HomeMy WebLinkAbout10-14-23 Public Comment - A. Sweeney - Attn_ Community Development Board, Headwaters Economics ReportFrom:Alison Sweeney
To:Agenda
Subject:[EXTERNAL]Attn: Community Development Board, Headwaters Economics Report
Date:Saturday, October 14, 2023 6:43:05 PM
Attachments:Amenity Trap.pdf
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Headwaters Economics, a local nonprofit dealing with land use, released a report in
May 2023 addressing our exact situation in Bozeman! I've attached the report,
please read it.
Pay special attention to the section under housing supply on page 12 that begins:
"Communities can implement policies to use their existing buildable land more efficiently
while retaining the small-town character and aesthetic of places."
Bold emphasis is mine.
Bozeman seems to be incentivising tons of high rise apartments that aren't going to solve
our housing crisis, but they WILL destroy our character.
The new UDC needs some revisions. Please don't vote to adopt this version of it. This is a
great chance to prevent a lot of terrible development going forward. We can't keep doing
what we've been doing.
Please slow down the process and listen to residents.
Listen to Headwaters Economics if you won't listen to us.
Alison B. SweeneyBernadette's Handmade JewelryBozeman MT406-404-5740alison-bernadettes.com
Amenity Trap
How high-amenity communities can avoid being
loved to death
https://headwaterseconomics.org | May 2023
Published Online:
https://headwaterseconomics.org/outdoor-recreation/amenity-trap
About Headwaters Economics
Headwaters Economics is an independent, nonprofit research group whose mission is to improve community
development and land management decisions. https://headwaterseconomics.org/
Authors
Megan Lawson, PhD | 406.570.7475 | megan@headwaterseconomics.org
Kris Smith, PhD | 802.989.5385 | kris@headwaterseconomics.org
Acknowledgments
We would like to thank Michael Tolan and Aidan Reed for their valuable contributions to this report.
P.O. Box 7059 | Bozeman, MT 59771
https://headwaterseconomics.org
Amenity Trap
How high-amenity communities can avoid being
loved to death
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 3
TABLE OF CONTENTS
1. Executive summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
What is an amenity? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Places people like to visit will grow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Amenity-driven growth can stress communities and natural resources. . . . . . . . . . . . . 6
Communities have a choice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Solutions exist. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3. Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Demand for housing by wealthy homebuyers raises prices for all. . . . . . . . . . . . . . . .10
Housing supply is limited by available buildable land . . . . . . . . . . . . . . . . . . . . . .12
Housing supply is limited by labor force . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Housing supply is limited by competition with vacation properties. . . . . . . . . . . . . . .14
Housing supply is limited by local opposition to density . . . . . . . . . . . . . . . . . . . . 15
4. Infrastructure and public services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Amenity communities face unique considerations. . . . . . . . . . . . . . . . . . . . . . . .16
Planning infrastructure is challenging when costs and demand are uncertain . . . . . . . . . 17
Infrastructure needs are driven by visitors but costs are borne by residents . . . . . . . . . .19
Infrastructure and service needs are regional but decisions are local . . . . . . . . . . . . . .20
Unaddressed infrastructure and service shortfalls can
deepen tensions between locals and visitors . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5. Fiscal policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Amenity communities face unique considerations . . . . . . . . . . . . . . . . . . . . . . .23
Revenue can be volatile and not keep pace with changes, creating long-term challenges . . .24
Fiscal policies can exacerbate inequality . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
6. Natural Disasters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Solutions to reduce disruption from disasters . . . . . . . . . . . . . . . . . . . . . . . . . .30
7. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
8. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 4 1. Executive Summary1. EXECUTIVE SUMMARY
More than ever, people are visiting and moving to places with inspiring natural amenities:
forests, lakes, beaches, trails, and wildlife. The influx of tourists and new residents into these
cities and small towns brings economic opportunities and can create a positive feedback loop
whereby new businesses and services make a place even more attractive. It can also come with
serious drawbacks.
More people and new development can put pressures on existing infrastructure and contribute to
growing inequality, including dramatic increases in housing costs that force long-time residents out
or into the crisis of homelessness. Fiscal health, public discourse, and community well-being can
be overcome with challenges.
The paradox of a place with natural attractions that make it a great place to live but also threaten it
with being “loved to death” is what is known as the amenity trap.
The amenity trap is confounding more communities across the United States than ever before.
This report offers a detailed examination of the problem by highlighting the challenges of housing,
infrastructure, fiscal policy, and natural disasters. It also explores proven solutions from amenity
communities across the country that leaders can adopt as they try to circumvent the problems
caused by rapid growth in population and tourism.
Solutions for amenity communities
This report separates the amenity trap problem confronted by these communities into several
categories. Each category suggests approaches and potential solutions for local leaders, advocates,
and state and federal officials wrestling with these problems.
Housing
Amenity destinations often find housing stock and affordability issues particularly
challenging. Income disparity, limited buildable land, workforce limitations, and
contentious public debate can make the housing issue a top priority.
The most promising solutions are those that bring together economic development and
housing strategies. Many communities are pursuing both regulations and incentives that
can increase the supply of residential housing for those at all income levels by promoting
modular construction techniques, limiting vacation properties, and addressing local
opposition to density.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 5 1. Executive SummaryInfrastructure and public services
In amenity communities the roads and water systems, as well as the education, childcare,
public health, and emergency response systems can be stressed by an influx of visitors and
new residents. The costs to maintain and improve these systems often disproportionately
burden residents.
Many communities are investing in capacity, implementing community benefit
agreements, and using scenario planning to overcome the uncertainties that often lead
to cost overruns or under-investment in infrastructure. Financing mechanisms that share
costs with visitors can ease the burden on residents, and creative solutions have been
devised through spending tourism taxes, municipal budgeting, financing with bonds,
public-private partnerships, and more.
Fiscal policy
Raising funds to support programs that can mitigate amenity trap issues requires unique
considerations. Local governments can find their options limited in the face of relatively
small numbers of tax-paying residents, equity imbalances, economies heavily dependent
upon a single industry, and restrictive state or federal policies.
Communities and nonprofit organizations can advocate for state and federal policy that
gives local authorities more flexibility to tailor solutions unique to the amenity trap
challenge. Reinvesting tourism-related revenues into programs that offset the negative
impacts of tourism and promote economic diversification can improve these communities’
long-term fiscal health.
Natural disasters
As climate change increases the likelihood of disasters like wildfire, flooding, and
hurricanes, many communities will have to prepare themselves or risk compounding the
amenity trap far beyond the breaking point. For example, when disasters destroy homes,
the lost housing stock pushes rents up and affordability declines, exacerbating the housing
crunch that already exists in amenity communities.
Communities are working to diversify their economies and revenue streams to enable
disaster risk-reduction investments. Many communities are emphasizing resilience in
housing and infrastructure policies to ensure that residents, homes, and businesses can
resist and recover from disasters. This can include encouraging durable housing that can
survive disasters, innovations that can protect neighborhoods from flooding, and planning
that can improve the effectiveness of first responders.
Proactive solutions can make amenity communities successful
Amenity communities around the country are applying creative solutions to the challenges
they face in housing, infrastructure, fiscal policy, and disaster preparation. In many cases those
solutions are successful because they leverage the economic engine that natural amenities bring
to their community. In others, they work because a cross-section of the community is working
together to balance growth with revenues or regulations that can be used to maintain quality of life.
There may not be a magic formula, and each community will have to navigate its own solutions,
but the common themes of proactive action, regional support, and creative leadership can help
avoid the amenity trap and make destination communities more livable, successful, and places of
opportunity for everyone.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 6 2. Introduction2. INTRODUCTION
In recent decades, many communities with access to trails, open space, and outdoor recreation
have seen an influx of newcomers who bring economic growth and opportunity. Pandemic-related
migration has amplified the trend in many places. But this growth is a double-edged sword.
What is an amenity?
Communities that are rich in natural amenities—lakes and rivers, mountains, oceans, forests,
wildlife, and more have long attracted people who want to float, climb, fish, explore, paint, and
otherwise enjoy them. These places are fortunate to have built-in attractions that can make them
great places to visit and live, and that can support a thriving economy.1
Places people like to visit will grow
As the amenities become popular with recreationists, a feedback loop begins: more people
hear about a destination, they visit and tell their friends about it, and word spreads. To support
recreationists, businesses nearby, such as hotels, gear stores, and guiding services, open or expand.
These businesses make it easier and more appealing for even more visitors to come, and the
cycle continues.
Research shows that these amenities’ economic power extends well past tourism by helping to keep
current residents and attract new ones.2 Many new residents to amenity destinations first visited as
tourists.3 Many people moving to amenity destinations bring their business or entrepreneurial idea,4
their retirement nest-eggs,5 or their remote work.6 These new residents in turn support a host of
other businesses in a community and contribute to a robust, resilient economy.
As communities recognize the economic opportunity potential from outdoor recreation, many
are developing and marketing their natural amenities as part of a focused economic development
strategy to diversify economies. This is particularly true in rural communities and places
historically dependent on resource extraction like oil and gas, mining, and timber.
Amenity-driven growth can stress communities and
natural resources
While the feedback loop described here can bring the economic diversification and prosperity to
which many communities aspire, it can also bring unwanted changes and challenges. The natural
resources that first attracted people, like clean water and abundant wildlife, can become impaired.
Trails and waterways, and parking lots to access them, can become overcrowded. Housing
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 7 2. Introductionbecomes less affordable to more residents, leading to more residents living in substandard or
crowded housing and increased homelessness. Long-time residents often find themselves forced
to leave the community. Small, rural places are faced with the challenge of providing adequate
public services, like drinking water and wastewater treatment, to millions of visitors. And
the perennial question of how to pay for programs to mitigate these impacts looms over many
amenity communities.
Communities have a choice
Communities can feel overwhelmed when faced with rapid growth, but they do have a choice
as to how they respond. Communities can focus on issues over which they have agency—such
as housing policies and infrastructure spending. They can also engage with state and federal
policymakers to improve the choices available, change policies that affect their well-being, and
advocate for assistance. Community responses often fall into three broad categories: wait, plan,
or react.
