Tahoe Becomes the No. 1 Place of the One Percent

In late December, Zillow, the online real estate site, identified what it called the country’s “most popular place” of 2021, capping off yet another year of housing insanity. The winner, based on listing views, rising home prices and more, was South Lake Tahoe. 

The average Tahoe home listing generated 5,469 views. The region’s average home price has jumped a whopping 35% since 2020, to $875,000. Cities like South Lake Tahoe, which is nestled in the Sierra Nevada, reflect what Zillow calls a nationwide trend: affluent folks able to work remotely during the pandemic moving to areas where they could enjoy “year-round outdoor living.”
 

Co-published by USA Today

 
The same week of Zillow’s triumphant announcement found Cheyenne Purrington, of the Tahoe Coalition for the Homeless, helping a 70-year-old woman move into a South Lake Tahoe motel that the organization had converted, during the pandemic, into a supportive housing complex. As rents skyrocketed, the emaciated woman had landed on the other side of the outdoor living boom, forced to live out of her van for 19 months

“She was sleeping under lots of blankets to keep warm,” Purrington said. “You see people out here who drink just so they can fall asleep, because it’s so cold.” During a recent 24-hour period she received two calls from women — both mothers of young children — who had just lost their housing and didn’t know where to turn. Purrington, who became the director of the coalition in January 2020, a few months before the pandemic began, said that in that time the housing options for low-income households had steadily dried up, with studios that once rented for $650 a month now fetching $1,000.

Housing has never been cheap in Tahoe, but the pandemic has dramatically exacerbated the crisis, driven partly by the influx of Bay Area tech employees seeking to escape the confines of COVID. As wealthy households snap up properties and Zoom in from lakeside decks, the exodus of more modest wage earners — the people who provide the essential services and staff the tourism industry upon which Tahoe depends — has gathered speed. Today, more than half of the people who work in the region live outside the Tahoe Basin. Those lucky enough to remain are often just barely hanging on, with nearly two-thirds of households not earning enough to cover basic living expenses for a family of four.

“We have such a crisis, we’re possibly facing a local economic collapse,” said Tara Zuardo, the project director of the Mountain Housing Council of Tahoe Truckee, whose organization proclaimed a housing state of emergency last October.

Decades ago, the novelist Wallace Stegner described California as “America only more so.” The Golden State continues to be a region of extremes and imbalance, a place of massive wealth and grinding poverty, of breathtaking beauty amid mega-droughts and runaway wildfires. In Tahoe, those extremes have never been more on display; to borrow from Stegner, Tahoe has become California, only more so. 
 

“Once wildfires ripped through an area, it used to make housing prices go down. Well, that’s no longer the case.”

~ Tara Zuardo, Mountain Housing Council of Tahoe Truckee

 
The worsening housing crisis in Tahoe has not gone unnoticed, garnering headlines like “Wealthy Tech Crowd Invading Tahoe” and “When the Techies Took Over Tahoe.” The sort of feeding frenzy that has come to characterize the Bay Area’s housing market — huge cash offers, sight unseen — was impossible to miss. Even last year’s Caldor Fire, which for several frightful days threatened to invade South Lake Tahoe, hasn’t slowed the demand. “Once wildfires ripped through an area, it used to make housing prices go down,” said Zuardo. “Well, that’s no longer the case.”

According to the San Francisco Chronicle, in a single year the number of San Francisco transplants to Truckee increased more than tenfold, while the Sacramento Bee reported that South Lake Tahoe was second only to Truckee in the percentage of newcomers to the region. Those new neighbors had something in common: According to real estate brokerage Atlasa, in 2020 about 30% of new-home buyers worked at software companies, with Google, Apple and Facebook leading the way. (The Facebook employees were following in the footsteps of their CEO, Mark Zuckerberg, who purchased two adjacent estates on Tahoe’s West Shore in 2018 for $59 million.)

Beyond the headlines, the quieter reality for many local workers has become a nagging anxiety about the future. “People are in a state of constantly feeling overwhelmed,” said Emily Vitas, who directs the Truckee Tahoe Workforce Housing Agency, a partnership of seven public entities — among them the local hospital and school district — trying to find ways to house their essential workforce. “People lose their housing and enter a mad rush to find something else. I know people who have lived in 10 places in the last five years.” 

