Publisher’s note: This is one in a series of stories about affordable housing in the Lake Tahoe-Truckee region. All articles may be accessed via the home page under Special Projects, 2017 Affordable Housing.

By Kathryn Reed

Tackling the South Shore housing crisis from as many fronts as possible is the goal of Progress for Tahoe.

Members of this South Lake Tahoe grass roots group recognize no one solution will solve the problem, but instead are entertaining as many ideas as possible. But they also want to be action oriented. For now, they are still in research mode.

At a meeting last week of the housing subgroup, Bill Roby with the El Dorado Community Foundation talked about his desire to create a land trust that would assess every property that is sold in South Lake Tahoe 3 percent to fund the land trust.

He pointed to other locales on both sides of the United States with similar programs.

Roby’s analysis shows that a 3 percent surcharge to every property sold in the city would bring in between $5 million and $7 million a year. That money could be used to buy old hotels and turn them into deed restricted apartments.

Voters would have to approve having the equity in their home be spent on paying for someone else to have a place to live instead of being able to take what is rightfully theirs. Then there would be the issue if someone is upside down on a property; they’d be losing even more. Roby is taking his idea to more than a dozen groups in the next few weeks. He was asked to come back to the Progress for Tahoe group to report in what others think of the idea.

El Dorado County Supervisor Sue Novasel wondered if taxing only higher end properties would be better so those who are in affordable housing would not be punished.

Doug Williams, who has worked in the mortgage industry, said sellers will essentially pass this on to buyers via a higher price.

Michael Ward, the consultant working with Novasel’s housing task force that is separate from this group, said land trusts work. But he worries an assessment like what Roby is proposing would be a punishment for owners.

“It could crush some purchase for locals,” Williams warned of the assessment.

David Orr with Tahoe Mountain Lab brought up the idea of a vacancy tax that would be applied to second homeowners. His calculations are this could generate about $20 million a year with about a 1 percent tax.

However, California’s Proposition 13 would probably now allow for a vacancy tax.

This group has not clearly defined what affordable housing means to the members. They interchanged affordable and work force housing. Technically, there is a legal definition to affordable housing that involves income levels.

An issue throughout the basin is that there will always be limited supply because there is only so much land that can be developed.

Novasel said this is why area plans, like the one in Meyers that is yet to be completed, should have regulations that allow for higher density. This would help developers be able to build affordable housing.

Some members of the group will be talking to city staff this week to find out what happened to the silent second mortgage program. Others want to address the possibility of neighborhood zones for vacation home rentals.

Troy Mathews, who is on the Lake Tahoe Unified School District board, wants land the district owns to be developed for teacher housing. Students could be working in a vocational setting to learn a trade as the housing is constructed. The problem is the district has limited developable land.

While getting rid of the rundown motels that are labeled single room occupancy or SRO is desirable, it was pointed out that they are profitable for owners. People living there don’t have the means for first and last months’ rent, plus a deposit so they stay in this SROs.

The Tahoe Regional Planning Agency’s commodity regulations is another barrier – for developers and getting rid of SROs. Instead of having a truly free marketplace TRPA has put a value on each hotel room, every residential unit and all commercial floor area – and then has decided how many or much of each is available. Changes to the bi-state regulatory agency’s rules are at least a couple years away, and even then there is no guarantee the next incarnation will be transformative.

Publisher’s note: This is one in a series of stories about affordable housing in the Lake Tahoe-Truckee region. All articles may be accessed via the home page under Special Projects, 2017 Affordable Housing.

By Joann Eisenbrandt

Reviewing South Lake Tahoe’s housing elements chronologically is like taking a close-up look at the city in a mirror every few years. Sometimes, the changes are positive, other times, not so much. As the city has aged, some wrinkles have just gotten deeper and deeper. One of the most prominent of these is the continued inability of low- and middle-income residents to find quality, affordable housing in the same location where they work.

As far back as 1988, the affordable housing shortfall for the city’s lowest wage earners was already evident. The 1988 housing element was an update of its 1980 predecessor. It found that due to constraints outside the city’s control, “… there has not been much progress toward solving the housing problems which exist in the city.” It called the housing supply situation “critical”—a term still being used to describe it in 2017.

The issues it identified are the same ones that subsequent housing elements have focused on. Of the city’s 13,891 housing units, only 9,385 were available to permanent residents. City planners noted that, “More and more homeowners are converting their homes into vacation rentals because of the profit gain involved. This process is fast reducing potential rental stock for local permanent residents.” In 1987, there were approximately 1,028 registered vacation rentals within the City of South Lake Tahoe. This was a 37 percent increase over the previous five years.

The condition of the city’s housing stock was declining. Over half of the city’s housing units were more than 20 years old. Rents and home prices were rising. “A serious overpayment situation (in relation to income) exists among renter and owner households,” the document stated. Impacts were greatest on the elderly, the unemployed and “low-wage casino and service employees.” “Overpayment” was defined as housing that exceeded 25 percent of total income.

Only two subsidized housing projects existed, Chateau Bijou and Sierra Gardens, but the demand for more was already clearly there. Both had a zero vacancy rate and a waiting period of six to eight months. Sixty-one percent of city residents rented rather than owned. The city housed many residents who worked across the state line. Casinos were expanding, and, “This situation has increased the burden on the Nevada counties to bear their fair share of housing for the employees which the gaming industry produces.”

Redevelopment was just in its formative stages. It had its own affordable housing requirements and was expected to help with the affordable housing issue. However, the lawsuits over the TRPA Regional Plan had not yet been resolved and the sewer plant was at capacity. There would be no more residential allocations from TRPA until it was expanded.

The housing element looked to the Renaissance 90 Committee, a public/private city-directed partnership, to provide updated information on city issues, including affordable housing.  It was just one of many studies conducted by the city, hired consultants or community groups dealing with the affordable housing issue over the years.

Where the rubber hits the road

In their 2012 Housing Element Update Guidance document, the California Department of Housing and Community Development (HCD), says, “An effective housing element provides the necessary conditions to support the development and the preservation of an adequate supply of housing, including housing affordable to seniors, families and workers.”