When a community waits, it holds off on policymaking, often in hopes that problems will abate or
resolve themselves, or there emerges sufficient political will to change current policies. Meanwhile,
pressures continue unabated and the challenges compound over time.
Concerned about rapid growth, some communities take a more reactive path and enact policies to
try to stop growth. These reactive strategies might include limiting building permits, water taps,
or establishing strict growth boundaries or zoning restrictions. These approaches can have the
immediate effect of slowing down growth. They do have medium- and long-term consequences,
however, that can make a community less livable. The unintended consequences of reactive
approaches can include unattainably expensive housing, long commutes for workers, wider income
disparities, and a limited tax base.
It is when these problems begin to materialize that communities begin to feel trapped by the
negative consequences that the popularity of their natural amenities has caused. It is a phenomenon
known as the amenity trap.
Fortunately, communities that plan proactively can anticipate and direct growth rather than being
subject to the pressures of the market. Proactive strategies include investing in local capacity,
implementing a forward-looking housing program to address housing supply and demand, and
making sure that tax policies capture and invest revenue to ensure the costs of growth management
programs are funded appropriately and adequately.
In this report we focus on policy solutions to highlight ways amenity communities can proactively
plan to take charge of the growth pressure and maintain their character and quality of life.
Regardless of which path a community follows, there is always a chance to reset and adopt a
new approach.
Solutions exist
The purpose of this report is to provide elected leaders, local government and agency staff, and
advocates for conservation and recreation with policy tools and community examples so they
can anticipate the challenges unique to amenity-rich destinations and incorporate policies and
partnerships to mitigate the impacts of growth. The goal is to provide amenity communities with
strategies to ensure that they can capitalize on the economic opportunities of outdoor recreation to
build an inclusive, prosperous, and resilient community.
This report separates the amenity trap problem into several categories that often confront these
communities: housing, infrastructure and public services, fiscal policy, and natural disasters.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 8 2. IntroductionPROBLEM SOLUTION
HOUSING
Amenity communities are unable to
supply suffi cient housing for residents
at a range of income levels.
Creative approaches can increase
supply, such as regional coordination,
limiting vacation rentals, or promoting
modular construction.
INFRASTRUCTURE
Infrastructure in fast-growing
communities can’t keep up, and costs
contribute to unaff ordability.
Scenario planning and new data methods
can better forecast tourism impacts and
infrastructure needs.
FISCAL
Funding local budgets often over-
burdens tax-paying residents in
amenity communities.
Align revenues with local economic drivers,
such as tourism. State policy should give
local authorities maximum fl exibility.
NATURALDISASTERS
More frequent disasters are
putting housing stock at risk,
compounding the challenges faced by
amenity communities.
Incentivize durable housing and disaster
planning to prevent losses to housing,
infrastructure, and revenue.
Amenity-rich places
attract new residents, visitors, and business.
Best vacation Best vacation ever!ever!
I’m going to raise I’m going to raise my family here!my family here!
I love it I love it here!here!
I can’t believe I I can’t believe I found this place, found this place, it’s perfect!it’s perfect!
I’m going to open I’m going to open a business here.a business here.Perfect place Perfect place to to retireretire
Let’s move here Let’s move here before everyone before everyone else else finds it.finds it.
Traffic has Traffic has gotten so bad!gotten so bad!
When did all these When did all these people show up...?people show up...?
My neighborhood My neighborhood is is changing.changing.
Growth changes the community.
Every community has a choice.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 9 3. Housing3. HOUSING
Amenity destinations, like any community, need sufficient housing at all income levels for those
who live and work in the community. When adequate housing is scarce, living costs become more
expensive for everyone, making it difficult for residents to afford homeownership, businesses to
hire and keep employees, and renters to find any housing at all. While communities across the
United States faced unprecedented increases in housing prices during the pandemic,7 the limited
housing stock in amenity destinations has been stretched particularly thin for reasons we describe
in detail in this section.
Amenity communities have a unique set of geographic, economic, and cultural circumstances that
make housing a particularly complex challenge to address. Amenity communities—often rural or
remote—must deal with what feel like “big-city problems.” Amenity communities may need to
adapt urban strategies to their rural context.
Due to the complexity of housing questions, it helps to break the challenges into two types of
constraints: demand and supply. Demand constraints relate to the pressures created on housing
when housing demand skyrockets. Supply constraints include factors that limit a community’s
ability to provide enough housing for people who want to live there.
Each of these constraints is explored further in the following section. This section is not an
exhaustive catalog of affordable housing strategies and policies, but instead highlights some
approaches that can be used to address both housing demand and housing supply challenges that
are particularly acute in amenity communities:
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 10 3. HousingThe table below summarizes the unique challenges and specific strategies amenity destinations are
using to address housing affordability. The examples listed are described in more detail below.
CHALLENGE SOLUTIONS EXAMPLE
DEMAND CONSIDERATIONS
Rapidly rising home prices
due to rapid population
growth and cash buyers
• Anticipate housing pressures early
and develop a housing strategic plan
alongside an economic development
strategy
• Lafayette, Colorado, combined economic
development and housing strategic plan
SUPPLY CONSIDERATIONS
Limited buildable land • Preserve existing affordable
housing supply
• Change zoning to increase density
• Increase buildable land
• Engage in regional housing planning to
share resources across jurisdictions
• Cincinnati rental housing buy-back
• Durango, Colorado, accessory dwelling
unit policies and incentives
• Summit County Housing Authority
• Southern Nevada Public Lands
Management Act
• Boulder County Regional
Housing Partnership
Limited labor supply • Modular housing to use centralized
labor force
• Regional workforce development
• Local workforce housing
• Transportation planning
• Modular homes in western and
central Colorado
Housing for residents
and visitors
• Regulating short-term rentals via zoning,
share of housing stock, permitting, etc.
• Create incentives for long-term rentals
• Deed restrictions to promote
homeownership by local workers
• Tradable permits for STR permits
• Short-Term Fix in Winter Park, Colorado
• InDeed, deed restriction program in
Vail, Colorado
Small town resistance
to change
• Regional engagement
• Streamline development process to
reduce costs
• Summit County, Colorado,
Combined Housing Authority
Demand for housing by wealthy homebuyers raises prices for all
Demand-related challenges mean that a community’s popularity and desirability has grown
considerably, and oftentimes are symptoms of a successful economic development strategy. In
the case of an amenity destination, the community has capitalized on its assets, marketed itself
to visitors, and proven to be a place with a high quality of life. Desirable communities attract
new residents,8 but when the supply of housing is limited, the price of housing rises. Amenity
destinations also attract investors and second homeowners, further increasing prices. Oftentimes
new residents, second homeowners, and investors bring with them greater wealth and can pay
more for housing.9 The challenges are compounded when home buyers pay cash: when a buyer is
financing a house, lenders will only sell mortgages that are comparably priced to similar homes
that recently sold. Cash buyers, however, do not have this limitation, subsequently freeing the
purchase price from modest increases to exponential price increases.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 11 3. HousingAcross all types of communities, the entire real estate market is connected, from the most- to
the least-expensive, in what housing policy experts call a housing ladder or bridge. When the
highest-priced housing gets even more expensive—as happens rapidly in hot markets like amenity
destinations—some buyers will shift into the tier below. These buyers can out-bid people who
were stretching to purchase homes in this tier, and they will shift into the tier below. This process
will continue to the least expensive homes, and potential buyers of the least expensive homes will
postpone homeownership and continue renting.
Unhoused +EmergencyServices
AordableHousing
WorkforceHousing Market RateHousing
LuxuryHousingLOW INCOME M O D ERATE INCOME HIG
H I
NCOMELOW INCOME M O D ERATE INCOME HIG
H I
NCOMEThe challenges can become even more acute for renters, however. Renters will also be forced into
lower-quality housing as housing stock gets more expensive, with outcomes that can be devastating
for quality of life. Research has shown that renters are more likely to live in substandard or
overcrowded housing in competitive real estate markets.10 And those who struggled to afford the
least expensive rentals can become homeless when prices rise. A 2020 study found that a $100
increase in median rent was associated with a 9% increase in homelessness.11 This rental crunch
is a noticeable trend in amenity places where seasonal and lower-wage workers are vying for
rental housing.
The housing pressures in amenity destinations are created by high demand at the highest and
lowest ends of this housing ladder, constraining the housing market for owners and renters of all
incomes. The pandemic-era pressures on housing stretched the rungs on the housing ladder farther
apart, making it more difficult for people to improve their housing situation.
Solutions to address high housing demand
Rapidly increasing housing demand is a side effect of a booming, prosperous community. When
faced with rapid growth, some communities attempt to stop or slow down growth. They will
limit building permits, cap the number of water taps, or establish a growth boundary. While these
policies can stop the construction of new housing, they do not affect people’s desire to live in these
communities, or impact businesses’ need to hire and house employees. Growth control policies
often have the unintended consequence of driving up the cost of existing housing.12
While it is not possible to stop housing demand, communities can anticipate it. Historically
many communities have first considered their economic development strategy, and housing
needs second.13 The crises many booming communities face today point to the need to develop
an economic development and housing strategies simultaneously. Research suggests that states
can use growth management laws to require or incentivize municipalities to incorporate housing
with economic development plans.14 The U.S. Economic Development Administration (EDA)
and Department of Housing and Urban Development (HUD) are developing systems to help
communities integrate their economic and housing strategic plans.15 The City of Lafayette,
Colorado, is currently developing a combined economic development and housing strategic plan.16
The housing bridge.
Housing at all price ranges are
connected. Policies at any level will
impact the entire housing bridge.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 12 3. HousingHousing supply is limited by available buildable land
One particularly acute supply constraint faced by amenity communities is their limited amount
of buildable land due to the public lands, mountains, rivers, and canyons that make these places
desirable in the first place. For example, Teton County, Wyoming, home of Jackson Hole and Teton
National Park, is 97% public lands.
Solutions to a limited supply of buildable land
The solutions to a limited supply of buildable land are either:
1) optimize building on existing land, or
2) obtain new land.
