ordinance to allow Lodger's Tax revenue collected from stays longer than 30 days to be used for local infrastructure projects. The amendment aligned the ordinance with House Bill 117 - a bill sponsored by Carlsbad's New Mexico House Rep. Cathrynn Brown.
Short term rentals in Carlsbad see favorable ratings with 82% receiving a 4.5 overall rating from guests. Favorable ratings means locations are more likely to stay booked - though data shows 78% of bookings are only for a single night. Only 6% of bookings are for three nights or longer. Lodger's Tax collected for those stays continue to be designated only for use to promote tourism.
Most short term rentals are offered via Airbnb, just 8% of properties were listed on Vrbo, while some were listed on both platforms.
Short term rental market to grow
AirDNA's 2022 forecast for the market cited a 27.5% rise in demand for short term rentals nationally, but only a 2.6% growth in available new rentals across the market.
The company's forecast indicates that demand for rentals in small cities and rural areas far outpaces urban demand.
"The return of demand to small cities and destination/resort markets throughout the U.S. has led to significant gains in new supply in these areas," the report read.
The El Paso Times contributed to this reporting.
Jessica Onsurez can be reached at jonsurez@gannett.com, @JussGREAT on Twitter at by phone at 575-628-5531.
This article originally appeared on Carlsbad Current-Argus: Carlsbad Airbnb, Vrbo short-term rental market grows over last four years