Kevin Fabino has been the city’s Development Services Director since May 2016. He told Lake Tahoe News, “I would really caution the community about using the housing element as a document to base future housing decisions on. It is a requirement of law. It doesn’t really address what’s going on in our community.” He adds, “The purpose of the housing element is to identify what the need is, and that comes from the Sacramento Area Council of Governments. That’s not the city’s perception of what the real need may be. The housing element makes that very clear. It’s our obligation to show that we can fulfill that obligation. But there are really two things going on: what the housing element requires and what’s really going on in our world.”

Fabino calls the Regional Housing Needs Allocation numbers that the Sacramento Area Council of Governments gets from the state, “an exercise in theory, not practicality.” He points to the fact that in the 2008 housing element, the city was required to provide 18 housing units dispersed between very low-, extremely-low and moderate-income levels. “What was actually produced in that timeframe was 50 units. Did the 50 units provided satisfy the real need in the community? No.” He hopes that in the future there is a, “more articulate conversation about those levels.”

Beyond this, there remain the constraints to the construction or rehabilitation of affordable housing outside the city’s control. Lake Tahoe News asked all five city councilmembers for their views on how well the city has implemented its housing element. Only Councilmembers Tom Davis and Wendy David responded.

“We need multi-family homes. We need TRPA to loosen up,” Davis said of the regulatory constraints. “We need to focus on where the need is greatest. We need to know how much land is actually available. We have to look at existing rules and work together with TRPA.” Davis pointed to South Tahoe Public Utility District’s reduction in sewer hook-up costs and suggested that if all the agencies in the basin reduced their fees for a trial four-year period and TRPA “backed away” on land coverage, deed-restricted affordable housing would have enough financial incentives to be attractive to developers. But, he concluded, “It’s going to be a long journey.”

David believes the city has been “active and proactive in several ways regarding housing, noting that 350 affordable housing units have been built. She said the city is addressing substandard housing issues in the motels where many residents live. “Are these the preferred living quarters for our residents?” she asked. “No. But if people are going to live there, we have an obligation to have codes that address their needs.” David is referring to the Single Room Occupancy Ordinance and program. More than 40 motels are currently signed up for the program which sets standards and provides for inspections. She believes the city needs to continue to, “be cognizant of our community, their voices and experiences as well as our housing availability and the impact it has on us socially and economically.”

A legal and philosophical document

California law requires jurisdictions create long-range general plans that look several decades into the future and outline how that particular area is going to develop and change. The housing element is one of the seven mandated parts of such local general plans.

While a housing element is a technical response to the state’s mandate, it is also a vital part of that jurisdiction’s vision of what it is and what it hopes to be in the future. As the California Department of Housing and Community Development (HCD) explains, “While the housing element must address specific state statutory requirements, including the local jurisdictions’ fair share of the regional housing need, it is ultimately a local plan and should reflect the vision and priorities of the community.”

The legal dimension

Cities are required by the state to meet their “fair share” of the projected regional housing need. State housing policy relies on individual jurisdictions to plan effectively to meet this need. HCD reviews housing elements and then certifies them for compliance with state housing regulations.

This share of regional housing is a numerical calculation broken down by income level from very low to above moderate. The Sacramento Area Council of Governments (SACOG) calculates overall housing needs in a six-county region, including South Lake Tahoe, through a detailed statistical process using information from the California Department of Finance and other sources. It then tells each jurisdiction precisely how many housing units for each income level they must plan for over the span of their current housing element. This is called the Regional Housing Needs Allocation (RHNA).

Jurisdictions must update their housing elements periodically to show they are meeting these requirements. Income categories, as defined by state law are: very low income (less than 50 percent of median family income (MFI); low income (50 to 80 percent MFI); moderate income (80 to 120 percent MFI); and above moderate income (above 120 percent MFI). The city must show it can provide sufficient land and zoning capacity to meet projected housing unit needs in each of these income categories.

There is one important distinction. While the city must show it has the land capacity for these units to be built, it is not responsible for their actual construction. South Lake Tahoe’s current housing element was updated in May 2014 and covers the planning period of Jan. 1, 2013, through Oct. 31, 2021. The RHNA, the total number of housing units the city has to plan to accommodate, is 336; 155 are for affordable to moderate-income households and below, including 27 extremely-low income units, 27 very-low income units, 38 low-income units and 63 moderate-income units. Also included are 181 above-moderate income units.

The philosophical side

The statistical side of housing elements shows how actual circumstances “on the ground” are changing, either for the better or for the worse. But there is that other component of housing elements that tells what the city’s housing priorities are and what, in an ideal world, it plans to do to see them become reality.

“Adequate housing is essential to the viability of the community and its residents,” the city’s 1988 housing element affirmed. “Each and every individual, regardless of race, creed, color, sex, age, handicap, or income, should have the opportunity to have access to adequate housing. The city will support and encourage adequate housing in the community.” 

In its September 2003 housing element, the city said it would, “Place high importance on preservation of a local community in South Lake Tahoe rather than just having a resort area of part-time second homes. Provide housing options so that people who work in the community can choose to live here and preserve the ability for children to afford housing in the community where they grow up.”

This ability of residents of low- and moderate-incomes to continue to live in South Lake Tahoe has become an issue of greater and greater concern and discussion as the years have progressed.

The guts of the matter

Each housing element has the same basic parts. It reviews the immediately prior one to see what has worked and what hasn’t— what policies have been implemented and what goals have been reached. It then does a Needs Assessment to get an accurate picture of current housing needs. This includes an inventory of existing housing stock and its condition and the demographics of the city’s residents. It does a resource inventory that shows what land is available for residential construction, what public services are available and what city, state, county and federal housing programs and funding mechanisms exist. These analyses generates table after table of statistics measuring things like the percentage of rental- versus owner-occupied dwellings, the age and ethnic breakdown of residents, median incomes, residents’ employment by industry, median housing sales prices, and the parcel size and distribution of land.

It also looks at the current constraints on the city’s ability to meet its affordable housing numbers. These factors include governmental constraints such as city, county, state or Tahoe Regional Planning Agency land use regulations and fees, as well as non-governmental constraints such as changes in the national economy, the real estate market, prevailing wage scales, and the physical and topographical challenges of Lake Tahoe itself.

