Workforce Housing in Resort, Coastal and Rural Communities

Resort, coastal and rural communities have a workforce housing problem that looks different from a big city’s. In a ski town or beach town, home prices are set by visitors and second-home buyers, whose incomes have little to do with local pay. The people who run the lifts, clean the rooms, staff the clinics and teach in the schools compete for what is left. Rural places without tourism face a quieter version of the problem and lean on a small set of federal rural housing programs.

The responses are also distinctive. Because income-based subsidies miss many of these workers, resort communities have built tools around a different test: whether the occupant works locally. They buy deed restrictions, build seasonal dormitories, lease hotels, cap vacation rentals and tax visitors to pay for it.

Why These Markets Are Different

Outside money sets the price

In most housing markets, local residents are the buyers, so prices stay loosely tied to local incomes. Resort markets are different. Summit County, Colorado, home to the Breckenridge and Keystone ski areas, is a well-documented case. Mortgage data in its 2023 housing needs assessment show that buyers who took out loans for a principal residence in 2021 had a median income of $130,000. Second-home buyers had a median income of $291,000.

Once a home passes to an outside buyer, it tends to stay out of local hands. A 2021 HUD case study of Vail, Colorado, reported the town housing director’s finding that about 90% of sales by local homeowners in 2016 went to nonresidents.

Homes without year-round residents

The Census Bureau counts a home held for seasonal use as vacant. It notes that these seasonal units are found mainly in resort areas. In such places the “vacant” share of housing can be very large:

• Summit County, Colorado. In 2021, permanent residents occupied 40.6% of the county’s 31,739 housing units. The county’s housing needs assessment estimated that, as of 2023, 33% of units were used as short-term rentals and 26% as vacation homes.
• Sussex County, Delaware. In 2017, more than one-third of housing units had no year-round occupant (see the illustration below).

Short-term rentals add pressure when owners rent to visitors instead of year-round tenants. Rigorous evidence on the size of the effect comes mostly from cities. A 2021 study of Los Angeles County found that strict home-sharing ordinances cut listings by 50% and lowered house prices and rents by about 2%, with much larger effects near tourist attractions. Summit County’s assessment attributed a 2019–2021 dip in its permanent population partly to long-term homes converting to short-term rental and second-home use.

A workforce that swells and shrinks

Tourism runs on seasons. Employers need many more workers in winter or summer than in the off months, and those workers need seasonal workforce housing for only part of the year. Housing that sits empty for months is hard to finance.

Two federal visa programs shape this market:

• J-1 Summer Work Travel brings foreign college students to the United States for jobs lasting up to four months. Federal rules require program sponsors to consider whether suitable, affordable housing is available before placing a student. If the employer does not provide housing, the sponsor must actively help the student find it.
• H-2A covers temporary farm work. Employers must provide housing at no cost to H-2A workers, and to other workers in the same jobs, who cannot reasonably return home the same day. This rule is a major reason employers provide farmworker housing.

Year-round tourism jobs also tend to pay modest wages while local housing is priced for visitors. Many resort programs therefore reach well above the usual area median income (AMI) cutoffs for housing aid, or drop income limits altogether.

Commuting in

When workers cannot live near their jobs, they commute from cheaper towns inland or “down valley.” Summit County’s assessment found that jobs grew faster than the resident workforce after 2010. It concluded that the county’s main industries depend largely on a labor pool living outside the county.

The rural version

Rural communities without a tourism economy face a quieter version of the problem. The U.S. Department of Agriculture’s Rural Housing Service, part of USDA Rural Development, runs the main federal programs aimed at rural areas:

• Section 515 finances rural rental housing for low-income tenants. According to a 2022 Congressional Research Service (CRS) overview, USDA has not made loans for newly built Section 515 units since fiscal year 2011. It has used its lending authority to preserve existing properties instead.
• Section 502 home loan guarantees reach households with incomes up to about 115% of AMI, which puts them among the few federal programs that serve the workforce income band.
• Sections 514 and 516 fund farm labor housing and give priority to domestic farmworkers.

How Communities Respond

Buying deed restrictions

A deed restriction is a recorded limit on how a property can be used. Resort towns have long attached them to homes built or sold through local housing programs. The Aspen/Pitkin County Housing Authority’s program, for example, dates to the late 1970s. The newer idea is to buy restrictions on ordinary market homes.

Vail launched Vail InDEED in 2017. The town pays owners and developers to record a permanent requirement that the home be occupied by a household with at least one person working 30 or more hours a week for an Eagle County business. The owner can live there or rent to a qualifying worker. There is no income limit and no cap on price or rent. HUD’s case study reported that the town paid 15% to 20% of a property’s market value and had restricted 165 homes in the program’s first four years.

Suppose a condo is worth $500,000 and a town pays 15% for the restriction. The owner receives $75,000 and gives up the right to sell or rent to anyone who does not work locally. The town gets a home reserved for workers without building or managing it.

