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Real Estate News

They’re surrounded by empty homes, but they can’t find a single place to live


A Lake Tahoe housing shortage is leaving more residents in dire straits, some of them doubling up with roommates, and others couch surfing or staying in dilapidated, low-rent motels. Still others have given up on basin living, and instead commute daily from distant communities.

Ironically, though, Tahoe has plenty of houses. They just sit vacant most of the year.

More than half of Tahoe homes are vacation residences owned by people who live elsewhere and who come to the alpine resort only for short visits on winter weekends and summer holidays. Some local leaders now say Tahoe needs to find ways to pull those homes back into the mix.

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“We don’t need to build more, we just need to re-purpose the ones we have better,” said Heidi Hill-Drum of the Tahoe Prosperity Center, a coalition working on the housing issue.

Placer County leaders recently began exploring the possibility of offering absentee owners cash incentives or reduced fees to rent their residences on a long-term basis to local workers. The idea needs fleshing out, said Placer County official Jennifer Merchant, and will run up against the popular Airbnb trend of second-home owners renting housing to tourists for weekend or weeklong stays.

Placer County covers the Tahoe’s north and west shore, the Squaw Valley and Alpine Meadows areas, and the Truckee region.

“We think the idea has legs,” Placer’s Merchant said. “We have the housing. We want to reach out to homeowners, and ask them what would make you rent. Are people interested in incentives?”

Merchant said officials will bring their findings and possibly a program proposal to the Placer County Board of Supervisors later this year. She said it’s uncertain where funds would come from if the county were to offer cash incentives. The county does have hotel and home rental taxes and various fee revenues it can look at.

The Tahoe basin has 50,000-plus residents, many of them everyday workers, such as teachers, construction workers, waiters, bartenders, ski resort employees and hotel workers whose incomes are not keeping up with rising housing costs, basin planners say. Tahoe Regional Planning Agency officials say the median household income for the basin’s workforce is in the mid-$20,000 annual range.

In Tahoe City, a mid-market area, median rents for two-bedroom rentals have risen from $1,250 five years ago to $1,900 this year, according to Zillow. At the same time, median home prices in Tahoe City increased from $248,000 to $349,000.

Nearby, in more upscale Incline Village, median rents have hit $3,200 and the median home sales price is $746,000.

Nicole Martin, who runs the Kindred Art and Folk Institute in downtown Truckee, suddenly found herself caught in the housing crunch this summer. She’s been living for seven years in a Truckee house, paying below-market $1,550 monthly rent. The house was recently sold, forcing her to move. The few similar houses available in town are renting for $2,400 to $3,200, she said.

“It’s kind of a shell shock,” she said. “We will be homeless at the end of September.” She’s thinking about looking for a roommate, but says it is disappointing at her age to have to do that. “That’s something you do in college or your twenties, not when you are an adult and mother to a child in middle school.”

In nearby El Dorado County, which includes the city of South Lake Tahoe, officials are talking about tweaking the basin’s restrictive rules on new housing. TRPA, which is the basin’s joint planning authority, has doled out only 120 new house approvals in 2017 for the basin. The limitations are based on a longstanding regional agreement to manage growth in ways that improve lake clarity and the natural environment.

South shore planners are also talking about ways to encourage developers to replace several thousand old and dilapidated motel rooms with modern and affordable workforce housing, El Dorado County Supervisor Sue Novasel said.

Christine Grissom, who moved from the Bay Area recently to take a bus dispatcher job in South Lake Tahoe, is living with her husband and daughter in one of those cheap motels – at $39 a night – while they look for an affordable long-term rental. Grissom said she feels pressure to get a place before winter arrives, when owners of second homes will look to rent at higher rates for weekends or entire weeks to tourists.

“Tahoe needs tourists, but workers like me make Tahoe work,” Grissom said. “We need to be here, too.”

Grissom’s fears about losing out to short-term rentals are well-founded, county officials say. Thousands of owners of second homes in Tahoe and Truckee rent those houses out to tourists for weekend and week-long stays on various internet platforms, including VRBO and Airbnb.

In Placer County alone, 6,000 homes have been used as short-term rentals at some point by their owners, according to county estimates. Some of those houses may have been rented in the past on a longer-term basis to seasonal workers and permanent employees, county officials said.

The reason is economic. Homeowner Cynthia Dalton pointed out that her family has rented out their Zephyr Cove house in the past for three-night minimums at $750 and up a night, which brought in more income than if they had tied it up with a longer-term renter who might have paid $2,500 to $3,500 per month.

She is among those who say it may be hard for counties to offer sufficient cash inducements.

“I highly doubt the county incentives/subsidies would make up that loss,” said Dalton, whose family has since moved to Tahoe and turned their vacation home into their main residence. She points out that homeowners who rent their vacation homes on a long-term basis won’t be able to use the homes themselves anymore as a vacation or weekend retreat.

Critics in the environmental community blame government growth policies for some of the problem. Placer County recently approved a major expansion at Squaw Valley that will bring more visitors to Tahoe and more jobs, but the county is requiring the Squaw developers to provide less than half the workforce housing likely needed.

Tom Mooers of Sierra Watch environmental group has challenged the Squaw expansion in court, arguing the public deserves more information about the implication of the development, including on the housing impacts.

“If you are in a hole, stop digging,” Mooers said. “The obvious outcome is this high-end resort development would make the affordable housing crisis much worse.”

Placer County officials, meanwhile, say they are making efforts on other fronts to improve housing. That includes working with TRPA earlier this year to allow Tahoe homeowners to build secondary residences, also known as granny flats, on properties of 1 acre or smaller.

The hope is that some vacation homeowners who are unwilling to rent out their homes may be interested in building a smaller living unit on site to rent out. Tahoe planners report a handful of owners have inquired so far about building units on their properties.

Placer officials say they are cracking down as well on another weekend rental-related issue. The county charges a 10 percent transient occupancy tax on homeowners on any rental of 30 days or less, but a county review showed that most homeowners who rent out their houses short-term have not been paying that tax. The county has begun contacting those homeowners to inform them the tax is due.

That should give the county more money to invest in housing programs, Placer Supervisor Jennifer Montgomery said. It also could encourage some homeowners to consider longer-term rentals, which do not require the 10 percent tax payment.

Reporter Brad Branan contributed to this report. Tony Bizjak: 916-321-1059, @TonyBizjak

This story was originally published August 18, 2017 3:55 AM.

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