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By Julie Satow
The small town of Hocha, on the shores of Broken Bow Lake in southeastern Oklahoma, was founded just over a year ago. And that’s almost entirely due to Airbnb.
“Airbnb built this city 100 percent,” said Dian Jordan, mayor of Hochatown. Last November, Jordan and 128 other citizens fought effectively to incorporate a narrow 11-square-mile strip of bumpy dirt roads, modest log cabins and huge, trendy houses that sit on the territory of the Choctaw Nation of Oklahoma.
During the week, Hochatown has a population of just 219, but on weekends, up to 50,000 visitors, most of them from Dallas a three-hour drive away, flock here to kayak, fly fish, and hike among waterfalls, thick pine rapids, and papaya forests.
Before the pandemic, Hochatown had about 400 cabins to rent on Airbnb. There are now more than 2,400, a staggering 413% cumulative in five years, according to AirDNA, a short-term rental site that tracks Airbnb data. The city collected its first-month sales tax, totaling $456,000, and expects to collect up to $1 million in tax revenue per month.
“For a city of a few hundred people, that number is astronomical,” said David Francis, chief business registrar for the Oklahoma Tax Commission. “The city is a giant Airbnb. “
At the height of the pandemic, the number of Airbnb listings in small towns and rural spaces skyrocketed, as city dwellers fled to the countryside. At the same time, urban spaces have cracked down on short-term rentals, adding New York City, which implemented strict new regulations in September on who can (and can’t) rent out their homes to short-term guests. Since its implementation, the company’s short-term listings in New York have fallen 77%, according to AirDNA.
Some predicted that those regulatory changes would spell the end of Airbnb, and some reports indicated that its profits were plummeting as the waning pandemic changed habits. But last week, the company reported better-than-expected third-quarter results. , added about a million active listings this year, and in the first part of 2023, Airbnb visitors stayed in more than 94,000 cities and towns, a record, the company said.
“The dispersion of tourism, in places where there are no hotels, has primary economic benefits,” said Jay Carney, Airbnb’s global head of policy and communications. “Areas that would possibly experience population decline or industry relocation can now generate tourism gains for the first time. “
But the company’s report also contained a point of knowledge that reaches into Airbnb boom towns like Hochatown: For the first time since the recovery from the pandemic, Airbnb’s source of rental homes is outpacing demand, with 19% year-over-year growth, up from just 14% percent for the app. This hole can be disastrous for hosts, especially those who bought homes at the height of the market with the idea of renting them out. In excessive cases, they are forced to sell at a loss.
“Five percent difference between source and demand is very significant,” said Bjorn Hanson, an assistant professor at Jonathan M. University’s Tisch Center for Hospitality. of New York, and can cause hosts to slash their prices, in what may temporarily become a race to demand. the most sensible price. low.
What’s called the Airbnb effect has reshaped the landscapes (and economies) of countless small towns across the United States. In Orthport, Alabama, Airbnb listings have increased 47% in the last 12 months. In East Texas, Airbnb listings have increased more than 168% year-over-year.
Perhaps no position has been more remodeled than Hochatown. U. S. Highway 259, a two-lane highway, is the only way in and out of the city. On weekends, there is a traffic jam of long-distance trucks, tribal buses, and tour vehicles, joined by streams of motorhomes. Hochatown doesn’t have a single, pro cop or firefighter. There is no sewage system, no garbage collection, not even enough water to cope with the proliferation of other people and new housing.
As its popularity grew, Hochatown’s efforts to become an official city accelerated. Because it was an unincorporated area, decisions about its services and application resources were made through McCurtain County. For example, as Airbnbs grew and one-bedroom cottages became million-dollar rental units, Hochatown’s roads remained unpaved and riddled with potholes, many of which were impassable without 4×4 vehicles; Landowners paid to pave their own roads.
Water some other urgent issue. Most Airbnbs on the domain have hot tubs, which use an excessive amount of water. “If you don’t have a spa, you can’t rent one,” said Leo Winegar, who owns a cabin in Hochatown. “But if a pipe breaks down, due to a lack of redundancy and infrastructure, part of the town has not had water for days. “
Some come from the Choctaw Nation, the third-largest Native American tribe in the country. It’s Choctaw Landing, a $238 million hotel and casino complex in Hochatown, which is expected to attract 443,000 visitors a year when it opens this spring. To facilitate this, the tribe is expanding the amount of U. S. Highway 259 and improving some of the area’s rural water infrastructure.
The town of Hochathe has a long history, although its identity as a town is short. Flint spears and darts imply that it was inhabited as early as 6,000 BC. The Caddo used it as a winter hunting ground, and the first Choctaws arrived in the 1830s, driven by the forced relocation of other Native American peoples, known as the Trail of Tears. White settlers arrived in the early 20th century, cut down the area’s virgin forests, and created moonlight, a major prohibition. they named their colony Hochathe city, thinking that it had never been officially incorporated.
By 1960, Hochatown’s population had dwindled to less than a hundred, and the Army Corps of Engineers flooded the land to build a dam. Old Hochatown, as it is now known, lies beneath Broken Bow Lake. The remaining citizens were moved to higher grounds, and over the next few years, Hochatown lost its post office, zip code, and position on the map.