Other places have copied the model with variations:

• Summit County’s Housing Helps pays buyers 10% to 15% of the price for a “light” restriction requiring a local worker as owner or renter. It pays 15% to 25% if the buyer also accepts a 3% annual cap on appreciation.
• Big Sky’s Good Deeds in Montana pays up to 20% of a home’s value for a permanent restriction. At least one occupant must work 30 hours a week for a Big Sky business, and short-term renting is prohibited. Later buyers of these homes can apply to the housing trust for down payment assistance.
• Teton County, Wyoming, which includes Jackson, runs a Workforce Housing program that has no maximum income but requires that 75% of household income be earned locally. Its separate Affordable Housing program applies income limits and asset limits in tiers that go up to 160% of median income.

Employer housing and dormitories

Resort employers have long housed seasonal staff, a form of employer-assisted housing. Summit County’s assessment notes that ski resorts typically focus on securing beds for seasonal workers. Other employers have begun master-leasing units for year-round staff. The employer housing guide covers the models in detail.

Three projects show the range:

• Solar Vail is a 65-unit apartment building developed by the property arm of a Vail hotel, primarily for hotel employees. It opened in November 2019. The town paid $4.2 million for deed restrictions on every unit.
• Powder Light in Big Sky is a privately built campus of shared suites leased to local businesses, not to individual tenants, for their seasonal staff.
• Village at Wintergreen in Keystone, Colorado, has 196 rental units on land the ski resort operator made available. It combines 36 seasonal units for resort employees, 120 units with capped rents for people working at least 30 hours a week in the county, and 40 units financed with the Low-Income Housing Tax Credit.

Governments also use adaptive reuse of lodging. Summit County has master-leased or bought several former hotels and rents the rooms to local workers and employers. One building drew 212 applicants for 35 publicly available units.

Limits on short-term rentals

Summit County requires a license for any rental of fewer than 30 consecutive days in its unincorporated areas. Under rules that took effect in February 2023, it caps the number of standard (Type II) licenses in neighborhood zones in each of four basins. Across the four basins, the Type II count fell from 1,814 before the new rules to 1,232 in January 2026. A separate license type (Type I), for homes with a qualifying occupant who lives at the property and works in the county, does not count against the cap.

Local money and public land

Federal housing programs are aimed mostly at lower incomes, so resort communities raise their own funds. Summit County voters approved a 0.6% sales tax for housing in 2016 and extended it for 20 years in 2021. A 2022 Colorado law lets counties and local marketing districts, with voter approval, spend lodging tax revenue on housing and childcare for the tourism workforce, including seasonal workers.

Land is the other scarce input, and using public land for housing is one answer. In September 2023, Summit County signed a ground lease with the U.S. Forest Service to redevelop a federal work site in Dillon for workforce housing. The county describes it as the first lease of its kind.

Trade-Offs and Criticisms

• Occupancy rules do not guarantee affordability. A restriction with no price or income cap narrows the pool of buyers but can still leave a home out of reach for lower-paid workers.
• Housing tied to a job is fragile. A worker in employer housing who loses the job can lose the home with it.
• Rental caps have costs. They reduce income for owners, and the best evidence points to modest effects on prices and rents.
• Subsidies go to middle-income households. CRS reported that about 28% of households earning 80% to 120% of median income had housing problems in 2023, and that such households tend to have fewer housing problems than low-income households. Money spent here is not spent on households with greater need.
• Scale is small. Summit County’s assessment found that homes dedicated to workforce or affordable use made up about 8% of the county’s housing stock.

An Illustration: Coastal Sussex County, Delaware

Sussex County contains Delaware’s Atlantic beach towns and a large farming and poultry region inland. A housing needs analysis prepared for the county in 2019 shows the same patterns:

• Of an estimated 138,002 housing units in 2017, 49,980 had no year-round occupant. Nearly 42,000 of those were held for seasonal use, more than 40,000 of them in the eastern, beach side of the county.
• Accommodation, food service and retail accounted for 31% of county employment, with average pay in the $20,000s or below.
• About 72% of county jobs were held by county residents in 2015, and roughly 18,000 workers commuted in. The analysts concluded that many workers likely commute from the western side of the county to tourism jobs near the beach.
• Manufactured housing, a source of lower-cost homes, was a shrinking share of the county’s housing stock.

The county has responded with two local tools. The Sussex County Rental Program, created in 2008 and substantially revised in 2022, gives developers incentives to include below-market rental units in projects in the coastal area. Tenants must earn between 30% and 80% of AMI. A county housing trust fund was launched in April 2022 with $500,000 in county funds and $6.3 million in federal American Rescue Plan Act money. It has two parts: a development fund and direct homebuyer assistance. For current income figures, use HUD’s income limits lookup. The Delaware housing guide covers state programs.

The Bottom Line

In resort, coastal and rural communities, the housing shortage for workers stems largely from who is bidding for homes and how few are available to year-round residents. Standard income-based programs help but do not reach many of the households affected. Communities have responded by reserving homes for local workers through deed restrictions, employer housing, rental limits and locally raised money. These tools work at a modest scale and involve real trade-offs between affordability, property rights and tourism revenue.