Policies to optimize existing land for residential use
Communities can implement policies to use their existing buildable land more efficiently while
retaining the small-town character and aesthetic of places. This includes programs to preserve
affordable housing (including manufactured housing), increase housing density by allowing
single-family housing on smaller lots, multi-family housing including duplexes and townhomes
in more places, “accessory dwelling units” (ADUs) in backyards and above garages, and allowing
residential construction in more areas.
The most important aspect of optimizing a community’s use of land for housing is preserving its
existing supply of affordable housing. In Cincinnati, Ohio, city leaders were concerned about the
rapid increase in the share of the rental housing stock that was owned by institutional investors,
who often increase rents rapidly and can easily outbid first-time home buyers. To address this
concern, The Port of Greater Cincinnati Development Authority, a public agency, has begun
buying back these properties. They then rent the properties or work with tenants interested in
purchasing the homes.17 While Cincinnati is a large city, smaller amenity communities may be able
to adopt a similar model on a smaller scale.
The city of Durango, Colorado, used zoning changes and incentives for ADUs to increase density
while retaining the community’s character. In 2016, the city launched “ADU Amnesty” to legalize
spaces that had been built but not permitted and increase the community’s housing stock.18 While
the program legalized existing ADUs, it did not increase the supply of new ones. In 2022, the city
launched an incentive program that reimburses homeowners $8,000 to construct new ADUs.19 To
receive the rebate, the ADU must be rented to someone who works at least 32 hours per week in
the county. The program was accompanied by a zoning law change that expanded the locations
where ADUs are allowed and reduced the number of required parking spaces.20
While many amenity destinations have limited land, neighboring communities may have more
buildable land but fewer resources to fund construction of affordable housing. Coordinating
regionally on housing can help to pool resources across jurisdictions and develop a regional goal
for housing supply. The Boulder County Regional Housing Partnership, in Colorado, is a formal
partnership across 10 jurisdictions. Together they have developed a goal of 12% affordable housing
by 2035, shared staff resources between larger and smaller jurisdictions, and helped the region
collectively advocate for housing policies at the state level.21
Zoning and permitting processes have developed gradually over time in most communities,
eventually creating a cumbersome and time-consuming building process that adds substantially
to the costs of new housing. Some communities are streamlining this process by taking a
comprehensive look at the entire permitting and approval process to identify redundant, conflicting,
or unnecessary requirements. Washington has taken a state-level approach, bringing consulting
teams to support counties’ efforts to streamline construction permitting by evaluating processes,
application materials, and coordination across agencies.22
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 13 3. HousingPolicies to obtain new land for housing
Housing advocates have identified public lands, including city-, county-, state-, or federally owned
properties, as one opportunity to increase the local supply of buildable land. These properties
can include vacant land owned by entities such as school districts, vacant municipal buildings,
or increasing development density on publicly owned parcels with structures. Best practices for
these projects include prioritizing or requiring affordable housing projects and ensuring that these
parcels have access to services like infrastructure, transportation, and schools.23 California24 has
statewide legislation, and several counties or municipalities like King County, Washington,25 and
Raleigh, North Carolina,26 have policies that prioritize affordable housing when disposing of
public property.
Policies to sell federal lands for affordable housing are more controversial because these parcels
are often on the outskirts of communities. In Nevada, where BLM owns land near fast-growing
cities like Las Vegas and Reno, laws such as the Southern Nevada Public Lands Management Act
of 1998 enable BLM to sell land within a specific boundary around Las Vegas, make land available
to sell for affordable housing, and retain some revenue from these sales for local projects.27 The
Truckee Meadows Public Lands Management Act is an example of proposed federal legislation
that would adopt a similar model in the Reno area.28 At the national level, the proposed Helping
Open Underutilized Space to Ensure Shelter (HOUSES) Act of 2022 would have allowed local
governments to identify Department of the Interior parcels for housing, and require the agency
to sell the land (with some limits for protected or sensitive lands).29 At least 85% of the parcel
sold would be required to be used for housing without specific provisions that this housing meets
particular income requirements.
The details of these programs and proposals to allow the sale of federal public land are particularly
important for amenity destinations. First, when the public parcels are on the outskirts of a
community, building housing on them will cause developers and the community to incur steep
infrastructure costs and exacerbate sprawl. Second, the federal public lands adjacent to amenity
communities often are the very thing that drives the place’s economy. Communities that develop
these easy-to-access places for commercial or residential use may deteriorate their most valuable
asset. Communities that consider purchasing federal land need to evaluate impacts on the economy,
infrastructure costs, and whether the purchases realistically will improve housing affordability.
Housing supply is limited by labor force
The second house supply constraint faced by amenity communities is a relatively small local labor
supply to build and maintain housing. This can slow the pace of construction and pressure much
of the construction-related workforce to commute long distances to their jobs. In the expensive
ski town of Telluride, Colorado, for example, much of the labor force commutes three hours
from Montrose.30
Solutions to a limited local labor force
One approach to a limited local labor force is to reduce the number of people needed on-site to
construct new homes. Modular or panelized construction involves building the components of a
home in a centralized manufacturing facility where skilled tradespeople can build homes that ship
across a region and are assembled on-site. These prefabricated and modular homes are typically
not distinguishable from traditional stick-built houses and, importantly, must meet the same
building code as stick-built homes.
Off-site construction can be particularly appealing in areas where builders are focused on the
custom home market and housing for middle-income residents is not available. Faster construction
times also can mean lower financing costs. Due to economies of scale, this approach can save
buyers 10-20% compared to a house built on-site.31
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 14 3. HousingA 24-unit development called Pinion Park in Norwood, Colorado, near Telluride, is underway
using modular homes from Fading West, a modular home manufacturing facility in Buena Vista,
about four hours away.32 These homes are intended for county residents who work in the school
district and earn less than 120% of the county’s median income by household size. The county
donated land and state programs and donors have enabled the project to keep housing costs
between $225,000 and $426,400, while the median listing price of homes in the county exceeded
$2 million in 2022.33,34
Communities can also develop a more localized workforce and related housing. For example,
some communities incentivize offering short-term rentals to local workers (see section below).
Transportation planning—including the development of transit—can also help offset the impact of
a commuting workforce.
Housing supply is limited by competition with vacation properties
The third supply constraint is when a substantial portion of the housing stock is used for vacation
rentals or second homes and is unavailable for residents, whether owners or long-term renters. For
example, in Sedona, Arizona, 17% of the housing stock is short-term rentals (STR).35
Solutions to competition with vacation properties
Communities are pursuing both regulations and incentives to manage how much stock is used for
short-term rentals.
Regulations include zoning that restricts where short-term rentals can operate. In Bozeman,
Montana, for example, short-term rentals are differentiated between those that are owner-occupied
during the rental period, such as renting out a room or garage apartment, and those that are not
owner-occupied during the rental period but are otherwise the owner’s primary residence. The
latter are prohibited in less densely developed parts of the city. Short-term rentals that are not an
owner’s primary residence are not allowed in any residential areas.36 This approach allows current
residents to earn income from their properties and offset some of the rising costs of living in
amenity communities.
Other communities have regulated short-term rentals by capping the share of total housing that can
be short-term rentals. Durango, Colorado, anticipated the challenges associated with short-term
rentals. In 2007, when the city was updating its land-use code, it capped the short-term rentals at
2-3% of a neighborhood’s housing stock.37 Other communities like Chelan County, Washington,
have capped short-term rentals at 6% throughout the county, except for the most urban areas which
are capped at 9%.38
Incentive programs can create financial incentives for property owners to rent or sell to residents.
These programs recognize that property owners in resort communities can generally earn more
by renting short-term compared to long-term rentals. Programs in communities like Big Sky,
Montana,39 Winter Park40 and Summit County, Colorado, and Truckee, California,41 provide cash
payments to property owners when they lease to local workers. The payments vary depending on
the size of the property and lease duration and range from $5,000 for a six-month lease on a one-
bedroom unit to $22,000 for four-bedroom or larger units rented for at least 12 months. In Summit
County, Colorado, 70 units of short-term housing were converted to long-term leases for the
2021/2022 ski season, housing 153 residents.42 These programs can be funded with a combination
of local tax revenue, employer contributions, and philanthropic dollars.
These programs to convert short-term to long-term rentals are advantageous because they are a
quick way to house residents, especially a seasonal workforce, and they can be less costly than
constructing new affordable housing units.43 However, critics of the programs question whether
these payments, particularly if they are going to relatively wealthy second homeowners, are only
increasing inequality in amenity destinations. The Town of Breckenridge, Colorado, also learned
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 15 3. Housingof the need to place caps on the maximum rent property owners can charge, to ensure local
workers can afford them.44
Communities also employ financial incentives to encourage property owners to sell to local
residents by offering cash when the property owner places a deed restriction on the property. Deed
restrictions dictate how the property can be used; in this case, they dictate that the owner (and
renter, if the owner chooses to rent the property) work in the community. A homeowner places the
restriction on the property’s deed, and this restriction will follow the property in perpetuity much
like a conservation easement. The programs compensate homeowners for the difference in selling
price because restrictions limit the pool of possible buyers. McCall, Idaho; Breckenridge, Colorado;
Big Sky, Montana; and Vail, Colorado, all have some version of this program. Vail’s program,
called InDEED, aims to enroll 1,000 deed-restricted properties by 2027.45 InDEED pays owners
15-20% of the property’s fair market value.46
Housing supply is limited by local opposition to density
Finally, amenity destinations often are small towns with a unique aesthetic that may be difficult
to change. For example, denser, multi-family housing may look different than the existing
neighborhoods. Rapid changes in housing styles and housing density can be confronted with
local opposition, slowing the development process and the creation of new housing. For example,
in Whitefish, Montana, successful opposition to a new affordable housing development was led
by some of the town’s wealthiest residents who live near the site. These residents threatened to
withhold philanthropic support for other community causes if the project was built.47
Solutions to local opposition
Opposition from neighbors can cripple specific housing projects, but Americans increasingly
recognize that unaffordable housing is a significant problem. A 2021 survey by the Pew
Research Center found that 49% of Americans say that housing affordability is a problem in their
community, up 10 points since 2018.48 This points to an opportunity to build broader support
among residents for policies and projects that improve housing affordability.
