EUREKA SPRINGS -- A dearth of affordable housing in Eureka Springs is causing a shortage of service-sector employees, say some restaurant owners in the tourist town.
Kelli Zumwalt, co-owner of K.J.'s Caribe restaurant, said she didn't know if she'd be able to open this season because she was having trouble finding workers. Many Eureka Springs restaurants close for the winter.
"It's a serious deal," she said. "Affordable housing is the No. 1 issue here. We don't have affordable housing."
Zumwalt was able to find the workers she needed to open the restaurant this spring, but she's concerned about the long-term implications.
Zumwalt said it's hard for restaurant workers to get by in the city of 2,073 residents, even though Eureka Springs has about 75 restaurants.
"You have to have two jobs," she said. "You have to have a roommate. You can't make it on your own."
Apartments in downtown Eureka Springs may be advertised at $650 a month, but by the time a renter pays utilities and parking -- which can cost $200 a month -- the total would be closer to $1,000, said Bobbi Bins, an employee of DeVito's Restaurant downtown.
Nine miles north in Holiday Island, apartments go for about half the cost of downtown Eureka Springs, but many service-sector employees move to Eureka Springs because they want to live in the quirky downtown with artsy neighbors and 19th-century architecture.
"People end up having to live on the outskirts," said Bins. "There's either nothing for rent, nothing in town or nothing affordable."
Bins said she had trouble finding an apartment when she and her partner moved to Eureka Springs in 2013. After six weeks, they found a place that was 20 minutes from downtown and eight-tenths of a mile out of the range of AT&T's Internet service.
Last year, Bins spent six months commuting from Fayetteville before finding an affordable rent-controlled apartment in Eureka Springs.
Bins said the situation reminds her of when she was working in Bar Harbor, Maine, another tourist town.
Charles Cross, president and CEO of Cornerstone Bank in Eureka Springs, said the cost to buy and maintain buildings downtown means rents have to be at a certain level to make them profitable.
"It's hard to buy a building downtown and have the space be affordable for the waiters and waitresses of Eureka Springs," said Cross. "There's a disconnect there. That's the challenge. The real affordable housing is not going to be in downtown Eureka Springs on Spring and Main streets."
Cross said his family partnership owns about 10 apartments in downtown Eureka Springs. He said the rents vary from $400 to $750 a month and the vast majority include parking for that cost.
"It's not like an Aspen or a Jackson Hole where the affordability is way out of whack and people have to drive from 30 miles out of town," said Cross. "We really try to keep ours fairly affordable."
But he seldom has vacancies.
"Demand is pretty solid," said Cross.
Karen Mills, who works at Caribe, moved to Eureka Springs in May from Seattle. She's paying $590 a month for a two-bedroom apartment on the outskirts of Eureka Springs. She said that's cheap compared with Seattle, where a similar apartment 20 minutes out of town would cost $1,500 a month and a one-bedroom loft downtown would be $3,000 a month.
Alderman James DeVito, who owns DeVito's, said he hears about the problem from his employees.
"It is a crisis in my opinion in a service-sector town when you don't have affordable housing," said DeVito. "I've not seen it this bad this late in the season at the established restaurants. I don't want us to be another Aspen where people have to be bused in to work. I think one of the attractive things about Eureka Springs is it's a living, breathing, vibrant city with people that live here."
DeVito said restaurant employees make more than minimum wage in Eureka Springs, but many make most of their money from tips. DeVito said one of his employees, who has worked at the restaurant for 26 years, can make $500 in tips on a good Saturday night. The restaurant's waiters usually tip the cooks, bartenders and sometimes dishwashers.
A recent issue of the weekly Eureka Springs Independent showed no apartments for rent in Eureka Springs and four of the city's restaurants seeking employees.
DeVito said part of the problem is the conversion of rental properties to bed-and-breakfast inns. He said that's "taking inventory" out of the town that could serve as rental property.
DeVito said he will propose a moratorium on new bed-and-breakfast establishments in residential areas at Monday's City Council meeting.
DeVito, who is also on the Eureka Springs City Advertising and Promotion Commission, said tax collections on lodging indicate the market is soft for bed-and-breakfast inns but cabins and cottages are doing very well.
According to records, tax collections for bed-and-breakfast establishments were up 7.8 percent for the first five months of 2016, compared with the first five months of 2015. During the same time period, cabin and cottage collections were up 35.1 percent. Restaurant sales were up 21.7 percent for the first five months of 2016.
Mike Maloney, director of the advertising and promotion commission, blamed the bed-and-breakfast trend on the 1980s television show Newhart, which featured Bob Newhart as a Vermont innkeeper whose biggest worry was dealing with three brothers, two of whom were named Darryl.
"I think a lot of people thought this was a great lifestyle, and for a lot of people it was," said Maloney. "But for a lot of them it was work. You had to own and be able to operate a toilet brush."
Maloney said cottages are basically cabins in town.
DeVito said the city needs more affordable housing, not only for service-sector employees, but also for families.
"We desperately need more young families to live here, for the schools and for the tax base," he said.
Affordable housing is being built in Eureka Springs, just not downtown, said Mayor Robert "Butch" Berry. New houses are under construction on Wall Street and East Mountain Drive, but those would likely be more appropriate for couples or small families, said Berry.
"This is unique," he said. "We haven't had this much new residential construction going on in 10 years."
Berry said the Eureka Christian Health Outreach Clinic plans to build 20 small houses for low-income people just outside the city limits. Berry is the architect for that project.
Metro on 06/26/2016