A look in the mirror

The November 1992 housing element noted that to reach its goal of providing affordable housing for low- and moderate-income residents, the city had set aside 30 percent of the residential allocations it received from TRPA in 1990 and 1991 for multi-family housing. From these 55 allocations, five moderate-income duplexes and one triplex were constructed but, “to this date there have been no affordable housing projects completed.” It found that since 1975, environmental restrictions had precluded construction of multi-family housing and raised development costs so high that predominantly upper-income housing had been built.

It also found that, “South Lake Tahoe has never had an articulated housing policy.” The failure to meet its affordable housing goals and objectives was partly because the city had no one individual or department dedicated to housing issues. The recent hiring of a housing coordinator was expected to help.

It also contained a blizzard of technical analyses, statistics and tables. The average home price had risen from $87,000 in 1980 to $133,603 in 1992, according to Board of Realtors’ statistics. Thirty-two percent of homeowners and 49 percent of renters were still “overpaying” for housing, now defined as total housing costs over 30 percent of total income. The only subsidized housing in the city was still at Chateau Bijou and Sierra Gardens. Overcrowding in existing units continued to be a problem as was an increase in illegal housing units.

It discussed homelessness and the growing use of low-end motel rooms as affordable housing. This was born from the difference between perceptions of Tahoe as a summer and winter paradise and the realities of living there. Many, it said, “… arrive with guaranteed jobs at the casinos, but are surprised at the high cost of rents compared to the low wages they receive.” Unable to afford upfront rental and utility deposits, they look to motel rooms as an alternative. However, in summer when rents are raised or the focus is on tourists, many are left homeless.

More déjà vu views

The city’s housing element was subsequently updated in 1999, 2003, and 2008. The “philosophical environment” continued to play a big role in how much affordable housing was actually created. The city’s 1999 General Plan, of which the housing element was a part, felt it was important to, “provide the background from which the General Plan was developed.” It did this by beginning with excerpts from TRPA’s 1996 evaluation of the Tahoe basin. “The Tahoe Region was once a place of inestimable beauty … the progress of modern life has diminished the unique values that make the Tahoe region so extraordinary … ironically, the millions who enjoy the area simultaneously endanger it with their very presence.”

The 2003 housing element pointed to the growing trend of local low- and middle-income employees buying homes or renting in the Carson Valley and commuting. This could lead to two things. “The community could become more economically divided, with affluent and working poor residents but a shrinking middle class.”  And the possibility that, “… within 10 years most people who work in South Lake Tahoe will not be living here.”  

At the time of the city’s 2008 housing element update, TRPA was in the process of updating its own Regional Plan. The city was involved in this process and, “continuously voiced the need to balance the housing needs of local residents with the need to protect and improve the clarity of Lake Tahoe.” 

Many workers still resided in older motel rooms; approximately 1,290 housing units were being used as vacation rentals; 62 percent of the estimated 12,000 employees in the Tahoe basin portion of Douglas County lived in South Lake Tahoe. The city was still predominantly white at 75.7 percent, but this was a significant drop from 92.2 percent in 1988. Young families continued to move down the hill. This led to declining school enrollment and the closure of Al Tahoe Elementary and Meyers Elementary schools in 2004. Fifty-seven percent of occupied housing units were rentals.

There were still no homeless shelters in the city. “Most of the current homeless population,” the city found, “is often using motel rooms or camping for their permanent residence.” Governmental services for the homeless in South Lake Tahoe were provided by El Dorado County. The only affordable housing development for seniors was Tahoe Senior Plaza.

The relatively new term, “workforce housing” had emerged. The 2008 housing element defined it as housing affordable to working households who don’t qualify for publicly subsidized housing but also can’t afford market-rate housing in the community.  Middle-income members of the community like police officers, teachers, firefighters and nurses were also experiencing housing issues. The 2007 median home price in South Lake Tahoe was $425,000, but their “affordability” range was closer to $200,000. Many chose commuting from the Carson Valley or beyond.

The housing element today

The 2014 document finds the same “general disparity” between wages and the cost of housing in South Lake Tahoe. Renters occupy 61.1 percent of housing units. Rents continue to increase as does overcrowding in multi-unit rental complexes. South Lake Tahoe continues “to bear the brunt” of housing other jurisdictions’ low-income employees. Only a “limited number” of the area’s largest service-industry employers offer housing or housing assistance to their seasonal or permanent employees.

The housing element includes information from TRPA’s 1997 “Affordable Housing Needs Assessment Final ‘Fair Share’ Report.” It was created to addresses the general assumption that some jurisdictions at the lake housed employees that worked elsewhere. TRPA’s housing sub-element encouraged local governments to, “assume their fair share of the responsibility to provide lower and very low income housing,” but never quantified what that was.

The “Fair Share” report states that, “… each jurisdiction should assume responsibility for all of its low and very low income households created by their employment opportunities.” After data gathering and statistical analysis, it divided jurisdictions’ “fair shares” this way: South Lake Tahoe, 33 percent; Douglas County, 36 percent; El Dorado County, 2 percent; Placer County 11 percent; and Washoe County, 18 percent. It was a suggestion, not a mandate like the state’s RHNA numbers. It recognized that land availability and costs, environmental constraints and the real estate market would affect how realistic its projections were.

“There is a vast need for affordable housing independent of the fair share issue,” it acknowledged. “Unfortunately, at this time, more impediments seem to exist than incentives.” It also recognized that TRPA’s own regulations on land use, coverage, height restrictions and density limits were part of the impediments. “Each of these hinders, to some extent, affordable housing construction due to increased costs of projects.”

The 2014 housing element also discusses the phenomenon of “hot bedding. “This is where people working different shifts live in the same weekly motel room, but at different times of the day. Of motel living, the housing element says, “However, for many motel residents, motel living is a lifestyle choice. These residents may prefer to live in motels because of amenities such as maid service and the ease of paying a single bill each month.”

It notes that TRPA completed the update to its Regional Plan in 2012 and made changes affecting affordable housing by allowing mixed-use development, permitting 70 percent coverage in town and regional centers, and allowing transfer bonuses for residential transfers into town or regional centers. It also allowed jurisdictions to complete area plans to replace existing community plans and plan area statements. Still, the maximum densities allowed leave the city with, “limited sites where development at densities conducive to feasible housing projects can occur.”

Additionally, the dissolution of redevelopment agencies by Gov. Jerry Brown in 2011 eliminated this funding mechanism for future affordable housing and infrastructure development.

