Why do we want shared ownership properties at Tahoe-Truckee? (Opinion)
The Tahoe-Truckee community has always been a unique blend of year-round locals and second homeowners. We rely on each other for our livelihoods, our ability to enjoy this amazing locale, and our sense of community.
Second homeowners are a big part of our Tahoe-Truckee lifestyle. Our kids have close friends from ski teams and summer camps who are children of second homeowners. We have regulars who patronize our businesses whenever they’re in town, and we look forward to seeing them and providing them our services. Many of our businesses wouldn’t be viable if not for an influx of second homeowners.
Second homeowners are our neighbors. They are invested in our neighborhoods because they spend a lot of time here. They make a significant investment in their property and bring an owner’s mentality, not just a vacationer’s mentality. Second homeowners love our area. They want to be a part of the community, share it with their kids, and contribute to our unique mountain lifestyle.
Our community needs second homeowners, but the second homeowners we have come to know and love and count as neighbors are being priced out. Many of them cannot afford to own a second home if it sits vacant for most of the year, and if we don’t want them to turn to short-term rentals, what options do they have? None. So big money investors buy their place and turn a profit.
Shared ownership properties lower the barriers to second home ownership, helping a broader pool of aspiring second home buyers purchase real estate and become part of the community. Shared ownership properties also help relieve this pressure by consolidating up to eight buyers into one home, removing them from competition for moderately priced homes needed by the local workforce.
Shared ownership properties allow our diverse community of year-round locals and second homeowners to grow and thrive by allowing more people to become part-time locals, caring for our community in a way a renter or occasional vacationer will not.
What is shared ownership?
A shared ownership arrangement (also known as a fractional ownership) is a method of co-ownership of a property (home, condo, boat, etc.). Several families or people can share the ownership in an LLC partnership or as deeded tenants in common. The use and the cost of the property is shared equally. Most shared ownerships, whether an LLC or tenants in common, have an operating agreement; a contractual agreement among all the shareholders. It defines the use of the property, including management, maintenance, budgeting, use scheduling, house rules, etc.
How it works
Owners purchase a deeded share in a residence (usually between 1/4 to as small as 1/8 share) that gives them a certain amount of use time per year at the property. The amount of use time is based upon the size of the share and is spread throughout the year.
For example, a 1/4 share provides 12 weeks use, a 1/8 share provides 44 nights use per year. Fractional ownerships differ greatly from the old-style timeshares because owners of the ‘share’ are either deeded owners of the property or members of the LLC that owns the property. This gives the owner rights to the property, the equity, and more use time at the property. Shared ownership also differs from short-term rentals which are owned by individuals or corporations who rent out their property by the day or week to vacationers using property management companies or platforms such as Airbnb or VRBO to advertise and book their property.
Our community needs more part-time locals
In vacation destinations such as ours, the cost of homes has risen dramatically in the last decade. This spike in prices has left many people out of the market. It has also led to many investors capitalizing on the situation by purchasing vacation homes and resulted in second homeowners using short-term rentals to cover their costs.
Many vacation destinations have enacted rules, ordinances, and even bans on short-term rentals because of how they contribute to the housing crisis and harm the community, and the Tahoe-Truckee community is no different. There should be regulations on short-term rentals in our area.
Shared ownership properties are not short-term rentals. Our community thrives because of second homeowners, and shared ownership allows more people to become second homeowners and part-time locals who care for and participate in our local community.
Greg Rankin has been a North Lake Tahoe resident and real estate agent since 1980.
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