Although the public sector workers have a median income of $110,000, that’s not always enough to shield them from homelessness: A few months ago, Vitas heard from a panicked worker who had lost her housing and was reaching out from a motel.

As the situation has deteriorated, the urgency to respond has grown. In 2018, South Lake Tahoe residents narrowly approved a ballot measure to ban short-term vacation rentals in residential neighborhoods, and last fall Truckee instituted a moratorium on new vacation rentals. Thus far, it’s not clear the ban in South Lake Tahoe has helped, according to new councilmember John Friedrich, who campaigned on the need for more affordable housing. “Many of those vacation rentals have been purchased as second homes, so it hasn’t necessarily translated into more rental housing or owner-occupied housing,” he said.

If banning short-term rentals doesn’t open up housing for local workers, Friedrich did hold out some hope for a new program that, ironically, has its origin story in Airbnb. In 2018, Colin and Kai Frolich left San Francisco for Truckee to housesit for a friend. They decided they wanted to stay and began their search for housing. Colin had recently left his job as the head of product marketing for Airbnb and thought he understood the dynamics of vacation rentals in a tourist town. “But I didn’t acutely feel it until we tried to look for housing ourselves,” he said.

He and his wife knew that if housing was hard for them to come by, it would be next to impossible for a schoolteacher or nurse. Digging deeper, they studied the housing market and learned that the majority of homes in North Lake Tahoe sit empty for most of the year. There was an available housing supply to help ease the crunch. It was just going unused.
 

“We’re not trying to bring more people to the region — we’re trying to house people already here.”

~ Emily Vitas, Truckee Tahoe Workforce Housing Agency

 
With financial help from the Tahoe Truckee Community Foundation, in 2019 they launched Landing Locals, what Colin describes in part as being “an antidote to Airbnb.” The company reaches out to second homeowners to gauge interest in renting to the local workforce and has developed partnerships with the cities of Truckee and, in the last month, South Lake Tahoe, which provides grants of up to $10,000 for owners who house local workers who meet income requirements. Thus far, they have housed 350 workers in the Truckee/North Tahoe region, and have become the go-to source for groups like the Truckee Tahoe Workforce Housing Agency. 

Though the numbers are modest, and the housing isn’t usually accessible for low-income residents — a one-bedroom furnished apartment on the Truckee River is listed for $2,100 a month on its site — there is hope that the model could unlock many more desperately needed units for the region’s struggling middle class. Last year, the Mountain Housing Council reported that about 9,500 housing units were needed for locally employed workers who were either forced to commute from outside the Basin or lived in overcrowded, rent-burdened and physically distressed properties (or who were simply homeless). “We actually have more than double the number of vacant second homes than housing units that we need,” said Zuardo of the Mountain Housing Council. 

Convincing Tahoe’s second homeowners to open their doors to local workers could be one part of the solution, though the region also needs to build new affordable housing. There has been some progress to celebrate. In October, Truckee opened 288 new affordable units, including homes set aside for the local workforce, while South Lake Tahoe plans to break ground on a 248-unit affordable housing complex on state-owned land in 2023. But the need for additional housing remains, especially denser units that are within population cores and less vulnerable to wildfires. New developments, however, often generate resistance.

“A lot of community members feel strongly that we don’t have the infrastructure to bring more people to the region,” said Vitas of the Truckee Tahoe Workforce Housing Agency. “But we’re not trying to bring more people to the region — we’re trying to house the people already here who have insufficient housing.” To date, the agency has identified two sites for potential workforce housing, though Vitas declined to identify their locations. (At least one workforce housing development has been shot down under intense public pressure.)

“South Lake Tahoe suffers from conservative NIMBYism,” said Purrington of the Homeless Coalition. With state funds, she was able to convert three motels into supportive housing complexes during the pandemic, an effort that has essentially ended homelessness among seniors and veterans in the city. While the housing is now generally praised, Purrington said that before it was approved, individuals followed her around town, trying to figure out which properties she was seeking to convert into housing so they could mount a campaign to stop her.

“Too many people follow the myth that if you build it, they will come,” said Purrington about housing for low-income residents. “They are already here.” She noted that 40% of her organization’s clients were employed, and the rest were generally retired or disabled, with many bouncing from one unstable option to another: camping in the woods, sleeping in their car, splurging for a rare warm night at a motel. “We have a low-wage workforce of people serving the recreational needs of tourists. Those people need to be housed.”

 
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