An increase in TRPA housing allocations, it finds, “does not necessarily correlate with ensuring that housing will be available to local residents of all income levels to purchase or rent.” It found that the Tahoe basin had, “an ample supply of housing stock—plenty to serve the regional population” but it was being used inefficiently.

One example is the use of motel rooms as affordable housing. “While some people allege that vacation home rentals ‘cut into’ the demand and market for motel rooms … many of the motels providing housing for some area residents would never appeal to the visitor market without substantial rehabilitation/investment.” At their 2014 level of use, vacation rentals were, “not considered by the City Council to be a constraint to providing, maintaining, and improving housing for people of all income levels in South Lake Tahoe.”

The city has recently made changes to its Vacation Rental Ordinance to increase enforcement and prohibit the future use of multi-unit complexes as vacation rentals. It is currently conducting a study to determine the citywide effects of vacation rentals.

The 2014 housing element also found that the mandated RHNA housing numbers are, “not an accurate assessment of the actual needs of the city’s residents by income group.” SACOG’s methodology is based on assumptions true in other jurisdictions, but not true for the Tahoe basin. The allocation, “underestimates the actual needs of city residents.”

The elephant in the housing element

The city’s 2014 housing element explains, “Development is a costly venture in the Lake Tahoe Basin.” There are the city’s own land use regulations and fees, but on top of that is the additional layer of TRPA regulations. The effect of these regulations has been a topic of concern in all the city’s housing elements.

Tom Lotshaw, TRPA spokesman, told Lake Tahoe News, “First, we don’t think it’s a matter of TRPA’s code and regulations being superior or inferior to the local governments and their housing elements. TRPA code is more regionally oriented in comparison to the details offered in the local government code. TRPA code and regulations are trying to facilitate implementation of the local governments’ housing elements, along with meeting TRPA’s many other objectives, such as environmental conservation and restoration and protection of the lake …. “

Lotshaw added that over time TRPA has “created various incentives for affordable and moderate workforce housing to help local governments meet needs identified in their housing elements.” The housing chapter in TRPA’s 2012 Regional Plan urges the use of area plans like the Tahoe Valley Area Plan. He listed some of TRPA’s incentives including no residential allocation needed for affordable housing projects, no-cost bonus units available for multi-family affordable housing projects, and a 25 percent increase in allowable density for multi-family affordable housing projects.

TRPA’s current strategic initiative on development rights will, “look at improving policies associated with development rights and evaluate different alternatives for their ability to support a range of housing opportunities and workforce housing ….”  They are also working on a “welcome mat” initiative to streamline the permitting process. Lotshaw added that many of the available TRPA housing incentives are “only rarely being used. That suggests there are more systematic obstacles affecting the construction of affordable housing at Lake Tahoe.”

The million-dollar question

Fabino commended TRPA for looking at the development rights issue but felt it wasn’t the only thing at play here. When asked by Lake Tahoe News why the affordable housing issue in South Lake Tahoe remains unsolved today, he responded, “That’s the million-dollar question.” Answering it, he believes, requires a realization of the central role the marketplace plays. “When we are talking about creating affordable housing we come back to the same fundamental question that we have to ask when attracting businesses or industry here. It always comes back to the cost. It’s all about driving the market.”

Publisher’s note: This is one in a series of stories about affordable housing in the Lake Tahoe-Truckee region. All articles may be accessed via the home page under Special Projects, 2017 Affordable Housing.

By Linda Fine Conaboy

TRUCKEE – With more and more recreational and business opportunities presenting themselves, the Tahoe-Truckee area has become hard pressed to identify enough affordable residential units to accommodate the rapidly increasing need. The situation is reaching a tipping point.

Enter the Tahoe Truckee Community Foundation, who embarked on a long-term study of the situation, with results becoming available last summer. The report, titled “Truckee North Lake Tahoe Regional Housing Needs Assessment”, contained a comprehensive review of the area’s needs and demographics and was funded by Placer County, Truckee, Nevada County and the Workforce Housing Association of Truckee Tahoe.

Stacy Caldwell, CEO of the Tahoe Truckee Community Foundation, was one of the speakers at the Truckee Donner Chamber of Commerce breakfast this week.

The affordable housing challenge within the region an issue which has been barreling to a point of crisis for years, with the rapid rate of growth within the region seen as the culprit.

The area of study for the report roughly encompassed the West Shore of Lake Tahoe into El Dorado County, Truckee, Tahoe City, Tahoma and Kings Beach as well as the Donner Summit area.

Briefly, the research discovered that:

·      55 percent of the households have incomes classified as moderate or low

·      59 percent of workers commute to their jobs

·      47 percent commute out of the region to their jobs

·      4,000-plus new jobs are expected to be created in the region over the next 15 years

·      Almost half spend more than 30 percent of their income on housing; 26 percent spend 50 percent of income on housing

·      Rental rates are high, and there is little rental housing available

·      80 percent of the region’s 474 below-market housing units are in Truckee, all with full waiting lists.

Caldwell admitted that TTCF’s foray into the housing world is “hard stuff.”  The results of the latest study, she said, can no longer sit on the shelf as previous housing surveys have.

Producing the comprehensive analysis, Caldwell said, involved many partners, including several funding collaborators, a large technical advisory group and BAE Urban Economics, an urban economics and development advisory consulting practice, all of whom conducted surveys, participated in public forums and produced myriad stories for publication.

What they found included the fact that because affordable housing is at a minimum, it’s hard to retain good teachers as well as other professionals; that more than half of the houses built within the study area were built before 1979; and that 65 percent sit vacant half of the time.

The median income within the region is $75,000, making it difficult to purchase an affordable home. Rents are high, resulting in elevated occupancy rates within very small spaces, and more than 12,000 additional units are needed to meet demand.

“Most mountain communities are facing the same problems,” Caldwell said. “We’re all learning from each other.” She added there is no beginning, middle or end. “We don’t want to lead a parade and have no one behind us. This study just can’t sit on the shelf. There’s widespread momentum now.”

Caldwell said the study has commitments from several partners, but she is hoping that Placer County will jump on board with funding as have other entities. “We need a three- to five-year commitment and everyone must be accountable to the plan.”

We have seen collaborative engagements, she said. “My hope and vision is that it brings the key decision-makers to the table who can offer up leaders, land, policy and money and show a clear signal to our community that we are taking the housing situation seriously and are committed to accelerated change. That’s the mission of my organization.”

