A small town alongside the Missouri River, Hermann became a popular tourist destination by throwing annual festivals highlighting its German roots.
One of its biggest draws is its Oktoberfest. Every October weekend, visitors celebrate the town’s German roots by listening to live music, eating bratwurst and participating in events such as lederhosen competitions.
Tourism is important to Hermann’s economy. Even though the 2020 census put the town’s population at just more than 2,100, the area has more than 240 listings on online rental marketplaces such as Airbnb and Vrbo.
Many residents say all those guest houses have increased the cost of housing and discouraged families from moving in. Local leaders have responded by limiting the development of new bed and breakfasts and by getting new apartments built, but each solution has drawbacks.
74-year-old Vera Weissenbach immigrated to Hermann from Germany when she was 19. She said she saw the guest houses change the housing landscape in real time.
“People started coming in, buying up all the homes and made bed and breakfasts out of them, and they pretty well shoved all the rest of the people out,” Weissenbach said. “Not intentionally, but it happened that way.”
Hermann’s population decreased by about 18% from 2000 to 2020, according to U.S. Census data. School enrollment dropped about 17% in the same time, according to the National Center for Education Statistics.
Earlier this year, Hermann’s Board of Aldermen tried to address the population decline and high housing costs by imposing a permanent ban on new guest houses in residential areas of the city. Bed and breakfasts are still allowed in these areas, but only if they're add-ons to existing homes.
University of Southern California business professor Davide Proserpio studies the short-term rental economy and said housing and rent costs are higher in areas with lots of listings, partly because guest houses develop on properties that would have been long-term rentals.
“I think it will be good to look at the data and see whether these are just perceptions or if this is reality,” Proserpio said. “Because again, house prices are going up, whether there is Airbnb or not.”
Indeed, other factors can increase prices. Not building enough new housing, for example, can make the market more competitive and drive up costs.
That’s why, for a tourist-facing town such as Hermann, Proserpio said instating limits or bans could backfire by slowing construction of new buildings and cutting off a valuable source of city tax revenue.
Hermann leaders are also trying to address the housing issue by getting a new apartment complex built on the northwest side of town. Hermann Director of Economic Development and Tourism Tammy Bruckerhoff said city staff are always looking for companies to build more housing.
“It's just been a really tough challenge with the interest rates that have gone up so much and also with the price of construction that has really increased a lot since COVID,” Bruckerhoff said.
But the proposed apartment complex could have a similar effect as the short-term rentals. It would be built on the site of a mobile home community where Weissenbach has lived since 1995. Weissenbach is the only resident who hasn’t left and said the apartment developers have given her until January to vacate before they’ll take her to court.
“I’m going to be needing help because I have nowhere to go,” Weissenbach said. “Nobody wants trailer court — trailers in the trailer courts anymore. Everybody's got ordinances against them. So I have nowhere to go, and I’ll probably have to live out of my car.”
Bruckerhoff said the city has tried to help Weissenbach find a new location for her trailer before construction moves further.
