Rising rents force creativity
March 7, 2006
Sierra-at-Tahoe’s seasonal rental house comes across like a Real World episode: 10 people – including two couples – from the United Kingdom, Australia, New Zealand, Canada and Argentina and Atlanta.
No, it’s not world peace in action, it’s the reality of Tahoe’s rental market that brings them together.
“We’ve got a potpourri,” said Evan McClellan, risk manager for Sierra who lives in a separate suite in the house and helps collect rent. “A lot of them will have two and three jobs. They will work here and in the Stateline area at the casinos, 15 to 18 hours a day and burn out. But they love it.”
The workers, all young adults, pay $320 to $360 a month for a bed in the eight-bedroom pad in Meyers.
And that’s the only way McClellan can imagine their affording to live here.
Rents are creeping up about $50 a year, under pressure from higher mortgages. Still, they haven’t moved as much as home prices, said Chris Chandler, property manager for Coldwell Banker McKinney Associates.
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“The rents in Tahoe pale in comparison to what the real estate prices have done,” Chandler said.
April generally sees a supply boom in the market as winter rentals vacate.
He estimated a competitive rate today for a three-bedroom, two-bath home with garage would be $1,200.
His counterpart Keely Stewart at Tahoe Rental Connections was not far from him, estimating $1,300 for the same home.
“At a lower price, you’ll draw your nice stable family, you will have more candidates and applicants,” Stewart said. “The point is the higher you go, the more you limit the types of applicants you get.”
They’ve both seen new second homeowners try – and not get – a higher rental price before settling for the market rate.
And the housing market is showing signs of slacking.
Keely said their rents from four years ago have gone up 15 percent. Chandler also estimated a 3 to 5 percent a year rise.
They both discourage owners from raising prices for reliable renters: you never know what – or how many – you’ll get in their place. Seasonal workers from other countries often don’t have credit reports or co-signers, and pile into homes without letting rental managers know.
McClellan said their rental is working out well with Sierra on the lease. They are looking for similar homes to rent next winter.
The typical seasonal workers’ pay has not kept pace with the higher cost of living. Ski resort workers, restaurant and service people and casino staff for the most part make between $6.50 and $9 an hour, or less than $1,000 a month after taxes.
In 2000, the median price someone was paying in South Shore for rent was around $600, with only 30 households paying more than $1,300 per month, according to http://www.city-data.com, which compiles information from government reports.