Tony Lashbrook, Truckee town manager, said the housing crisis is a top priority for Truckee. “The lack of housing is having a real impact on the quality of life for residents. Medical help and education are suffering,” he said, “because there’s no money; it all goes to housing.”

Additionally, Lashbrook said the situation has an effect on the area’s business climate too. He added that, “Placer County and the town of Truckee are the 800 pound gorillas in the room who need to be at the table to make this collaboration work.”

He told Lake Tahoe News, “The town of Truckee has committed to participate in the Housing Council, subject to the participation of Placer County.”

The Housing Council Lashbrook referenced was proposed by TTCF. In brief, it requests that Truckee commit $50,000 per year for three years to launch the endeavor. Placer County has also been requested to make an identical commitment, while Nevada County and other stakeholders have been asked to participate, although at reduced costs. This information was gleaned from a 2017 document entitled “The Housing Crisis in Truckee”.

Additional speakers at the breakfast were Ulrik Binzer of Host Compliance, who is working with Truckee on its transit occupancy tax compliance on short-term rentals, and Hirsh Jain of Airbnb.

A press release from the Truckee Chamber of Commerce says that the short–term rental and the house-sharing market has grown rapidly in recent years, making it hard to ensure that these rentals are paying their transient occupancy tax. They also can create nuisances in neighborhoods as well as remove much needed housing from the available market.

Binzer said his company, a San Francisco-based startup, offers a solution to this problem. “We help local government implement and enforce short-term rental ordinances,” he said. “We make sure landlords are playing by the rules.”

He explained there are close to 1,150 short-term rental properties in Truckee, with 65 percent of them listed on multiple websites. “It’s a very dynamic market,” Binzer said.

“Originally, 398 single family residence were not in compliance, and now [with the help of Host Compliance] 32 percent of them have been brought into compliance and are paying their fair share of taxes. The problem is not yet solved, it’s a continuing effort.”

In the last five years, according to Placer County staff members, vacation rentals have increased dramatically—more than 300 percent in five years—but tax revenues have not kept pace.

Jain, a senior manager for Global Public Policy for Airbnb, provided an overview of Airbnb and discussed the impact of short-term rentals on housing availability.

From its roots in 2008 to its current global impact, Airbnb now has more than 2 million listings worldwide.

“We want to make sure Airbnb pays taxes,” Jain said. “And we want to build open and transparent communication.”

An op-ed in the February issue of Planning magazine said that the dramatic rise of Airbnb and other short-term rental and home-sharing companies has caused cities like Truckee to seek regulations to ease some of the problems caused, especially the impact on affordable housing.

However, Jain said his company is working on ways to promote responsible home sharing. He reminded the audience that people like to stay in a local environment and not in a hotel setting. They spend locally, they stay longer and they’re vitally important to the local economy.

“We want to work with cities,” Jain said. “We are committed to facilitating the process of collecting taxes. We’re eager to work this out. We’re good actors.”

And Caldwell’s take on the area’s housing crisis and the impact of the short-term rental market?

She told Lake Tahoe News, “This is a complex issue requiring a sophisticated approach. We all have to be at the table and track the solutions. I’m optimistic because we have more than a handful of partners who have stepped up. We see a blended approach to the solution. There are a lot of dynamics that play into this situation.”

She said that Airbnb does change the dynamic of what’s available on the housing market, but they are also trying to lift the burden. “We need our tourists. They’re a part of the economy.”

Publisher’s note: This is one in a series of stories about affordable housing in the Lake Tahoe-Truckee region. All articles may be accessed via the home page under Special Projects, 2017 Affordable Housing.

By Terra Breeden

Most of the single-family homes in South Lake Tahoe sit empty. They are second homes, used by the owners only a handful of times a year, or as vacation rentals.

Affordable housing options have become limited in South Lake Tahoe and around the lake. There simply are not enough long-term rental homes or affordable subdivisions to house the local population. Many residents are forced to pay an inflated monthly rent in order to secure a decent living situation, stay in hotel rooms for extended periods of time, or move to less expensive areas like Minden and Gardnerville.

Because of the housing crisis, South Lake Tahoe is losing many of its longstanding current residents and potential newcomers. This creates a community where actual residents are scarce and vacationers are plentiful.

“Seventy-five percent of our residents are in a low income bracket,” El Dorado County Supervisor Sue Novasel said a meeting Feb. 10. “There are 1,800 employees who come here for the winter and we can’t get them to stay in Tahoe. In my mind, there is no difference between workforce housing and affordable housing. So now we are asking, ‘what are people’s needs’ and looking at the economic side of it.”

Progress for Tahoe hosted a community meeting at Mountain Lab on Friday to discuss the South Lake Tahoe housing crisis. Progress for Tahoe, a grassroots movement founded last year, has declared the lack of affordable housing to be one of the most pressing issues facing South Lake Tahoe residents. The meeting was attended by about 20 community members from El Dorado County officials to concerned residents.

“As a local, I wanted to be at this meeting and let the community know about their options,” founder of the Tahomes Facebook page and South Lake Tahoe resident Kelsey Adams said. “A lot of people are into affordable housing, but I have to turn down about 30 people who are looking for homes each day.”

At the meeting, attendees broke into small groups and brainstormed solutions to the housing crisis. They discussed a variety of proposed ideas, from improving the balance of vacation home rentals and long-term rentals in South Lake Tahoe to reviving the Silent Second Mortgage program. Any idea that might create more affordable housing in the community was considered.

Crested Butte, Colo., a ski resort town similar to South Lake Tahoe, was introduced as a model of what a small community can do to build affordable housing for its residents. Crested Butte has built multiple affordable housing units (without relying on grants or government money) by issuing a $2,000 to $50,000 fee for building new homes in the area and installing a public transportation tax. The money gathered from these incentives is put into a community pot that is used explicitly to build affordable housing for its long-term residents.

“We want to honor the fact that we live in a beautiful place and it’s sensitive to development, but if we look at communities like these, we see that it can be done,” a woman in the audience said.

Other ideas discussed at the meeting included reviving the Silent Second Mortgage program, a program that helps people who make less than $60,000 a year purchase homes. Troy Matthews, a member of the Progress for Tahoe steering committee, wants to make an appointment with the city manager to see if the city of South Lake Tahoe can reinstate the program.