When strategic housing plans are developed and implemented at a regional level with input from a
diverse set of constituents, individual projects are less likely to be derailed by vocal neighborhood
opposition.49 Regional housing authorities can play a role. For example, the Summit Combined
Housing Authority in Summit County, Colorado, coordinates housing programs across the county
and five towns including homebuyer education, financial support for homebuyers, and a hub for
those looking to purchase deed-restricted housing.50
Local Housing Solutions, a housing policy clearinghouse, has many resources to help local leaders
improve the affordability of housing, including an extensive set of resources to build public support
for affordable housing.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 16 4. Infrastructure & Public Service4. INFRASTRUCTURE AND PUBLIC SERVICES
Amenity communities face unique considerations
Infrastructure and public services are the critical but often overlooked inner workings of any
community. While these systems typically operate and exist without fanfare, they can become
lightning rods of debate when they fail to keep up with the rapid population growth that often
marks amenity destinations. Further, infrastructure costs are often paid for by residents, not
visitors, and can contribute to a range of cost-of-living issues in amenity destinations.
Flathead County, Montana – an amenity destination and the fastest growing micropolitan area in
the United States – provides a case at hand. Residents in Flathead County are grappling with the
tradeoffs of building a new septage treatment facility. As the region’s population has grown, land
for dumping sewage from individual septic systems has become increasingly scarce, leading to
concerns of illegal dumping. The proposed septage facility offers a regional solution, but residents
have voiced concerns about its perceived negative impacts, ranging from siting issues and traffic
to the price tag. The debate in Flathead County is indicative of the tough infrastructure decisions
facing many amenity destinations.
Infrastructure decisions are both shapers and outcomes of political, socioeconomic, and
environmental conditions. They can address or reinforce inequities, contribute to economic
diversification, or lock communities into undesired trajectories. Inadequate or unmaintained
infrastructure can lead to rippling problems within the community, eroding public health and
safety, community wellbeing, economic development, and land conservation.51 In some amenity
communities new infrastructure planning may fail to address issues faced by lower income, older,
or long-time residents. As such, infrastructure investments require strategic, coordinated, and long-
term planning within the community and the region.
This section outlines the challenges associated with infrastructure and public services in amenity
destinations while identifying strategies for proactive infrastructure planning and investments that
enable people to live well together. For this report, we define infrastructure as the fixed capital
assets that support critical community needs such as roads, water and wastewater systems, and
electric supply. Public services include education, childcare, public health, public safety, emergency
response, and other services that are funded by local governments and districts.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 17 4. Infrastructure & Public ServiceThe table below summarizes challenges and solutions related to infrastructure and public services
in amenity destinations.
CHALLENGE SOLUTIONS EXAMPLE
Planning infrastructure in places
with rapid growth or seasonal
population changes is complex,
highly uncertain, and requires more
coordination
• Use scenario planning and better
data about visitation
• Plan infrastructure holistically
with other community goals
• Moab’s focus on sustainable
tourism
Large number of visitors requires
more infrastructure and services
than necessary for residents, but
the cost is borne by residents
• Reinvest tourism taxes on
infrastructure
• Use priority-based municipal
budgeting
• Use innovative funding and
financing
• Longmont, Colorado, uses
priority-based budgeting
Infrastructure needs are regional,
but decisions are local
• Coordinate regionally
• Invest in creative partnerships
• Adirondack Community
Recreation Alliance (part of
Northern Forest Center)
• Yosemite Area Regional
Transportation System
• Watford City partnership for
affordable housing and daycare
Unaddressed infrastructure
challenges create tension between
locals and visitors
• Identify infrastructure solutions
that address multiple community
benefits
• Invest in infrastructure that
benefits locals
• Measure and track community
wellbeing, sense of place,
happiness
• Northeast Kingdom
• Moab, Utah
• Bar Harbor, Maine
Planning infrastructure is challenging when costs and demand are uncertain
Local governments typically use growth and population projections to predict demand and then
design infrastructure that will meet their long-term needs. However, in places experiencing
rapid growth and/or seasonal swings in visitors these projections can be quite inaccurate. The
uncertainties related to population projections make right-sizing infrastructure particularly
challenging. Infrastructure investments tend to be expensive and long term, creating tradeoffs that
stakeholders must weigh as their community grows and changes. Infrastructure that is under- or
overbuilt can expose residents to unnecessary tax burdens and maintenance costs, inefficiencies
within infrastructure systems, and even failures.
Unfortunately, the full costs of infrastructure and services are rarely accounted for in economic
impact studies of tourism and amenity development. Costs to public services and infrastructure
can be tricky to separate from routine costs, leading many communities to overestimate the
economic value of tourism and/or fail to create systems to capture costs from visitors.52
For instance, the American Prairie Reserve, a large-scale conservation effort managed by a
nonprofit in central Montana, has contributed nearly $39 million in economic development
to the region since 2002.53 However, this estimate does not account for the costs of gravel
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 18 4. Infrastructure & Public Serviceroad maintenance and emergency services that local
governments have had to absorb as a result of APR’s
activities. Cost-share or community benefit agreements
could help address these gaps, but few assessments and
tools are available to local governments to help them
understand the full range of costs from tourism.
Solutions to planning with uncertainty
Use scenario planning and novel datasets
For amenity destinations trying to make infrastructure
decisions despite uncertainty and varying population
projections, scenario planning is a critical tool.54 Scenario
planning helps decision makers and residents imagine
different futures and, consequently, different strategies
for infrastructure.
In addition to scenario planning, investing in novel
datasets can be useful. Amenity destinations need
frequently updated data on how many people are visiting,
when, and for how long to help them plan infrastructure
improvements and maintenance. Novel datasets, such
as cell phone data, can be useful for communities but
can also be expensive. Nonetheless, accurate visitation
data are critical for estimating the full costs and benefits
of tourism. These data can then be leveraged for grant
applications and/or can be used to justify the costs of
capital improvements. In many cases the data can be
used to proactively address inequity issues or the needs
of vulnerable populations that were overlooked in older
infrastructure and public service decisions.
Plan infrastructure holistically
Moab, Utah, is an example of a community that is tackling
infrastructure challenges by planning holistically and
long term. Water scarcity is a key concern for Moab
residents given the area’s desert ecosystem.55 The city’s
water supply must service its 5,300 year-round residents,
as well as a projected 2,500 new residents over the next 40
years and the 2 million visitors the region hosts annually.
Tourists who stay overnight in Moab account for 16% of
the city’s commercial water use.56
To accommodate peak tourist season, the city invested in additional water storage capacity,
including three tanks and several aquifers and wells, and is planning additional capacity
projects in anticipation of more growth. Given the uncertainties of growth and expected climate
impacts to its water supply, the city is rethinking its approach to water infrastructure. The city
is using sustainable tourism principles to develop new initiatives to decrease overall demand,
including incentivizing desert-compatible landscaping, water recycling, and other water
conservation measures.
Infrastructure can reinforce
inequities and limit future
opportunities
Paradoxically, public infrastructure can become
obsolete or overbuilt to the changing needs
of rural communities.i When this occurs, the
community can become locked into an undesired
economic trajectory.ii Amenity destinations that are
transitioning away from natural resource extraction
may have legacy infrastructure that needs to be
dismantled or transformed to meet new needs.
For example, Colstrip, Montana’s economic
dependence on coal has resulted in critical municipal
infrastructure like water towers and streets that,
due to their scale and operational costs, could limit
the community’s ability to diversify its economy
beyond manufacturing.iii The expense of maintaining
the older infrastructure simply overwhelms other
community priorities.
Other amenity destinations may have derelict
infrastructure or infrastructure that is widely
seen as problematic – such as roads that divided
neighborhoods – that exacerbate inequities.
Addressing these legacy infrastructures is
expensive and may take decades to realize. State
and federal funding, such as the U.S. Department
of Transportation’s Reconnecting Communities
program, can help offset costs. This work is key to
creating more inclusive, diverse, and successful
economies in amenity destinations.
i Smith KK & Haggerty JH. (2020). Exploitable ambiguities & the
unruliness of natural resource dependence: Public infrastructure in North
Dakota’s Bakken shale formation. Journal of Rural Studies, 80, 13-22.
ii Freudenburg WR. (1992). Addictive economies: extractive industries and
vulnerable localities in a changing world economy. Rural Sociology, 57(3),
305-332.
iii Roemer, KF & Haggerty JH. (2022). The energy transition as fiscal
rupture: Public services and resilience pathways in a coal company town.
Energy Research & Social Science, 91.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 19 4. Infrastructure & Public ServiceInfrastructure needs are driven by visitors, but costs are borne
by residents
Amenity destinations must build and maintain infrastructure and services for capacities that are far
higher than their year-round populations. There is often a mismatch between who benefits from the
infrastructure and services and who pays the costs—typically locals.
Further, infrastructure costs can be uneven year-to-year, compounding planning and budgeting
challenges. When a threshold in population or visitors is crossed, the new infrastructure that might
be needed can costs tens of millions of dollars. With few residents to foot the bill, funding and
financing these projects and services can create significant challenges. Moreover, most state and
federal funding sources available to local governments for infrastructure are for upfront costs with
little funding available for operations, maintenance, and services.
Local governments rely on a mix of funding and financing tools to plan, build, and maintain
infrastructure. Debt financing – including private loans, general obligation bonds, and revenue
bonds – are the most common strategy that local governments employ for capital improvements.57
Many of these funding and finance tools rely on property taxes and fees that are paid for by local
property owners. Fiscal tools such as local option sales taxes, room and board taxes, and short-
term rental taxes can be leveraged to capture revenue from visitors. Aligning tax and fee structures
to capture revenue equitably is a top challenge for local governments in amenity destinations.
Infrastructure funding and financing strategies can create or reinforce inequities when revenue
structures are misaligned. State policies can drive these misalignments. For example, many states
limit the ways that local governments can raise and spend revenue, including limiting total debt
amounts.58 These fiscal policies can constrain local government flexibility and create significant
challenges for meeting the infrastructure demands of a rapidly growing population.
