On Aug. 1, a new pilot program launched in North Tahoe that pays homeowners up to $24,000 to rent long-term to locals.
The goal is to “unlock” homes that are sitting vacant in Lake Tahoe and alleviate some of the mounting pressure on local workers who are in need of places to live that they can afford on their wages.
“We continue to have such a desperate need for more workforce housing in North Lake Tahoe, and yet so many of the homes here sit vacant for much if not most of the year,” said Placer County Supervisor Cindy Gustafson, who represents North Lake Tahoe, in a statement. “It’s clear that in other mountain resort communities incentives like this have been the key to unlocking more homes for local workers and we’re eager to see that play out here, too.”
The Lake Tahoe region hasn’t built enough homes for local workers, and local wages haven’t kept up with aggressive increases in housing prices. As a result, Tahoe is losing its workforce, hurting businesses and the economy. A recent survey conducted by the Tahoe Prosperity Center found that 73% of those surveyed agree a “lack of stable housing options for workers is the most significant threat to quality of life in the Tahoe Region.”
Some are looking to the region’s large inventory of second homes as one way to address the housing crisis. In North Lake Tahoe, 65% of single-family homes are second homes and short-term rentals, according to a 2021 Mountain Housing Council study. Many of those houses sit empty for the vast majority of the year. Meanwhile, at any given time, about 200 to 300 households who work in the Tahoe region are searching for housing, according to a database kept by Landing Locals, a Truckee-based company that’s become a matchmaking service between homeowners and local workers.
The “Lease to Locals” program approved by the Placer County Board of Supervisors in July is a stopgap solution that puts local workers in Tahoe’s vacant homes. It’s modeled after similar programs that have seen success in Truckee and South Lake Tahoe, operated by Landing Locals. The financial incentive is key to its success.
“We’re trying to get people to change their behavior, and that might be that their house sits empty or rents short-term or they rent it to a friend or ski lease. So it’s a big change for them to go to the long-term,” said Colin Frolich, co-founder and CEO of Landing Locals. “Money motivates people.”
In North Lake Tahoe, Placer County will pay up to $24,000 to homeowners. The grants are based on the number of locally employed tenants and the length of the lease. Homeowners earn $2,500 per tenant for a lease that’s at least five months long, and $6,000 per tenant for long-term leases of 12 months or more. The highest $24,000 grants are reserved for homeowners who house four employees with a 12-month lease.
In exchange, the program caps the amount of rent a homeowner can charge at $3,500 — fighting back at similar houses listed on Zillow or rents that range from $4,500 to more than $7,000 a month.
The Placer County Board of Supervisors approved a $500,000 budget for the pilot program, including $95,000 in contract to Truckee-based nonprofit Landing Locals for administering and marketing the program. If funding is available and the pilot program is successful, the Placer County Board of Supervisors may extend the program beyond its initial year.
North Lake Tahoe’s grants are higher than grants offered in other parts of the Tahoe region to reflect the higher cost of housing on this side of the lake, Frolich said.
“It’s the big houses in Carnelian Bay, Tahoe Vista and Kings Beach — a lot of them are not amazing, beautiful houses,” Frolich said. “They’re just big and they’re worth a lot of money.”
Those same houses are ideal for families with school teachers, grocery store clerks, hospital employees and government workers. Qualified tenants must work at least 20 hours per week at a business that is located within the Tahoe-Truckee Unified School District boundaries. Proof of local employment is required.
Dave Benge is a Truckee homeowner who turned to Landing Locals to help him find local tenants. He rents his three-bedroom, two-bath house with a two-car garage to a family whose father works at the Truckee Donner Public Utility District. He received a $7,500 grant, which he says helped him pay for renovations to update the house before the tenants moved in. He charges $2,800 a month, below the rental cap required by Lease to Locals.
Benge’s story is a familiar one in Lake Tahoe — he came for a winter in 1985 and stayed for a lifetime after he bought a house in a desirable neighborhood, Sierra Meadows, close to downtown, the river and a ski resort. More than 35 years later, he still lives in Sierra Meadows and he’s recently retired from a career at Northstar California Resort. But Benge’s story, once a common tale among local residents, has become out of reach for people who work here and want to stay in Tahoe full-time.
Benge remembers job fairs at Northstar at the height of his career that would attract hundreds of people. “There’d be 200 people knocking on your door to come to work,” he said. “That dwindled over the years.” Now he’s retired, but he says the job fairs are much quieter, not because people don’t want to live and work in a ski town, but because it’s become so much harder to make the budget work.
The decline of Truckee’s workforce and the housing crisis is one reason why Benge decided to rent a second house he owns in Sierra Meadows to locals. He says he could have made more money renting to tourists on vacation with Airbnb, but he’s seen the changes in his community brought on by the housing crisis.
“I just thought it was the right thing to do,” Benge said.
In Lake Tahoe, the median price of a home was $950,000 in 2021, according to Chase International. Square that figure with the average median income in the Tahoe Basin: $53,156 in 2020, according to the Tahoe Prosperity Center. The math doesn’t add up. A household would have to earn “between $317,000 and $380,000 in gross income per year to afford the median priced home in the region,” a recent report from Tahoe Prosperity Center says, using a traditional calculation that budgets housing to be about a third of monthly costs.
“We just want to give people a chance,” Frolich said.