Zoning South Lake Tahoe neighborhoods so that ratios of vacation home rentals, second homes, and long-term rentals are equalized was another solution proposed at the Progress for Tahoe community meeting. By zoning neighborhoods, the belief is the city could create a required ratio of long-term rentals for residents and help solve the housing crisis.

Everyone at the meeting agreed that there is a substantial shortage of long-term home rentals for families and short-term rentals for Heavenly Ski Resort employees in South Lake Tahoe. But building one affordable housing unit is not going to solve the housing crisis. And there are several obstacles to building new homes in Lake Tahoe. The cost to even put a shovel in the soil and break ground is humongous due to zoning and government fees.

However, Novasel has put together a task force to look at what can be done to reduce building fees and to collect data on current housing conditions in South Lake Tahoe.

“We want to look at zoning, fees, and the fact that we have limited space to build,” Novasel said. “These are the three major barriers to building more affordable housing.”

Publisher’s note: This is one in a series of stories looking at the affordable housing issue in the Tahoe-Truckee area.

 

“For any community, the quality of life experienced by its residents depends, to a great extent, 

on the quantity and quality of available housing.”

                                          — 20-20 Committee report to the South Lake Tahoe City Council, Jan. 2, 1979

 

By Joann Eisenbrandt

The lack of affordable housing for many of South Lake Tahoe’s permanent residents, for homebuyers and renters, has been a clearly recognized but largely unsolved problem for decades. Recently, El Dorado County District Five Supervisor Sue Novasel put together a Housing Task Force to revisit the issue and hopefully identify some realistic solutions.

South Lake Tahoe was incorporated on Nov. 30, 1965. Laurel Ames, an active participant in that incorporation process, spoke about the new city’s high hopes in a March 2015 article for Lake Tahoe News celebrating the city’s 50th anniversary. She explained the city hired a land use planner and began a yearlong effort called 14,000 Planners. It was called 14,000 Planners because that was the city’s population at the time. The idea was that everyone had a role to play and a voice in the process. South Lake Tahoe, as Ames put it, “could have any kind of community it wanted, provided they could articulate and agree on a picture of what that vision was.”

In the decades since, a number of exterior forces and geographic constraints have influenced the city’s ability to create such a cohesive vision. This is especially true when it comes to the development of affordable housing.

A statewide issue

Affordable housing is not just a Tahoe basin or El Dorado County issue. Providing affordable housing is a statewide requirement and a statewide problem. Each governing body in California is required to adopt a general plan outlining the long-range physical development of their jurisdiction. The Housing Element is a mandated part of that plan. It must show how local governments plan to meet the existing and projected housing needs of all economic segments of their population.

At the local level

For some time, the city’s affordable housing issue centered on those who work in the service industry sector. This is what many call “workforce housing.” More recently, however, the affordability question has moved up the income scale to include established middle-income professionals and college-educated millennials.

At the Oct. 25, Board of Supervisors meeting, Novasel requested $15,000 in El Dorado County transient occupancy tax) funds to contract with consultant Michael Ward of High Bar Global Consulting. The plan is to create the framework for a group of stakeholders to meet and develop strategies to address what Novasel terms South Lake Tahoe’s “affordable housing crisis.”

She told the supervisors that at the lake the Tahoe Regional Planning Agency had created commodities/development rights to control growth. These, she said, had the effect of driving up construction and rehabilitation costs and creating a barrier to redevelopment of the city’s aging infrastructure. There are a limited number of tourist accommodation units available for new construction. TAUs have value and can unrealistically escalate the purchase price for motels or the transfer of those units. Vacant or deteriorating properties still dot the landscape, too expensive to rehabilitate or rebuild as affordable housing. Like all construction, affordable housing must pencil out economically or it will not get built.

“Our housing is in a critical mass right now,” Novasel insisted.

TRPA is taking a hard look at many of its regulations and standards for the first time, commodities among them. It is anticipated this process will take several years. Novasel doesn’t want to wait. Her goal is to have her newly-formed group composed of representatives of the California and Nevada jurisdictions at the lake, “sit down and start a real direct discussion to see what we can do.” The first six organizational meetings will involve mainly public agencies with additional groups such as nonprofits, real estate agents, employers, social service agencies and local residents brought into the process after that.

Participants share their views

TRPA is represented on the task force by Executive Director Joanne Marchetta and COO John Hester. The bi-state agency’s public information officer Tom Lotshaw told Lake Tahoe News that TRPA supports Novasel’s effort.  

“We wouldn’t want Sue (Novasel) to wait for our (Development Rights) Strategic Initiative to be completed. The commodity system is creating some friction for the affordable housing process. The Strategic Initiative is a major undertaking and it won’t change things overnight,” Lotshaw said.

He added, “We are there to help … to come up with a menu of potentially viable solutions to take back to each jurisdiction around the lake and apply them situationally. We are excited and optimistic to see what’s happening.” Novasel is a member of the TRPA Governing Board.

What city leaders say

South Lake Tahoe Mayor Austin Sass attended the first meeting of Novasel’s group in November. He told Lake Tahoe News, “I don’t know how much blame you can put on TRPA. This is a very desirable tourist destination. In comparison to Aspen and Vail it is affordable, so people from the Bay Area have bought second homes here. These people may not be willing to rent out these homes at affordable housing rates.”

Sass, who is also a member of the TRPA Governing Board, said the city has 350 rent-controlled or affordable housing units that were built before redevelopment money was taken away by the dissolution of redevelopment agencies by Gov. Jerry Brown in 2012.  “These types of projects don’t pencil out now for any city. El Dorado County has zero affordable housing units in the unincorporated area of the Tahoe basin.”

“I’m a pragmatic guy,” Sass explained. “I want to know how we are going to get it done and where we are going to get the money from. The purpose of this group is to put our heads together to find out if there is money in places we don’t know about.”

South Lake Tahoe Mayor Pro Tem Wendy David also attended the task force’s initial meeting. She told Lake Tahoe News, “We have a gorgeous lake that must take priority in protecting, but along with that has come very strict building restrictions and availability. It’s a very delicate balance that we’ve tried to maintain.”

David is encouraged that TRPA is now “sitting at the table with us. It is important to work together with the regulatory agencies to see how to address the housing issue. That is a very positive thing that is happening.”