The following communities exemplify the types of misalignments between infrastructure benefits
and costs that can occur in amenity destinations:
• Bozeman, Montana, hosts an estimated 1.4 million overnight visitors annually. However, state
fiscal policies prevent the city from having a local option sales tax. While the influx of tourists
has significant impacts on public infrastructure, including on the road, water, and wastewater
systems, the costs of maintenance and upgrades is footed by the residents – largely through
property taxes. In this case, tourists are not paying for their fair share of costs associated with
tourist impacts to public infrastructure. If Gallatin County (Bozeman’s parent county) was able
to implement a 3% sales tax on nonessential goods, it would raise an estimated $30 million in
revenue to help offset these costs while ensuring that infrastructure costs are spread between
visitors and residents.59
• Sturgis, South Dakota – a small town of 7,000 people – swells with more than 500,000
visitors during its famed summer motorcycle rally. To accommodate the influx, the Sturgis
Police Department hires 10-day officers, expanding its workforce to become the third-largest
department in South Dakota during the week of the rally. 60 The city budgets an extra $300,000
for police expense related to the rally – an expense that is offset by revenue from state and
local taxes, sponsorships, and permits and fees related to the rally.61,62 Meade County also has
increased costs to its sheriff office but does not benefit from sales tax revenue due to state
fiscal policies. Instead, it relies on vendor fees to offset its costs.
• West Yellowstone, Montana, is a gateway community for Yellowstone National Park. While
its year-round population is approximately 1,100 people, the community hosts over 4 million
visitors annually. The region’s tourism puts an enormous stress on the community’s services
and infrastructure, including roads and wastewater.63 The community’s medical and first
responder services are particularly stressed as most of the calls are related to tourism, but the
expenses are paid for from local budgets.64
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 20 4. Infrastructure & Public ServiceSolutions to misaligned revenue structures
Reinvest tourism taxes on infrastructure
Local governments should think creatively about how to justify spending tourism taxes and
impact fees on infrastructure investments benefit residents and visitors. In some cases, this may
require policy changes. For instance, Utah counties are required to spend 47% of their tourism tax
revenue on tourism promotion, even though many of tourism-impacted counties have significant
infrastructure needs.65 Other revenue strategies that amenity destinations can put in place are
impact fees and government surcharges. Some of these ideas are explored in this report’s Fiscal
Policy section.
Use priority-based municipal budgeting
Another way to ensure that infrastructure needs and community goals are being met is to
use priority-based budgeting, which shifts municipal budgeting from a line-item strategy to
budgeting by priorities. The method can illuminate how effective a local budget is at achieving
its goals. This strategy has successfully been used to identify funding infrastructure and climate
resilience projects in larger cities and is also being used by Longmont, Colorado, to find funding
for infrastructure.66,67
Use innovative funding and financing
Local and state governments are increasingly experimenting with new funding and financing
tools for infrastructure, including green and social impact bonds, public-public or public-private
partnerships, revolving loan funds, and state infrastructure banks. These tools provide needed
options for amenity destinations.68
This report’s Fiscal Policy section details other ways a community can creatively raise and
deploy funding.
Infrastructure and service needs are regional, but decisions
are local
Many of the infrastructure challenges facing amenity destinations, such as transportation,
are regional in nature.69 However, decisions about infrastructure tend to be made at the local
government level. This can create fragmented responses to infrastructure challenges that could
be better addressed with a regional strategy. Thus, infrastructure shortfalls can be indicative of
interconnected problems of governance as much as budgeting constraints.70
Traffic congestion and impacts to road infrastructure are a telling example. Poor road conditions
and traffic are common complaints in communities with significant population growth and tourism.
From an engineering and cost-efficiency perspective, road systems are usually not designed to
meet peak demands. For decades, urban governments have invested in active traffic management
and transportation demand management to diversify options and spread out peak traffic hours.
Many of these strategies, such as investments in public transit, bike paths, and pedestrian
infrastructure, have also been adopted in rural amenity destinations.
While roads are key for regional connectivity, their funding and governance are highly fragmented
and decentralized.71 State departments of transportation are responsible for state roadways, but at
the local level counties, cities, and townships build, fund, maintain, and/or de-commission roads.
For the smaller local governments, road construction and maintenance costs are typically the
largest expenditures in their budgets. State and federal sources for transportation funding can
be unpredictable, making it hard to plan and coordinate larger solutions. The fragmentation in
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 21 4. Infrastructure & Public Servicegovernance and funding sources heightens the risk that local governments will absorb costs
associated with regional economic drivers beyond their control.72
As noted previously, although amenity destinations are often rural, they can experience planning
and development problems associated with more urbanized areas. Yet research demonstrates that
many of these local governments are staffed very differently from urban governments, often due
to budget constraints. They often lack critical government capacity and expertise, such as full-time
city managers and planners.73
Solutions to local capacity limitations
Tackling infrastructure constraints in amenity destinations requires rethinking governance
structures and investing in local capacity. Amenity destinations would benefit from regional
collaborations, as well as increased partnerships between public and private stakeholders,
including tourist associations, nonprofits, private companies, and local, state, and federal agencies.
Coordinate regionally
Regional collaborations can provide coordinated solutions to the interconnected issues of growth,
economic transitions, and infrastructure needs. Regional collaborations can range from simple
intergovernmental agreements and shared personnel across multiple local governments, to more
coordinated responses.
For example, the Adirondack Community Recreation Alliance is a regional coordinating
initiative in New York that seeks to manage impacts from recreation while promoting sustainable
forestry, infrastructure investments, and economic diversification.74 In 2020 the group launched
an Innovation Fund to invest in community-based recreation initiatives, including increasing
connectivity and emergency rescue planning.
The Yosemite Area Regional Transportation System (YARTS) provides another example of how
local governments can work together to solve infrastructure problems.75 Merced, Mariposa, and
Mono counties created the regional system through a joint powers authority in 2000 in response to
growing traffic concerns around Yosemite National Park in California. Tuolomne County recently
joined the agreement, and the Merced County Association of Governments manages its operations.
Today, YARTS provides bus services to Yosemite National Park from gateway communities in six
counties to help decrease traffic. Bus service is increased during the height of the tourism season to
accommodate influxes in passengers.
Invest in unexpected partnerships
Partnerships between local governments, school districts, and private entities can also lead to
creative solutions to infrastructure and service problems. For instance, Watford City, North Dakota,
is the gateway community to the North Unit of Theodore Roosevelt National Park. In addition to
tourism, the community faced significant pressures on its infrastructure and services due to rapid
oil and gas development in the 2010s, including a lack of affordable housing and childcare. In
response, the city partnered with the county, the local school district, and a private company to
fund and develop affordable housing that included a public daycare.76
Unaddressed infrastructure and service shortfalls can deepen tensions between locals and visitors
Infrastructure provides basic services to communities, and problems can severely detract from
quality of life. When infrastructure problems are blamed on visitors, it can deepen tensions
between locals and visitors. In Bar Harbor, Maine, planning documents identify tourism as
a primary driver of the economy but then acknowledge that “tensions within the community
are prompting questions around the level of economic impact provided, taxes paid, amount
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 22 4. Infrastructure & Public Serviceof municipal services required, and perceived transportation and infrastructure impacts.”77
Mismatches between perceived benefits and costs of tourism can lead to divisions amongst
residents about the community’s direction and vision for growth.
Vermont’s Northeast Kingdom provides another case in point. The Northeast Kingdom is home
to Kingdom Trails, an extensive mountain bike trail system located predominantly on private
land. Kingdom Trails attracts $10 million annually in economic benefits to a rural region of fewer
than 10,000 people.78 However, the region has struggled to keep up with traffic and congestion,
creating tensions between trail users and locals. The conflict came to a head in 2020 when
multiple landowners prevented access to their private land for biking.79 In response, local and
state government agencies are working with the nonprofit that manages the trails to help solve
the infrastructure issues by creating more parking, a welcome center, expanded pedestrian
infrastructure, and additional trails to spread out users.
Infrastructure limits can also be used strategically by factions within the community to limit
growth. In Big Sky, Montana, constraints on the water system prevented new hook-ups. Residents
who were opposed to additional growth in the community also opposed investments in a new water
treatment plant. An unfortunate consequence of the water constraint, however, is that it contributed
to high prices in Big Sky, pricing out workers. Despite some disagreement, the community is
moving forward with a new water treatment plan that is also enabling a new workforce housing
development to help address the housing shortage.80
Solutions to community tensions
Proactive infrastructure planning can ensure the community functions for everyone, helping to
alleviate tensions between locals and visitors. In fact, tourism can allow rural communities to have
expanded services and infrastructure beyond the typical rural community. This can create win-win
scenarios for both visitors and locals.
Ensuring that locals benefit from tourism needs to be an intentional process. For instance, Moab’s
“Tomorrow Together: Vision & Strategic Action Plan” identifies the need to develop dedicated
community infrastructure for locals, such as meeting spaces and events.81 Investments in schools,
libraries, meeting places and community facilities, childcare, and public transportation can help
mitigate some of the negative impacts that locals may associate with visitors.
Communities can also build strategies to measure and track community cohesion. Standard
community and economic development metrics will likely fail to capture the nuances of how well
locals in the community are handling the community’s growth and change. Alternative metrics
and processes have been developed that can help local governments assess community wellbeing,
sense of belonging, and happiness.82 For example, Santa Monica’s Wellbeing Index includes
nontraditional metrics such as strength of local networks, equitable access to community spaces,
mental health status of residents, and business diversity.83
Further, identifying the many facets of infrastructure decisions can build support for projects and
form alliances among stakeholders that may seem unlikely. They can also create benefits that align
with the amenities that make these places attractive for residents and visitors in the first place. For
instance, when Big Sky, Montana’s wastewater system was overwhelmed by demand, it created
not only a public health problem but a water quality issue for the Gallatin River watershed.84
Identifying the conservation benefits of the solutions helped build support for the project. Similarly,
in Bar Harbor, Maine, plans to significantly upgrade pedestrian infrastructure may also decrease
the community’s greenhouse gas emissions, helping the community reach its sustainability goals.85
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 23 5. Fiscal Policy5. FISCAL POLICY
Fiscal policy encompasses all the ways that governments generate revenue from economic activity,
like taxes and fees, and how governments use these revenues to pay for services like roads, schools,
public safety, and hospitals.
