While the real estate market in Tahoe skyrockets, long-term rentals are scarce. In Tahoe City, where Hanichen lives, home prices have increased more than 30% compared with last year, according to Redfin. (Nationwide, home prices are up 11%.) In Truckee, almost twice as many homes have sold year over year.
Meanwhile, the inventory for vacant long-term rentals in Tahoe is 0-2%, says Heidi Hill Drum, CEO of the Tahoe Prosperity Center.
“So when you have a vacancy rate of zero percent, it means there’s no rentals available,” Hill Drum says. “Two percent means there’s very little on the market and you can pretty much charge whatever you want.”
On Craigslist, there seem to be more posts advertising renters searching for a place to live than there are rentals. With so few places available, rates are predictably going up. Landing Locals, a service that aims to place Tahoe Truckee renters in vacant second homes, said the average rent for a house in North Tahoe and Truckee, as of July, was $3,500 a month.
That kind of scarcity and pressure is squeezing a lot of locals — from seasonal tourism employees and service industry workers to nurses, teachers and government employees — who also have to compete with people from the Bay Area on the few rentals available. One post on Craigslist said they were a “Bay Area professional looking for a winter escape” and would pay six months’ worth of rent, up front.
This issue has gotten so pronounced that the town of Truckee is literally offering to pay second homeowners a $3,000 grant if they rent their house to locals for 12 months. The grant program is a partnership between Truckee and Landing Locals, which will coordinate the rental. Seana Doherty, Truckee’s housing manager, says she hopes this investment will catalyze second homes that are currently sitting vacant.
“There are just not many homes that are empty for 12 months of the year,” Doherty says. “It makes it really desperate for people because their landlord told them they have to go and there’s just not that much out there.”
Looking for a house to rent in Tahoe for three, six or 12 months is a search that requires a lot of effort and patience. Hanichen started by posting a query on Facebook: “Here’s a golden opportunity for you to be my landlord,” he wrote. He’s optimistic he’ll find something, but he says it probably won’t be as good of a deal as the place he lives in now. He says the going rate to rent a one-bedroom in Tahoe City is about $1,200 right now — a $500 hike from what he currently pays — and even those are hard to find.
Colin Frolich, co-founder of Landing Locals, used to work for Airbnb. But when he moved to Tahoe with his wife in 2018, he says he “defected” to start this new company with his wife. Now he helps Tahoe locals find places to live in a region saturated by vacation rentals. Landing Locals doesn’t just help renters. They’re also trying to make it easy for second homeowners to fill their homes. Frolich describes his job as “matchmaking.”
“We are really trying to understand what it’s going to take to convince homeowners to open up their homes and rent them out seasonally or long term,” Frolich says.
Landing Locals fields a lot of queries from Bay Area residents wanting to move to Tahoe. One person wrote on their rental application that she worked at Uber, her spouse worked at Google, they had a combined income of $550,000 and they owned an award-winning poodle, Frolich told me. They said they would pay a year’s worth of rent up front — plus $1,000 more than the asking price.
“I was like, god damn it,” Frolich said. He wrote the woman back and said their company prioritizes finding rentals for Truckee and Tahoe residents.
Frolich saw the pandemic’s impact on the rental inventory in Tahoe firsthand. When short-term rentals were banned last spring, he says he got a bunch of inquiries from second homeowners and matched 20 places to live with renters. Then summer started, and a lot of people from the Bay Area came to Tahoe to stay for a lot longer than usual. Vacation rentals were booking up fast. The real estate market picked up the pace. Long-term rentals dried up. Then, Twitter announced they would let their employees work remotely, and, Frolich says, the “dominoes just fell.”
“Everyone just either occupied their existing second home or started bidding and buying all the houses in Tahoe and constricted supply, raised prices,” he says.
In September, when some of the summer visitors headed home, another wave of houses in Tahoe and Truckee went up for rent on Landing Locals. But those were filled fast, and now there are only a few houses available.
Emily Vitas, executive director of the Truckee Tahoe Workforce Housing Agency, says she hears from people at least once a week who are looking for a new place to rent because their landlord just sold their home.
The Tahoe Truckee Workforce Housing Agency represents some of the biggest employers in North Tahoe and Truckee — the Truckee Tahoe Airport, Tahoe Truckee Unified School District, Tahoe Forest Health System and Truckee Donner Public Utility District — who are desperate to find more housing, both rentals and homes to own, for their employees.
Almost 40% of their employees rent, Vitas says, and 16% say they’re seriously considering a move out of the area because housing has gotten so expensive. In the past 10 years, Tahoe Forest Hospital has seen 13% of its 1,100 employees move from Truckee to Reno, a half-hour commute away.
“The urgency on our end has escalated greatly,” Vitas said. The workforce housing agency was created last March. Just six months in and Vitas said the group is starting to talk about the need to build their own employee housing if they want to keep people in Truckee.
Several affordable housing projects are being built in Truckee right now that will open up 200 units to low-income families as soon as this spring, Doherty says. Not only will those projects help alleviate a financial hardship for families who have been overpaying on rent, but when those families move, Doherty hopes it will also open up more places to live and rent throughout the region.
Hanichen’s shack is still on the market, though he heard an offer may have recently been accepted.
“The thing that gives me the most comfort: Who the f— is going to pay a half million dollars and live in this little shack?” Hanichen says. “For me it’s been perfect. I love this little place.”
Hanichen’s landlords bought it sight unseen. (He pays rent to a property management company.) They’ve never raised the rent in the three years he’s lived here, and he says they’ve treated him well. He assumes the property owners just want to make good on their investment.
“There are zero things I can do about this. Absolutely zero,” Hanichen says. “It’s the way of the world. It’s the way it is up here. It’s nothing to be angry about. It’s just the way it is.”
Perhaps Hanichen’s new landlords will let him stay — though he’s well aware that real estate trends indicate people aren’t buying properties in Tahoe right now just for the investment. Instead, they want to move and actually live in Tahoe. That’s not necessarily a bad thing. Places like Tahoe City and neighborhoods throughout the region could use a dose of new residents to support a year-long economy.
Hanichen’s lease expired on Oct. 1, at which point he went to a month-to-month agreement. If it sells and the new landlords want to move in, they’ll have to give him 60 days’ notice. He’s not too stressed — a couple friends have already reached out with leads. He says he’ll probably find a place to live through word of mouth, not on Craigslist.
“I’m not worried about being tossed in the cold,” Hanichen says. “But it’s like, to live in my own one-bedroom in downtown Tahoe City for 700 bucks, that is going to be tough to beat. A godsend has to come down and give me a better deal than what I have. I’ll stay positive on that.”
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