David noted that city housing prices have surpassed their highest peak in 2006. She sees vacation rental properties as a contributing factor.

“We are seeing an increase in the percentage of single-family homes that are being sold and then used primarily as vacation rentals. How people are vacationing has changed and that has led to a lot of commercial activity in residential areas,” David said.

She noted that the City Council just recently revised the city’s Vacation Rental Ordinance to ban future vacation rentals in multi-unit complexes, one of the main sources of affordable housing for low- and moderate-income residents.

According to David, “workforce housing” is not the full extent of the problem. “What we have,” she insists, “is a lack of adequate housing at all economic levels. If professionals take jobs here and then find they cannot find a home in their price range, they will eventually leave. At the other end are young professionals just starting out as well as the lower-income residents who just want to live the dream of Tahoe and are willing to be a bartender or a dishwasher.”

David is hopeful the involvement of basinwide elected decision-makers will lead to agreement among agencies and jurisdictions on what needs to be done and what the first steps should be.

Affordable housing and economic development

Novasel believes it’s appropriate that TOT money is being used to help finance her efforts. TOT is charged to those renting lodging in the county or the city for less than 30 days. Renters pay it to property owners as a percentage of the rent charged. Property owners then pay that money to the local jurisdiction.

The county’s 2004 General Plan loosely defines how TOT money can be spent. “The majority of transient occupancy tax generated revenue shall be directed toward the promotion of tourism, entertainment, business, and leisure travel in El Dorado County.”  

Novasel said, “This is economic development. We want millennials. We want our workforce to find homes to live in. If employees can’t find housing, then businesses can’t have employees.”

The 20-20 viewpoint

14,000 Planners was South Lake Tahoe’s first attempt at strategic planning, but it was certainly not the last. In 1976, 11 years after the city’ birth, the 20-20 Committee was formed. It was called the 20-20 Committee because each of the five city councilmembers chose four community members to help identify significant issues and provide 20-year-long solutions. There were a number of public meetings to encourage community input. In December 1979, the group presented its final report to the City Council.

Barriers and solutions

Among the group’s objectives was to, “Improve the quality of residential life by ensuring that adequate housing is available to all residents.”

A number of barriers were going to make this difficult. “Due to the lower salaries and seasonal nature of employment in the region,” the report concluded, “the available housing is beyond financial reach of the majority of residents.”

It found the community had a high transiency rate and those service-industry employees who did live in town, “appear to accept a ‘natural’ lowered standard of living by virtue of living in such a unique area.”  This, the report noted, can lead to intense negative reactions to tourists generated by, “a feeling of being a ‘second-class’ citizen.”

The lack of affordability of housing led to overcrowding in rental units, many of which were substandard or dilapidated. The group believed the city needed to update its Housing Element to encourage more affordable housing and create a housing advisory committee to administer solutions. A public/private partnership was essential, as was the need for Nevada’s large employers to produce “adequate and available housing for their employees.”

The 20-20 Committee felt, as 14,000 Planners had, that South Lake Tahoe first needed to decide what type of town it wanted to be. It recognized the need to preserve the basin’s beauty given tourism as the prime industry. 

“At the same time,” they insisted, “the needs of residents must be met to assure a cohesive, happy community, and enhance the quality of the visitor experience.”

The labor pains continue

In the late 1980s, Renaissance 90 hoped to accomplish what 14,000 Planners and the 20-20 Committee had not. Of these earlier efforts, Renaissance 90’s Strategic Plan noted, “Inexperience with strategic planning and the timing of both efforts have resulted in some unmet expectations.”

The group’s effort to achieve a “Tahoe rebirth” was spearheaded by then City Manager Kerry Miller. It was divided into six committees—among them Economic Development and Land Use, Well-Being and Housing. It was a mix of public officials, community leaders and ordinary citizens, including this reporter who served on the Housing Committee. The final report was presented to city leaders in June 1989.

The Housing Committee found that affordable housing remained a pressing issue. It thought prior efforts had focused too much on planning and not enough on action. However, it agreed with them that there needed to be “significant citizen involvement in planning for the city’s future.” Before such planning could take shape, city leaders needed to ask, “Where does the city want to go?” Renaissance 90 hoped its Strategic Plan would “establish a sense of direction for the community as a whole.”

Need for meaningful planning

Apart from the new redevelopment area, the group noted that the city had no economic development program or meaningful land use planning. The city’s population had a high per capita education level and there was a high quality of life to attract workers and businesses, but there was also a transient local population and a high percentage of small business failures.

The committees suggested “champions” to implement the strategies they proposed. The Housing Committee identified the city and an as-yet-to-be-formed nonprofit housing group as “champions” for the development of more low-income housing.

The committee carried out a detailed analysis of the city’s housing inventory, condition and availability through street-level physical surveys and interviews. It concluded that a “substantial number” of residents were low income, given the preponderance of low-wage jobs at the casinos, resorts and ski areas. These residents had to spend a “disproportionate amount” of their income for housing or choose to live in overcrowded multi-family units that were in “poor to substandard condition.”

The lake’s complex regulatory environment took some of the blame. “The area’s history of stringent building constraints and complex inter-agency oversight functions, combined with economic infeasibility, has led to delays in both new construction and rehabilitation or reconfiguration of existing residential units, especially in the median to lower income ranges.”

The final report pointed to past failures to, “include the psychological needs of residents in the planning process.” 

It recommended an ongoing forum be created to evaluate progress and provide opportunities for citizen input, finding that, “Affordable, desirable and appropriately configured housing for all residents is central to a community’s social and economic vitality.”

Chamber takes on the issue

As the affordable housing shortage began to affect local businesses more substantially, they also became involved in trying to solve the problem. In March 2001, the South Lake Tahoe Chamber of Commerce had an Affordable Housing/Work Force Housing forum at Harveys. An employee/labor pool survey had been distributed in the weeks prior to the meeting asking chamber members for employee statistics and issues related to affordable housing.

Questions the survey asked included: “Do you feel that your employees are able to live in our region comfortably with the wage/salaries that you pay?” and “Do any of your employees have housing problems?” One hundred-twenty businesses responded to the survey.

