Park City has long been the most expensive housing market in Utah, but this popular mountain resort town has gotten even pricer as demand for vacation and rental homes is higher than ever before. While some have argued that second homes are to blame for the soaring home prices, Pacaso, a real estate company that recently set up headquarters in Park City, believes second homeownership through their platform may actually improve the local economy.
Pacaso makes it possible for prospective second homeowners to access their dream vacation homes through co-ownership. The Pacaso team buys luxury properties in the Park City area and divides the homes into eight different shares. With up to eight owners sharing the property, the vacation homes are rarely empty, and the rotating owner-occupants typically bring in eight times the revenue for the local tourist economy.
“We have very high standards and only look at properties at least two to three times the median home value in all markets in which we operate. Park City’s median home value is about $1.4 million and Pacaso’s average purchase price in Park City is about $5.2 million,” says Eric St. Cashen, Pacaso’s director of sales.
With price tags in the multi-millions, these properties aren’t a part of Park City’s affordable housing supply. And by taking multiple second home buyers off the market in Park City and having them share one space, the more affordable homes are left available for workers and full-time residents.
“Since we consolidate up to eight co-owners into one high-end home, it lessens competition on the lower-priced homes that local, full-time residents would want,” says Cashen.
Not only does the program keep affordable homes available, but it allows those in the market for a second home to opt for something more luxurious than they may have been able to afford before. Since each property has eight co-owners, those who invest are getting larger, more upscale homes than they would have if they bought alone.
“We look for premium amenities. Our homes are large, but not palatial, and turnkey or new construction,” says Cashen. “In Park City, these premium amenities include things like hot tubs, easy access to ski slopes, and good spaces to host and entertain family and friends. Once the home is secured, we use our in-house professional interior designer to outfit the home with high-end furnishings.”
Other real estate investors like to buy multiple properties in tourist destinations to generate rental income, but Pacaso is different because the homes are for personal use, rather than investments. Additionally, a strict code of conduct means that all owners must sign ensures that investors won’t be buying the Pacaso shares.
While Pacaso homes generally gain 10-11 percent in value over time, because the properties are not able to generate rental income, Cashen says that using the home is the main benefit for investors. “Our mission is to enrich lives by allowing the owners we serve to enjoy their home and all that they can experience in it, as well as the community.”
“Park City was the second destination in which Pacaso started operating due to the demand we saw from our research, how easy it is to get to and because it offers year-round activities. It is a beautiful place to ski, hike, and enjoy the outdoors,” says Cashen of Pacaso’s decision to expand to Park City despite local pushback on the ownership of second homes.
But while those against second homes called for more regulation, a higher tax, or even a complete ban on second home ownership, Pacaso takes a different approach by splitting up the shares of homes, creating more supply in the market. A method that, according to this 2019 study, may be more effective at controlling affordability than banning second homes.
“Co-owning a home is a more responsible way to own a second home as it better utilizes existing inventory, and our homes don’t sit empty for about 10 months a year like most wholly-owned second homes do,” Cashen says. “Our homes also are utilized almost 90 percent of the year. This means co-owners are patronizing and supporting local businesses like restaurants, grocery stores, and retail shops.”
Over one-third of jobs in Summit County are a part of the hospitality and leisure industry. Ski instructors, housekeeping services, restaurants, and bars thrive when vacation homes are full. With eight different owners, Pacaso homes are able to generate eight times the revenue for the local economy compared to vacation homes with singular, mostly absent owners.
Cashen believes local members of the Park City community should be excited about the addition of Pacaso to the community.
“The owners we serve in Park City are almost exclusively families from really diverse backgrounds. Spending time with their families is a big driver in why they want a second home in Park City to build roots and memories with their children,” Cashen says. “Our mission is to enrich lives, so we want to be a partner and advocate for responsible second-home ownership and create an environment where our owners can be long-lasting members and contributors to the Park City community.”