To accommodate the pressures of growth, amenity communities will have to invest in programs,
incentives, enforcement measures, and government capacity, all of which cost money. It is possible
for fiscal policy to raise sufficient revenue for these programs equitably, ensuring that the burden of
paying for the costs of government services is not borne disproportionately by residents, visitors, or
the business community.
Amenity communities face unique considerations
Like municipal governments everywhere, the governments in amenity destinations often struggle
to pay for the infrastructure, policy programs, and other services they need. Unique among
amenity communities is the need to provide services for visitors, who far outnumber residents,
while also conserving the amenity that is supporting the community. Some local governments
suffer from legacies of dependence on single sectors and mismatched revenue. In many places,
state policies hamstring local government options. This section explores some of these distinct
fiscal challenges and solutions.
Without carefully considered tax policies, local governments will be unable to raise sufficient
revenue, leading to diminished quality of life and degraded resources. Residents can also
be left paying disproportionately for programs that benefit residents and visitors alike. This
disproportionate burden can lead to higher cost of living, driving out current residents.
Amenity communities face several particularly acute fiscal challenges, including:
• Volatile tax revenue that does not keep pace with growth and a changing economy;
• Tax policies that exacerbate rather than ameliorate inequality; and
• Unique local needs not reflected in state fiscal policies and federal programs.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 24 5. Fiscal PolicyThe table below summarizes the fiscal challenges and solutions amenity destinations are using to
generate sufficient tax revenue. Each is further described below.
CHALLENGE SOLUTIONS EXAMPLE
Volatile tax revenue that does not reflect a changing economy.
• Revenue is dependent on a single
industry, creating vulnerability to
disruption.
• Diversify revenue sources. • Utah’s Urban Wealth Fund
• Mismatch between historical
sources of revenue and today’s
economic drivers
• Link revenue streams to existing
economic drivers.
• Montana’s resort tax
Tax policies that exacerbate inequality
• Rising real estate values increase
property taxes, pricing out locals
• Create real estate transfer taxes
that can be reinvested locally in
housing and conservation.
• Vermont Housing and
Conservation Board
• Massachusetts Community
Preservation Act
• Fees imposed universally on
residents help pay for services
used by visitors
• Create a tourism improvement
district and use revenue to offset
costs created by visitors.
• Huntington Beach Tourism
Improvement District
Local needs not reflected in state fiscal policies
• Tax and expenditure limits prevent
local governments from having
enough revenue
• Allow local governments more
tax options and local control over
spending.
• Vermont and New Hampshire
have strong tourism sectors and
do not impost local limitations on
property taxes.
• Rules for tourism-related taxes
require marketing for more
tourism
• Change the rules or interpret the
rules more broadly so revenue can
be used to support development
and maintenance of tourism-
related needs
• Utah Transient Room Tax
• Bend, Oregon Sustainability Fund
• Federal funding tied to capital
improvements
• Create federal resources for
stewardship of resources
• SHRED Act
Revenue can be volatile and not keep pace with changes, creating
long-term challenges
Amenity destinations often have a rapidly changing and growing economy. Rapid growth and a
shifting economic foundation create two specific fiscal challenges.
First, communities that rely heavily on any one industry to support their economy are more likely
to experience volatile tax revenue, making long-term planning difficult. When economic shocks or
other disruptions like recessions, pandemics, or natural disasters occur, fewer people visit amenity
communities. Decreased visitation will affect local businesses that rely on visitors, directly
and indirectly.
For example, if a guiding service’s clients cancel a trip, the guide is likely to postpone hiring a
contractor for home repairs, the contractor will not purchase materials from a building supply
store, and so on. Depending on the state’s tax policies, these businesses will pay less in sales
taxes, lodging taxes, income taxes and, if the community’s real estate market dips, property taxes.
Thus, the decrease in visitation reduces the tax revenue streams that rely on visitors, directly and
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 25 5. Fiscal Policyindirectly. Decreased revenue will affect local government’s ability to provide essential services
to residents.
Communities with the most dependence on a particular industry and the fewest resources to
weather revenue volatility are the most vulnerable to severe disruptions to local services. For
example, the many Native American tribes whose tax base depends heavily on tourism to fund
essential services like public safety were disproportionately affected when the COVID-19
pandemic drove tribes to close their lands to visitors to protect residents’ health.86 The Havasupai
Tribe, in Arizona near the Grand Canyon, has been closed to visitors since the pandemic began
and revenues from visitors dropped to zero. As the tribe developed plans to reopen in 2022, floods
wiped out critical infrastructure.87 The Havasupai Tribe’s experience exemplifies the challenges
that accompany dependence on a single economic sector.
The second challenge faced by quickly changing amenity economies is a mismatch between
historic sources of tax revenue and today’s economic drivers. States whose primary source of
wealth historically has been commodity production can struggle when wealth is generated today
from amenities or other sectors. Many amenity destinations have developed gradually as local
leaders sought ways to diversify the historical economy that was dependent on the cyclical nature
of commodity production. While the economies of these places have diversified, oftentimes the
tax structure has not. Consequently, the bulk of state revenue oftentimes is reliant on commodity
production, like severance taxes, royalties, and revenue sharing, and does not effectively
capture revenue from today’s sources of wealth, like real estate sales, visitor spending, and
investment income.
When revenue is not aligned with how states generate wealth today, state and local governments
will be underfunded. States provide revenue transfers to local governments to support critical
services like education, public safety, and health services. Distribution formulas vary by state and
by revenue types, but on average these transfers amount to nearly half of what local governments
generate independently.88
Misaligned fiscal policy can also hinder economic diversification. For example, Wyoming’s tax
structure depends so heavily on fossil fuel revenues that new jobs created outside the energy
industry, such as in recreation, technology, or health care, will not generate enough revenue to
cover the costs of roads, public safety, or water infrastructure needed to support the growth. In
other words, new non-energy jobs come at a net cost to state government.89
Solutions to address volatility and mismatch between economy and
revenue sources
States and communities are pursuing fiscal solutions to promote economic diversification and tax
revenue diversification and align revenue generation with wealth generation. Aligning state tax
structure with today’s sources of wealth better positions state and local governments alike.
In Montana, to improve the alignment between today’s economy and sources of tax revenue and
allow incentives for economic diversification, tourism-dependent communities can enact a resort
tax. Incorporated towns with a population of less than 5,500 that the Department of Commerce has
deemed “tourism-dependent” can levy a sales tax on lodging, restaurants, bars, and destination
ski or recreation facilities. Voters in these communities both choose whether to enact the tax, the
rate to set (capped at 3% of revenue, plus an additional 1% possible for infrastructure-specific
projects90), and how to spend the revenue it generates. At least 5% of revenue must be used to
offset local property taxes.91 Currently 11 communities in the state have a resort tax and they use
it for a range of needs, including property tax abatement, drinking water source protection, water
treatment, trail maintenance, affordable housing funds, and local matches for loans and grants.92
Several aspects of Montana’s resort tax system are ideal for amenity destinations. First, the
revenue raised locally gets reinvested locally in a manner determined by voters. Second, the
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 26 5. Fiscal Policyrevenue is raised largely by tourist spending, ensuring that visitors fund programs that conserve
the amenities and offset the impacts of visitors on the community. However, the benefits of this
mechanism are limited to the places narrowly identified as resort communities. This means that
the counties surrounding these communities, which provide public safety services like search and
rescue, cannot levy a tax on visitor spending. It also prevents cities above the population threshold
of 5,500, which are gateways to the resort towns and host many visitors each year, from generating
revenue and offsetting local impacts from visitors. Additionally, the 3% cap may be too low for
communities to raise sufficient funds to meet their needs. Finally, communities that use resort tax
revenue to offset property taxes today without investing in other means of fiscal diversification can
create an excessive dependence on tourism.
In Salt Lake County, Utah, leaders are evaluating a novel approach called an Urban Wealth Fund
to diversify and increase public revenue that can keep pace with rapidly growing communities.
In this approach, the local government identifies unused municipal properties, like parking lots
or inholdings. Rather than selling these properties for market value, local governments retain
ownership, partner with development entities, and retain an investment in these properties as a
new revenue source.93 Several U.S. cities are taking initial steps to evaluate the potential for an
Urban Wealth Fund.94 While current practices have focused on mid- to large-sized cities, the
high property values in amenity communities could provide an untapped revenue opportunity in
smaller towns.
The New Mexico State Land Office has undertaken projects in a similar vein on its state trust lands,
retaining ownership of the lands but leasing the land to businesses and community organizations.95
The State Land Office auctioned off a lease to a parcel in central Albuquerque for an affordable
housing project for seniors. The project will generate revenue for the State Land Office and help
meet the community’s needs.96
Fiscal policies can exacerbate inequality
When residents bear a disproportionate share of the costs of growth, such as funding expanded
infrastructure and public services through property taxes, a community’s long-term residents can
be displaced and economically excluded. Research has demonstrated how newcomers in rapidly
changing communities are often better positioned due to education and social connections to take
advantage of economic shifts, while many long-term residents are left behind.97
In amenity destinations, community leaders may be unable to capture sufficient revenue from the
activities generating economic activity like retail purchases, guided trips, and hospitality. With
insufficient revenues, services to support residents and visitors are cut, or their cost is borne
through rising property taxes or fees.98 Fees, such as water treatment, parks, or street improvement
fees, often are regressive, as they are generally implemented as a flat fee rather than based on a
person’s ability to pay or use of the service or resource.99 When amenity destinations implement
fees on residents for services enjoyed by all (including visitors), the cost of living increases
for residents.
As amenity destinations prosper, real estate and businesses attract outside investors, oftentimes
leading to the consolidated ownership of local businesses and long- and short-term rental stock. For
example, in Big Sky, Montana, two development companies own the vast majority of real estate
and hospitality venues. When the ownership of businesses and properties is consolidated into a
small number of companies there often are fewer opportunities for local business ownership and
wealth building, and more competition to purchase properties. 100
Solutions to improve equality using fiscal policies
Fiscal policies can be used to invest in residents’ needs and help alleviate the inequality associated
with rapidly growing amenity communities.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 27 5. Fiscal PolicyTo help support home-grown entrepreneurs and small
businesses, communities are establishing programs like
business incubators and loan programs. For example, the
Williston, North Dakota, STAR Fund provides funding
for technical assistance to start-ups and small businesses,
including funds to buy down interest rates for loans on
property or equipment, renovate buildings, create quality-
of-life enhancements in the community, or obtain licenses.
