This article is based on research and conversations with the Town of Truckee Housing Program Manager, Seana Doherty, and local realtor, Mark DiGiacomo. Seana works for the town of Truckee, facilitating housing for the local workforce. Mark DiGiacomo has worked as a realtor for the Truckee-based real estate company Carr Long Real Estate for the past nine years. I had the privilege of chatting with Seana and Mark about the current housing crisis in Truckee-North Lake Tahoe and how this crisis has heightened amidst the COVID-19 pandemic.
Before reading, please note: This article is not meant to be an attack on anyone looking to buy a second home in Tahoe. In fact, tourism has become a vital part of Tahoe’s economy. The desire to own a home in Truckee is completely understandable, and if you can buy a house there, this article is not meant to stop you from doing so. Housing in Truckee is like an ecosystem; tourism and local life must be in balance for Tahoe to be the best possible version of itself. Unfortunately, this balance has shifted, and this article is meant to address this issue.
Truckee’s housing crisis began far before the onset of the pandemic.
Truckee, the largest town in North Lake Tahoe, with a full-time population close to 17,000, has been experiencing a housing crisis that has gotten worse year after year. Truckee is a dream destination for many outdoor enthusiasts, making it a prime location for vacation homes. Being only about 3 hours from the Bay Area, Truckee offers an appealing mountain town retreat from the hustle and bustle of everyday city life. As Silicon Valley and other Bay Area-based companies continue to grow, so does the disposable income of many Bay Area residents. This growth is what has contributed to the housing boom in Truckee. The Bay Area and Truckee are so connected that the Truckee housing market fluctuates directly with the Bay Area housing market. When housing prices in the Bay Area are up, so are the housing prices in Truckee. This increase in Truckee housing prices has unfortunately caused many issues for the local workforce looking to rent and buy affordable homes.
How widespread is the issue? According to Seana Doherty, approximately 50% of the houses in Truckee are currently owned as second homes. As more people are looking to buy second homes in Truckee-North Tahoe, the balance is shifting, and more and more of the housing in Truckee is unavailable for the local employees. It is estimated that, in 2020, nine out of ten houses sold in Truckee were sold to the second (or third home) market. While more houses are being built, the demand has grown much faster than the supply, and with housing prices becoming less and less affordable for locals, any new housing is quickly purchased by the second home market.
Local ski resorts in the Truckee-North Tahoe area have done some, but not enough, to meet their seasonal and full-time employees’ housing needs. Seasonal workers are forced into an already saturated housing market, often piling many people into small spaces to afford high rents.
Why are increased housing prices in Truckee such a big issue? The biggest issue related to the increased housing prices in Truckee is its impact on the local population. Unable to afford the increased housing prices in Truckee, many locals have been displaced. This is an issue because these local employees are the nuts and bolts that make Tahoe operate the way it does. Many of these employees are displaced to other cities, such as Reno, where they can find better jobs that don’t require them to commute. This creates an employee shortage, which has a negative impact on the amenities Truckee-North Tahoe offers. Some of these amenities include ski resorts, retail shops, and restaurants. With fewer employees, service quality suffers, creating a less than ideal experience for visitors. On top of the service industry suffering, the infrastructure also suffers. With fewer employees, there are fewer people to aid in snow removal, road maintenance, etc.
Housing crisis worsens amidst pandemic
While Truckee had already been experiencing a housing crisis, the onset of the COVID-19 pandemic escalated the problem. According to Mark DiGiacomo, during the summer of 2020, demand for housing in Truckee skyrocketed. New listings were immediately gobbled up, and demand was so high that several of these houses saw 20 or more offers, with some of them being over the listing price. With such a high offer volume, it is no surprise that locals could not compete, especially when some of these offers were cash offers.
Rentals became even more scarce. While some of these new residents were looking to purchase a second home in Truckee, others were looking for rentals. This is an issue because many of the locals and seasonal workers who are not in the financial position to purchase a house in Truckee depend on these rentals for housing. Unfortunately, many of these vital rental properties were swooped up by remote workers. According to Seana Doherty, some of these remote workers were extremely assertive in their search to find housing and were willing to pay for full six-month leases in cash upfront. This created another situation in which many locals were unable to compete.
While the current housing situation in Truckee is a bit bleak, hope is on the horizon. On November 3rd, 2020, Truckee residents passed measure K with an overwhelming 84% majority. Measure K raises the transient tax rate from 10% to 12%. This tax includes taxes on short-term rental and hotel guests. This measure will generate an estimated $700,000 annually, with a large portion of that money going towards affordable and achievable housing.
How will this affordable and achievable housing be achieved? One way the town of Truckee is attempting to create more affordable housing is through grants and loan programs. Homeowners who commit to utilizing their houses for long-term rentals will receive a $3,000 grant. The Town of Truckee is hoping to use these grants to transition 25 houses to long-term rentals per year. Truckee also offers grants and loans to homeowners to build secondary units on their properties to rent out to locals.
There are other companies that are here to help. Landing Locals is a for-profit company that works to match homeowners with locals who are searching for housing. They currently have operations in Big Sky, Truckee, and Telluride. Through working with employers, Landing Locals qualifies renters and guarantees property owners protected revenue streams and flexible lease agreements.
What to do if you are a local or seasonal worker struggling to find housing?
According to Seana Doherty, the best way to find housing is to be as proactive as possible. Check facebook housing pages constantly, and work with companies like Landing Locals. Be on top of your game, and respond/follow up immediately.
What can you do to help the local community if you are a second homeowner?
Build a secondary unit on your property to rent out to locals. Being in an unattached unit, these tenants won’t disturb you during your vacation. While you’re away, they can also help you maintain your property.
Consider renting out your property for extended periods of time while it sits vacant. If you only visit your property during the summer, rent out your property for the winter and vice versa. Winter leases are called ski leases and usually run from the beginning of December until the end of April. These leases are a huge help to seasonal resort employees, and the rental money can help you make mortgage/property tax payments.
Work with Landing Locals to rent out your property. Landing Locals ensures that you will make money renting out your property while maintaining the ability to use your property when you please.
Convert your second home to a long-term rental. If you haven’t been to your second home in a while, consider renting it out long-term. Not only is this a huge help to the local community, but it is also a great way to make money on your otherwise vacant property.
A final note from the Truckee locals:
Earlier, I mentioned housing in Truckee being an ecosystem in which the locals and tourists must be in balance for Tahoe to operate effectively. If you have the ability to help combat the housing crisis in the North Tahoe-Truckee, please do. We are not a bunch of ski bums that will destroy your house when you are away. Many of us are pursuing legitimate careers out here, which the housing crisis has been hindering. We love Tahoe as much as you do, but if we cannot find housing out here, you might find on your next visit that Tahoe isn’t as glorious as it once was. We greatly appreciate any help that we can get, and who knows, perhaps we’ll even let you in on some of our hidden untracked pow stashes!