In 2015, Ms. Jordan, a volunteer mayor as dynamic as her city, helped lead the onboarding efforts. Like almost everyone else in Hochatown, the 61-year-old, who will retire next month as a professor at the University of Texas Permian. Basin also owns a cabin and owns 3 rental properties.
With the City of Hochathe’s heavy tax revenues at stake, conflicting parties soon emerged over its incorporation. The town of Broken Bow, nine miles to the south, annexed part of the town to itself. The city of Hochathe has taken legal action and reclaimed the area. , however, relations between neighbours remain cold.
“We were just looking to help them succeed,” said Vickie Patterson, Broken Bow’s city manager, who added that it was part of an effort to bring traffic lighting fixtures to the area. The citizens of Hochatown have also sued the county for lodging taxes. . They lost the case and they’re fine with the decision.
The last few years have been a frenzy of shopping and construction. “The Covid challenge is either a blessing or a curse,” said Todd McDaniel, a builder who also manages 60 rental properties, as he went to the sardine shop to lure a raccoon that had lodged on the roof of a shack. When it first happened, we were paying tens of thousands of dollars to customers. Then someone flipped the switch and we were operating at 95% occupancy. »
Land costs doubled and cabins, many of which were built quickly, with no assembly building codes, were continually returned. One home, called “California Dreaming,” sold in 2020 for $590,000 and then in 2021 for $1. 1 million.
With the arrival of other people and profits, chaos ensued. “It’s the Wild West,” said Jason Ward, a Hochatown farmworker. “When there’s so much money at stake, things go crazy. “
One story, that of a part-time transplant from Dallas, shows just how crazy he is. In 2018, Kelli Haus was a single mother with two young children. He emptied his bank account and used his savings to buy a rented cabin in Hochatown. He temporarily sold it for double what he had paid and reinvested his profits, getting more homes in the process. Over time, Mrs. Haus became a real estate agent.
At the height of the market, Mrs. Haus’s symptoms spread throughout the city, and for some, she came here to personify the adjustments that were taking place. His symptoms were degraded with mustaches and devil’s horns; He had bullet holes in his forehead.
But Mrs. Haus is not intimidated. Instead, she enlarged one of the defaced signs and pasted it on a sign heading toward the city. “When other people saw it, my phone blew up with fans,” she said. “Everything backfired. “
Harassment like the one Ms. Haus faces, as well as court cases over noise, property damage, and theft, have not become unusual in Hochatown. Still, without a police force, citizens rely on the Highway Patrol, park rangers and the McCurtain County Sheriff’s Department. , which made headlines earlier this year when its sheriff got caught up in an audiotape that talked about the murders of bloodhounds and Black people.
The city has a former member of parliament who founded his own security company. Jason Ricketts, whose bodybuilding body hides a tender heart, alleviates loud parties and other disturbances and is “our own Barney Fife,” Ms. Jordan said, referring to the fictional assistant on “The Andy Griffith Show. ”
In the spring, the gold rush began to subside. Occupancy rates fell to 55 per cent in March and 40 per cent in August. Symptoms of “selling” were posted, and listings that once sold out in a matter of hours months. The “California Dreaming” cabin, whose price had doubled in a single year, was put back on the market in 2022 for $1. 299 billion. After repeated price cuts, he’s now only asking for $899,000.
Winegar was caught up in the crisis. He bought land in late 2021, when the bubble was at its peak, but by the time he finished building and was able to rent out his cabin, the bubble had burst. What I expected to be a money factory turned out to be a quick loser.
“We skimped and saved to buy land and get a loan for the structure,” said Winegar, who lives in Dallas with his wife and three children. He built the space with the dream of recreating the memories for his family. He had to stay at his uncle’s cabin in Idaho as a child. “At the time, the numbers were such that it looked like I surely couldn’t lose. “
This summer, Winegar was laid off from a job in the generation sector. He now works nights at Costco in Dallas and opens a DIY business in Hochatown, despite his lack of experience.
On a recent morning, Winegar was exhausted after driving from his night shift to Hochatown. His only meal for the next two days was carrots and cans of tuna, and he was busy watching YouTube to figure out how to run a tankless water heater.
Mrs. Jordan is Mr. Winegar’s friend, and sympathizes with his misfortune. But as mayor, she welcomes the decline in real estate. “It’s a blessing,” he said, “to catch our breath and catch up. “
In its latest earnings announcement, Airbnb said it expects much of its expansion over the next year to come from overseas rentals, specifically in Latin America and the Asia-Pacific market. And he’s also launched several projects that he believes will help hosts remain competitive in their markets.
A spokesperson for the company said it tries to balance the needs of hosts and guests, and that a developing resource is helping to ensure customers have low stay options and prices.
“I hope I don’t have to sell the cabin,” sighed M. Winegar. ” We still have a little bit of savings. If Airbnb could promote our directory a little bit more, maybe even reduce their rates, I think. “would be to do it.
Julie Satow is the honoree for “The Plaza: The Secret Life of America’s Most Famous Hotel” and the upcoming “When Women Ran Fifth Avenue: Glamour and Power at the Dawn of American Fashion,” which will be released in June 2024 until Double Day.
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