As the Rich Ride In, Many Are Priced Out of Homes on the Range
Thursday, April 13, 2006
JACKSON, Wyo. -- In an era when the rich are the only income group getting richer, ever-larger waves of wealth are spilling in from the coasts and swamping the resort valleys of the Rocky Mountain West.
The rich are coming not just to ski, mountain-bike or build imposing second homes. They are coming to stay -- or, at the very least, secure permanent resident status for tax purposes. The moneyed invasion is driving population growth rates that are among the highest in the nation.
From Aspen to Jackson to Squaw Valley, high-net-worth individuals fill sleek restaurants night after night to eat $30 plates of freshly flown-in fish. They donate generously for the arts, wildlife conservation, and preserving forest and farmland near their custom-built homes.
And with millions of well-to-do baby boomers nearing retirement, the Rocky Mountain resort forecast is for years upon years of the incoming rich -- seeking big sky, big houses and the comfort of others who can afford to live large.
"The herd instinct is as strong with multimillionaires as it is with any two- or four-legged animal," said Bob Graham, 69, a real estate agent here for three decades.
Graham has marveled -- and profited -- as this well-heeled year-round herd has grown thicker in the past 10 years. "It has been a wonderful blessing," he said.
Not everyone feels that way.
The rich have collectively inflated real estate to prices that are far beyond the means of those who serve them supper, take their blood pressure or police their gated subdivisions. The service workers -- professionals and blue-collar alike -- tend to live in adjacent valleys and commute.
There is simmering resentment of the rich. Before a tour of pricey houses here last year, vandals stole 40 signs and changed the name of the tour from "Parade of Homes" to "Parade of Wealth."
For seven consecutive years, Bloomberg's Wealth Manager has declared Wyoming the best state for the tax-averse rich to establish residency. Wyoming has no income tax, and most other taxes are either low or absent.
Along with everyone else in the state, the rich are spared the burden of taxation because of soaring receipts from taxes on oil and natural gas extraction. (Other states in the Rocky Mountain West have income taxes, but the rates are low compared with those on the coasts.) A household making $500,000 a year would have paid $53,921 in local taxes in 2004 in the District of Columbia but just $6,809 in Wyoming, according to Wealth Manager.
"Your accountant will tell you that if you move to Wyoming, the house will build itself," said Angus MacLean Thuermer Jr., co-editor of the Jackson Hole News & Guide.