Attorney Lew Feldman, who led the discussion for the chamber, said, “The quality of the resort is the quality of the people who live and work in the resort.” Steve Teshara from the Gaming Alliance told the group that lower-end casino employees could not live on their wages unless they were a two-person household. The casinos were going out further and further into other communities to recruit—often as far as Europe and Mexico. Andrew Strain of Heavenly said that housing supply and demand was “out of balance.” He referenced people living behind the loop road in the woods underneath the Heavenly gondola. He said affordable housing must make “bottom line sense” to happen, pointing to the negative impact of the “local and regional regulatory maze.”  

Kathy Southern, president of the Board of Realtors, noted a decline in the low-income housing pool and the subsequent rise in rental prices. Investors found developing moderate income properties in Tahoe “stifling.” She said that 10 percent of the market pool of housing was “lost to second homes and vacation rentals.” She pointed to the conversion of older motels into employee housing as one possible solution.

Hal Cole, South Lake Tahoe mayor, said, “We’re becoming a more elitist community like Aspen. Workers are bused in and Tahoe is only enjoyed by the rich.”

The survey showed that 82 of the responding businesses had from one to 20 positions unfilled; 52 of them believed that the lack of affordable housing affected their ability to hire and retain employees. The majority of employees had salaries in the $6-$10/hour range. Fifty-five business owners said their employees were not able to live in the region comfortably with the wages they paid, and 61 respondents said their employees were experiencing housing problems.

Looking toward tomorrow

In 2002, Tahoe Tomorrow, a volunteer group of local businesspeople and community leaders addressed the same issues the chamber had identified the year before. They sought to help create “a better tomorrow for everyone.” Their board of directors included familiar faces like Feldman, Jeff Tillman of South Tahoe Refuse, chamber Executive Director Duane Wallace, Lakeside Inn owner Mike Bradford, former South Lake Tahoe City Attorney Dennis Crabb and marketing consultant Carl Ribaudo. They created task forces to identify community issues. Action teams would then implement solutions. 

The Building a Stronger Community Task Force focused on affordable housing. Their data showed that 56 percent of South Lake Tahoe households qualified as low-income or lower and that 25 percent of the housing stock was owner-occupied with 75 percent being rentals or second homes. They found the “significant shortage of affordable housing, decent rentals, and starter homes—with ever-escalating costs of real estate,” came to a large degree from “a lack of shared vision and proactive multi-jurisdictional leadership.”   

Tahoe Tomorrow only lasted a few years. “It was a volunteer group,” Ribaudo told Lake Tahoe News. “It fell apart because of lack of funding.”

Study and more study

Over the years, a number of housing condition studies were conducted and reports prepared by the city to determine the extent of the affordable housing need and the best way to spend the required 20 percent tax increment funding in the redevelopment area as well as how to allocate Community Development Block Grant money and funding from other sources such as the state Rental Rehabilitation Program.

The city’s Housing Authority had a housing priority workshop in July 1996. At its next meeting that August, city Housing Coordinator Patrick Conway noted that, “Approximately 40 percent of the housing stock in the city is considered substandard.” His report focused on the question of what was South Lake Tahoe’s “fair share” responsibility to provide housing when a significant portion of the city’s housing stock is used to support those who work in Douglas County. He referenced the Douglas County Population and Housing Element which showed that the city provided housing for 4,667 workers from Douglas County, but only 640 Douglas County residents worked in South Lake Tahoe.

In February 2003, the Parsons division of P&D Consulting prepared a report for the city entitled, Housing Issues and Challenges. It found, “Local workers, both service sector employees and professionals such as teachers, government employees, and social service agency staff, can no longer afford housing in South Lake Tahoe.” 

Rental prices were lower than in urban areas, but when these rates were compared to incomes, rental rates in the city were “high.” Additionally, the least expensive housing stock is, “old, not well-maintained, substandard, and owned by absentee landlords who are not responsive to tenants’ complaints.”

In 2016, the city hired the consulting firm of Michael Baker International to conduct a vacation home rental economic impact study. The proliferation of vacation rentals in the city has been frequently mentioned as a contributing factor to the affordable housing shortage. An online survey is available on the city’s website. The first public meeting was Nov. 16, 2016, with the second one scheduled for Jan. 25. According to the city’s website, the goal is, “to find out how (vacation rentals) affect you and your neighborhood.”

Councilmembers Sass and David formed South Lake Tahoe’s subcommittee that studied vacation rentals for the last year and a half. Sass called it a “socio-economic study looking at how vacation home rentals are affecting our town.”  He believes the study will give the city needed information to come up with a long-range solution. He told Lake Tahoe News the finished report should be ready in April or early May.

Hard to kill

Despite the fact that it has been studied to death by a plethora of public and private agencies, the affordable housing problem in South Lake Tahoe lives on. In her October 2016 monthly column, “Working Together on Lake Tahoe’s Housing Problems,” TRPA’s Marchetta acknowledged that median home prices of nearly $400,000 on South Shore are, ”simply too high for our region’s low wages, putting the cost of home ownership and even rent out of reach for many working people.”

She referenced a study on affordable housing by the Tahoe Prosperity Center. Heidi Hill Drum, executive director of the Tahoe Prosperity Center, is a participant in Supervisor Novasel’s affordable housing task force. In the October 2015 Measuring for Prosperity report, the Prosperity Center agreed that “second home ownership rates are increasing in the region and there is little market momentum currently for additional workforce housing. However, even in 2010, TRPA reported that housing affordability in the Tahoe basin was more challenged than in the San Francisco Bay Area, primarily due to lower wages in relation to housing prices. The more recent trends have widened the affordability gap.”

They reported that Tahoe has lost close to 7,000 jobs since 2008, has an unemployment rate higher than the state average, has seen declining school enrollment and a drop in prime working-age adults between 25 to 44 years as a proportion of the total population. Drum told Lake Tahoe News she agrees with the emphasis Novasel’s task force is putting on regional solutions.

Novasel wants to see her group, “go beyond our specific little silos and collaborate because that’s how we are going to see real progress.” She acknowledges the long history and complexity of the affordable housing issue.  “We can’t solve all the housing problems,” she emphasized. “We can solve specific issues within the housing problem. It’s like saying you are going to solve poverty. It’s too big of a moving target. If we can wrap ourselves around an issue or two, we can get that done now.”

The group’s next meeting is expected to take place in early February.