The STAR Fund is funded by a 1% city sales tax and has
supported 250 businesses since 2010.101
While an influx of wealth contributes to unaffordable
housing, some states have targeted policies like real estate
transfer taxes or deed recording fees that generate revenue
to offset the negative impacts. Several states direct a
portion these funds toward outdoor recreation-related
infrastructure. For example, the Vermont Housing and
Conservation Trust Fund, administered by the Vermont
Housing and Conservation Board (Board), is unique in
its coordinated focus on economic development, land
conservation, and housing affordability. The state’s real
estate transfer tax rate, applied to all property sales, varies
depending on property value and whether the property
will be used as a primary or nonprimary residence.
Buyers of primary residences pay 0.5% for the first
$100,000 and 1.25% for any amount greater than $100,000.
Buyers of nonprimary residences pay 1.25% of the sale
price. The revenue is used to support grants or loans for
municipalities and housing or conservation nonprofits,
and the Board prioritizes projects that include elements
of land conservation and housing affordability. By
prioritizing projects that meet multiple goals, the Board
has supported creative collaborations between housing
and conservation advocates.
Statewide policies can incentivize local investments. In
Massachusetts, the Community Preservation Act (CPA)
was designed to create incentives for communities to
prioritize their quality of life through investments in
preserving open space and historic sites, investing in
outdoor recreation facilities, and creating or maintaining
affordable housing. Communities that participate in the
program add a surcharge to their own property taxes,
which then makes them eligible to receive matching funds from the state. Communities can also
issue bonds against future revenue streams to fund large projects.
For example, Provincetown, Massachusetts, is an amenity destination at the far end of Cape Cod,
an area dominated by second homes and vacation rentals where permanent residents struggle to
find housing. The city used CPA funds to purchase and remediate a property downtown to create
50 housing units to serve year-round residents primarily earning low to moderate incomes.
Businesses that benefit from tourism also can lead the way in creating revenue streams that reduce
tourism’s impact. Tourism Improvement Districts (TIDs), modeled after Business Improvement
Districts, allow hospitality businesses to assess themselves to raise revenue from their industry.
The fees are passed on to visitors, appearing as “destination fees.” While these largely have been
The Role of Property Tax Relief
Communities with rapidly increasing property values
also face rapidly increasing property tax bills that
can overburden residents.
To alleviate growing expenses for property owners,
some communities look to property tax relief
measures. For example, in Montana’s communities
that levy a resort tax, at least 5% of the resort tax
revenue must be applied to reduce the property tax
levy for the following year. Columbia Falls, the most
recent community to pass a resort tax levy, uses 25%
of its revenue to offset resort tax revenue.
While property tax relief can help alleviate rising
housing costs, communities need to consider three
important shortcomings.
First, reducing property tax rates does not increase
housing supply, which is the primary driver behind
rising housing costs. Communities that enact
property tax relief without also developing a robust
policy to increase the supply of housing limit
the improvements they can make in the housing
cost burden.
Second, the benefits of property tax relief are
likely to go mostly to property owners, not renters.
Because rents generally are fixed, with property
tax expenses rolled into total rent, few landlords
are likely to adjust rents up and down annually as
property taxes fluctuate.
Finally, communities need diversified tax revenue
streams. Places that rely on tourism revenue to
offset property taxes that fund essential services
will face fluctuating property tax bills and budget
shortfalls when tourism drops, such as during a
recession or after a natural disaster.
While property tax relief is an important tool to
address housing costs, it must be used judiciously.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 28 5. Fiscal Policyused to fund additional destination marketing, TIDs could
be structured to create a revenue stream to subsidize
employee housing, transportation, or otherwise offset the
high cost of living and working in amenity destinations.102
The city of Huntington Beach, California, is using some
of the revenue from its TID to fund electric shuttles in the
downtown area to alleviate congestion.103
States and federal fiscal policies can limit
local flexibility
States play a critical role by enabling or limiting
municipalities’ ability to creatively raise and save revenue.
Many states limit the ways in which municipalities can
raise and spend revenue, known as tax and expenditure
limits (TELs). Some limit property tax rates or their
growth rate;104 others prohibit sales taxes entirely, or the
goods and services that qualify for sales taxes;105 and
many states prohibit or otherwise limit local income taxes.
These restrictions, intended to protect taxpayers from
excessive or unjust tax burdens, can leave municipalities
with insufficient revenue or the inability to adapt to a
changing economy.106
Many states with lodging taxes limit spending of that
revenue to only those activities that promote additional
tourism. Many states restrict how revenue from tourism-
related taxes can be spent, and often the requirements
do not reflect current economic conditions. For example,
in Colorado, many tourism destinations were inundated
with visitors during the COVID-19 pandemic, and these
communities did not have the hotel rooms, restaurant
employees, or parking spaces to absorb new visitors.
Despite the fact that communities were already exceeding
visitor capacity, state regulations dictate that lodging
tax revenue must be spent on tourism marketing
and promotion.
Finally, federal policy and grantmaking often support
one-time capital projects, such as expanding water
treatment, rather than ongoing programs like operation
and maintenance for the capital investments, or
social services.107
Solutions that allow communities to
creatively raise and spend revenue
Amenity communities can advocate at the state and federal level for greater flexibility in how
they can raise and spend revenue locally, expanding their ability to reinvest revenue to address
local needs.108
Amenity communities have been working to find more flexibility with how they can spend
tourism-related revenues by both changing the enabling legislation for the tourism-related taxes
and by interpreting the regulations around those taxes more expansively.
The Role of Philanthropy
Many amenity destinations are fortunate to have
residents who donate generously to local charitable
causes. Funding through individual donations or
private foundations can be particularly powerful
in places where state policies limit municipalities’
ability to raise and spend revenue.
While philanthropic dollars support a wide range of
activities, the amount of funding reflects donors’
greatest interests, not necessarily the community’s
greatest needs. In wealthy communities like Jackson
Hole, Wyoming, for example, organizations that
address the environment and the arts are far better
funded than social service organizations.i
Communities that can channel philanthropic
dollars toward the community’s greatest
needs will be better positioned to leverage
philanthropic opportunities.
One mechanism is via community foundations,
grantmaking organizations that pool donations from
individuals, private foundations, and businesses.
Community foundations take a more holistic
perspective of a community’s charitable needs
and allocate grants to local organizations in a
manner that reflects the values of the community
rather than individual donors. The success of these
organizations, particularly in rapidly growing
communities, depends on a well-balanced board
comprised of long-time and newer residents
reflecting a range of perspectives.
Philanthropic dollars are also well-suited to finance
revolving loan funds (RLFs). These funds can be used
to finance the construction of affordable housing,
preserving foundation endowments while lowering
borrowing costs for builders. RLFs also can be used
for upfront costs on projects that are funded by
grants that reimburse expenses.
i Farrell, J. (2021). Billionaire wilderness: The ultra-wealthy and the
remaking of the American West (Vol. 24). Princeton University Press.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 29 5. Fiscal PolicyMunicipalities must have the flexibility to spend revenue in a manner that reflects the community’s
needs in its amenity-based economy. For communities early in developing their amenity economy,
this could include developing facilities like trailheads and wayfinding, or promoting the area’s
attractions. For communities that are established amenity destinations, the revenue may best be
used by expanding infrastructure like wastewater treatment facilities, supporting affordable housing
programs, or increasing funding for public transportation or public safety like search and rescue.
Leaders in Grand County, Utah, home of Moab, were able to advocate to change state law governing
the allocation of the transient room tax to shift a greater share of revenue toward mitigating the
impacts of tourism in gateway communities and supporting economic diversification activities.109
Revenue used to mitigate the impacts of tourism primarily is spent on law enforcement and search
and rescue. Economic diversification activities include a grant program for small businesses, a small
business resource center run through Utah State University, free business planning classes, and a
revolving loan fund.110
Leaders in Colorado resort communities have been working to change state legislation and enable
local voters to direct how lodging tax funds are allocated.111 Though legislation has not yet passed,
resort communities continue to elevate the need to change state policy and make it easier for
communities to apply this revenue where it is most needed.
Bend, Oregon, allocates a portion of its lodging taxes to the Bend Sustainability Fund. Any
community organization is eligible to apply for grants to “protect, steward or create a tourism-related
facility with an impactful life of greater than 10 years.” While the facility must have substantial use
from visitors, the term “tourism-related facility” is interpreted broadly to include constructing new
trails, improving the quality of beginner cross-country skiing trails, and improving trailheads and
signage to better disperse visitors. As of 2022, the program awarded $2.3 million to 17 projects.112
In Taos, New Mexico, where wildfire risk is severe and growing, the city is using funds from
lodging tax revenue, which dictates that revenue must be spent on tourism promotion, to restore
nearby forests.113
As recreational use of public lands has increased, recreational budgets have not kept pace. This
mismatch has led to resource degradation, poorly maintained trails and trailheads, and lax
enforcement of rules for recreation facilities. For communities that depend on outdoor recreation
attractions on nearby public lands, insufficient budgets to manage recreation on public lands poses a
threat to their economic well-being.
Some communities, like Eagle County, Colorado, where Vail is located, have recognized the threat
this poses to their amenity-based economy and have used local tax dollars to pay for U.S. Forest
Service staff to monitor trails and campgrounds.114
Lawmakers also have proposed legislation that would retain more revenues at the Forest Service
units where recreational permit fees are generated. Currently revenue from recreational fees, such as
those paid by ski areas, go to the U.S. Treasury. The Ski Hill Resources for Economic Development
(SHRED) Act,115 in committee as of late 2022, would keep 75% of those fees on Forest Service units
that generate $15 million or less, or 60% for those units that generate more than $15 million. These
funds could be used by the Forest Service unit to support activities related to visitor experience and
administration of ski areas, wildfire preparedness, avalanche information and safety, and general
recreation management. Legislation like the SHRED Act could provide units with sufficient funds
to manage recreation well, reducing the burden on local governments to support management on
public lands.
