Saturday, 22 August 2009

How Vail is faring in the recession

For an example of Localism in action, readers may recall I looked across the Atlantic to the small town of Vail in Colorado. With a resident population of about 5,000, it runs all its public services, including a 31-strong police force and free bus service, from its share of just under half of the local 8.4% sales tax (VAT). The other 4.4% goes to Eagle County and Colorado state to pay for shared services such as education.

Vail depends on tourists and visitors for much of its income, so you'd expect in a recession it would be amongst the first places to start hurting. Summer visitors have been down, and winter bookings are down about 7%. The town provides social housing, and the hit on real estate prices has meant a shrinking asset value for the town. The state jobless rate is 7.8%. So just how has Vail reacted?

Well, we'll get Vail's full report at the year end, but it's pretty much the same picture for Colorado as a whole. They haven't borrowed billions in bonds, they haven't raised taxes and they haven't poured more millions into the public sector.

Instead, across Colorado public sector jobs shrunk by 18,000 in July alone as the public sector shed costs. Also in July, 3,000 new construction jobs came on line, as did 2,400 new casino jobs as a law change allowed longer opening hours and bigger prizes.

Now this may mean that Vail has to get by with 25 or 26 police officers instead of 31 for the time being, but with fewer visitors this should have little impact.

It's really not rocket science, is it?

1 comment:

Kim T. said...

As a real estate broker in Vail, yes i've seen the "correction" affect many second home owners, especially those that put their home on the market late '07. Market took a tumble to the tune of 46%+/- less buyers coming to the table. BUT, the thing that remains is the fact that this place is holding its value, and now that value is pretty much back to 03-04 pricing. Inventory levels have remained stable, no flood here. Which is a healthy sign. It's a really good time to explore and buy here. Sellers want to see papers on the table!!