Recently the Census Bureau redefined “urban” communities to consider housing units as well as
population. This change could bump resort communities with low population but a high number of
second homes into the urban category. Reclassified as “metropolitan,” these places will have access
to federal funding sources only available to urban areas such as transportation planning.116
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 30 6. Natural Disasters6. NATURAL DISASTERS
As disasters like wildfires and floods become increasingly common, the underlying amenity trap
challenges intensify and the need for solutions becomes more urgent. While much of the world is
increasingly exposed to natural disasters like flooding and wildfire, amenity communities face
severe hazards because of their inherent proximity to natural areas. Because the economies of
amenity destinations depend on their natural environment, disasters are particularly disruptive.
Natural disasters affect many aspects of life in amenity destinations, including the three other focal
areas for this report: housing, infrastructure, and fiscal security.
In places where affordable housing is already difficult to come by, a severe natural disaster can
further wipe out housing stock and increase the cost to insure the housing that remains. The
impacted communities, along with nearby communities, see a significant rise in rental costs as
people seek temporary housing while they rebuild. Mobile and manufactured homes, an important
component of many communities’ affordable housing stock, are more likely to be damaged
during floods and wildfires, and residents are less likely to have insurance or other funds to
rebuild. The effects are felt well beyond the immediate communities impacted by fires and floods
as communities throughout the region experience rapid growth from displaced residents, placing
unanticipated demands on schools, roads, and wastewater treatment.
Natural disasters often damage other critical infrastructure as well, and the uncertainty and
intensity of climate-related disasters make planning and funding more challenging. Commonly,
amenity communities have smaller populations and limited tax revenue to pay for the maintenance
and upgrades needed to withstand disasters. For communities that depend on tourism, disrupted
services such as providing drinking water and wastewater treatment will limit their ability to
host visitors. In Gardiner, Montana, for example, visitors and residents were unable to consume
municipal water when floods damaged the town’s water main.117
Communities with overly specialized economies are more vulnerable to disruption. This is true
of amenity communities whose tax base depends largely on tourism-related activities to fund
essential services. For example, in the aftermath of the Yellowstone River floods in 2022, lodging
tax revenue declined by 92% in Gardiner, Montana, compared to July-September in 2021.118
Solutions to reduce disruption from natural disasters
The increased frequency and severity of natural disasters adds urgency to the solutions highlighted
elsewhere in this report. Amenity destinations must anticipate that a changing climate will affect
their ability to house residents and visitors, infrastructure needs, and fiscal health. Five critical
solutions are highlighted here.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 31 6. Natural DisastersBuild homes less vulnerable to disasters.
As amenity destinations increase their housing supply, they must seek ways to minimize
risk from natural disasters. Towns can avoid new construction in areas of highest risk and
build structures that are resilient to disasters. This might include requiring wildfire-resistant
construction119 and elevating housing in areas of flood risk.120 For example, Chelan County,
Washington, is at the forefront of communities developing a comprehensive policy to make
housing less susceptible to wildfire through detailed risk assessment, zoning, regulations, and
voluntary measures.121
Invest in infrastructure to reduce risk
Communities across the country are investing in projects that reduce natural disaster risks
and build climate resilience. From increasing water storage to building microgrids to reducing
wildfire fuels, climate adaptation infrastructure projects are growing in popularity because they
improve safety and reduce the impacts of future disasters. Many mitigation solutions create
additional community benefits such as improving water quality and access to nature trails,
making them especially smart investments for amenity communities.
Create plans that improve resilience and address equity.
Communities experiencing amenity-related growth have an urgent need for proactive and
inclusive planning, including for land use changes, economic development, and emergency
management. Given the inequities that can exist in amenity communities, local government
should prioritize efforts to protect vulnerable residents. Development, hazard mitigation, and
emergency management planning documents can address not only where natural hazards are
likely, but where vulnerable populations may experience disproportionate impacts. Inclusive
engagement is especially important, but amenity communities often have populations that are
hard to reach, including second homeowners and visitors, older residents, migrant laborers, and
mobile home residents. Creating engagement processes that include these voices is challenging
but key for directing the community’s future growth in ways that benefit everyone. Many tools
are available to communities to help identify vulnerable populations, including Wildfire Risk to
Communities, Neighborhoods at Risk, and FEMA’s Resilience Analysis & Planning Tool.
Invest in capacity
Amenity communities experiencing rapid growth can become overwhelmed and forced into a
reactive mode. Communities often need to hire additional staff or even create new departments
within local governments to respond to changing demands and enable proactive decision making.
Communities with limited resources may need to think creatively about how to expand local
capacity without adding large expenses. For example, multiple communities may invest in a
shared staff position such as a grant writer or a resilience coordinator. Joining a regional project
or initiative to address hazards, such as flood or wildfire risk, is another way to add capacity at
the local level.
Diversify revenue
Communities that can diversify their revenue streams and save for a rainy day will be better
able to withstand disruptions from natural disasters. Disaster aid often is based on population;
reforms to state and federal programs that recognize the unique challenges faced by amenity
destinations with a high number of visitors and second homeowners can help these communities
fund infrastructure to meet their needs.122
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 32 7. Conclusion7. CONCLUSION
Amenity destinations can benefit greatly from tourism and economic growth, but those benefits can
also lead to painful challenges, particularly in housing, infrastructure, fiscal policy, and disaster
resiliency. To address these negative impacts local leaders need latitude to experiment with new
policies and partnerships. It is vital that state and federal policy recognize this need for local
flexibility. There is ample evidence from around the country that local leaders can bring solutions
to their communities when they can be creative.
The benefits of amenity communities are enjoyed by both residents and visitors, but all too often,
it is residents who bear the costs of amenity-related growth. When these costs are borne equitably
by residents and visitors, a community is more likely to avoid the negative consequences of rapid
growth or overbearing waves of tourism.
In fact, aligning solutions with the very forces behind the challenges can be one of the most
successful strategies for amenity communities. Just as spreading costs across visitors and residents
can better preserve infrastructure and affordable housing, so too can land use policies alleviate
the impacts of sprawl and enhance public land access. Business incubators and loan programs can
encourage homegrown entrepreneurship, alleviating inequality as well as workforce challenges.
Aligning revenue generation with wealth generation can give communities the resources they need
to adapt to growth.
Above all, proactive action is required for amenity communities to maintain the qualities that
make them great. These places have a vibrancy that depends on protecting the very things that
attract people to live and play there. Once amenities begin to erode, it can be very difficult to get
them back.
Each community will need to build its own set of solutions, applying strategies that work for
its population size, culture, and urban or rural setting, as well as leveraging regional and state
resources. Communities across the nation are using dozens of approaches to reap the benefits of
amenity-rich locations without sacrificing fiscal health and community well-being. We have a
tremendous opportunity now to share solutions and avoid the amenity trap.
Amenity Trap: How high-amenity communities can avoid being loved to death, May 2023 https://headwaterseconomics.org | 33
Endnotes
1 While the term “amenity” related to a place can include cultural amenities like museums and historical areas, or public amenities like libraries and schools, in
this report we focus solely on natural amenities due to the unique opportunities and challenges they can present for those communities.
2 Lawson M. (2019). Recreation counties attract new residents and higher incomes. Retrieved from https://headwaterseconomics.org/economic-development/trends-performance/recreation-counties-attract/
3 Lawson M. (2018). Economic diversification and outdoor recreation in Bonner County. Retrieved from https://headwaterseconomics.org/economic-
development/local-studies/bonner-county-economic-diversification/
4 Walls M, Lee P, Ashenfarb M. (2020). National Monuments and economic growth in the American West. Science Advances, 6(12). Retrieved from https://www.science.org/doi/10.1126/sciadv.aay8523.
5 Lawson M, Rasker R, Gude P. (2014). The Importance of Non-labor Income: An Analysis of Socioeconomic Performance in Western Counties by Type of Non-labor Income. Journal of Regional Analysis & Policy, 44(2): 175-90.
6 Sodja E. (2021). Boomtown: Amenity Migration in the Rural West and the Rise of the Zoom Town.” Logan, UT: Gateway and Natural Amenity Region
Initiative. Retrieved from https://digitalcommons.usu.edu/cgi/viewcontent.cgi?article=3181&context=extension_curall
7 Lawson M. (2021). Housing costs broke records across the U.S. Retrieved from https://headwaterseconomics.org/equity/record-breaking-housing-costs/
8 Lawson M. (2019). Recreation counties attract new residents and higher incomes. Retrieved from https://headwaterseconomics.org/economic-development/
trends-performance/recreation-counties-attract/
9 Lawson M. (2019). Non-labor income in the rural West. In People & Public Lands Series. Retrieved from https://headwaterseconomics.org/public-lands/papl-lawson/
10 Schuetz J. (2022). Fixer-upper: How to repair America’s broken housing systems. Washington, DC: Brookings Institution Press.
11 Cackley AP. (2020). Homelessness: Better HUD oversight of data collection could improve estimates of homeless population (GAO-20-433). Washington, DC: U.S. Government Accountability Office. Retrieved from https://www.gao.gov/assets/gao-20-433.pdf
12 Dawkins CJ & Nelson AC. (2002). Urban containment policies and housing prices: an international comparison with implications for future research. Land
Use Policy, 19(1), 1-12. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0264837701000382
13 Arku G. (2006). The housing and economic development debate revisited: economic significance of housing in developing countries. Journal of Housing and the Built Environment, 21, 377-395. Retrieved from https://link.springer.com/article/10.1007/s10901-006-9056-3
14 Gonzalez-Gorman S, Kwon S-W, Bak D & Park S-C. (2018). Can cities attract affordable housing for economic development? The roles of growth
management policies and urban political institutions. Journal of Public and Nonprofit Affairs, 4(2), 181-196. Retrieved from https://doi.org/10.20899/jpna.4.2.181-196
15 U.S. Economic Development Administration. (n.d.). Aligning plans and resources. Retrieved from https://www.eda.gov/strategic-initiatives/economic-development-integration/resource-alignment
16 City of Lafayette. (2022). Economic development and housing strategic plan. Retrieved from https://lafayette-listens.com/edhsp
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