Tahoe Housing Trouble Part 2: Employers cite housing for inability to find employees
August 13, 2018
Editor's note: This is part 2 in a three-part series examining the housing issues here in Tahoe and other areas. Part 3 will run in the Aug. 17 edition of the Tribune. To read part 1, visit http://www.tahoedailytribune.com.
Even on the busiest weekend, drive through a Lake Tahoe neighborhood and you're likely to see some houses with the lights off and curtains drawn, locked up for months at a time. Growing second home ownership has helped contribute to a shrinking inventory of available housing.
Since 2003, second home ownership in the Tahoe Basin has increased in all four Tahoe counties, according to data from Tahoe Prosperity Center (TPC).
The nationwide trend of rising home prices is not helping the situation. According to data from the U.S. Census, the median cost of a U.S. home in 1940 was short of $53,000 when adjusted for inflation. In South Lake Tahoe, median home price just passed the $500,000 mark, and that's low compared to the rest of the lake. In Incline Village, median home prices are closer to $1 million.
This isn't nearly as high as some areas in California, but Tahoe's job market lacks the high paying jobs found elsewhere. In 2013, more than 40 percent of jobs in the area were related to tourism, according to a 2015 report from TPC.
There are about 54,000 full-time residents in the Tahoe Basin, with population reaching about 300,000 on peak days, according to Tahoe Fund. With more than 3 million visitors a year, Tahoe has more visitors annually than Yosemite National Park, according to the Tahoe Regional Planning Agency (TRPA). While tourism plays a fundamental role in the economy, it's also making affordable housing options impossible for some locals to find.
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And that inability to find housing is making it harder for employers to find and keep employees. Though Tahoe's labor and housing shortage can't be blamed directly on one another, the two are closely related, and their impact is far-reaching.
Whether it's small businesses or some of South Shore's largest employers, industries across the board are struggling find and retain employees.
The Morning After, a new coffee shop on Harrison Avenue, was forced to open two weeks late because management could not find enough employees in time.
Plumbers, electricians and other skilled workers are hard to come by in the basin, with some customers waiting weeks before getting the service they need.
Kyle McSparron of Blue Sky Electric said he would hire one or two more electricians to join his team, given the opportunity.
"Right now I have more than I can handle, which is a great thing but I'm probably getting two or three calls a day where I'm turning down work," he said.
McSparron said he isn't sure if housing is the sole issue, because positions require specific qualifications. Research shows that less young people are interested in entering the trades, a trend that goes hand-in-hand with the nation's increasing demand for skilled workers.
According to the city of South Lake Tahoe General Plan, the city's biggest employers are Barton Memorial Health, Lake Tahoe Unified School District, Marriott Corporation and Lake Tahoe Community College (LTCC).
Despite being essential to the community and the local economy, even these industries struggle to retain employees.
Elizabeth Stork is the director of human resources at Barton Health, and said she knows of four people who left Barton because of they couldn't find a stable place to live.
"There's a lot of discussion about (housing) here at the hospital," Stork said. "I have some examples of people that I know about, but there could be others that we don't know about."
In the last six months, one of Barton's supervisors left because he and his wife couldn't buy a home. They made four offers, but were beat out by cash buyers, Stork said.
Some nurses have either moved out of state to buy the home they want or have turned down jobs with Barton.
Stork said the health care provider does what it can to help new employees find housing during their transition.
"We provide them both with property management information and Realtor info for people that are new," she said. "We do take into account cost of living when we assess pay scale."
On the Nevada side, casinos are seeing large proportions of employees commuting from off the hill.
About 35 percent of Harveys and Harrah's employees make the daily commute from Carson City, Minden or Gardnerville.
"We've lost employees to unaffordable housing both from a purchase and a rent perspective," said John Packer, spokesman for the casinos. "They can't find things within their range."
Packer said there is no formal resource for employees who need housing assistance, but that there are some referrals.
The public sphere also is feeling the consequences.
The Tahoe Transportation District is being forced to cut services not only because of unsustainable funding, but because the district can't hire, train and retain the drivers and maintenance workers it needs.
George Fink, transit system program manager at TTD, said while funding is an issue, labor is the most pressing problem. Despite raising pay 20 percent in June, TTD's pay cannot be as competitive as other transit authorities. Considering cost of living in Lake Tahoe, it makes working and living here less appealing.
A CHANGING SKI INDUSTRY
As housing becomes increasingly difficult for middle and low-income people, it is taking its toll on the ski culture that has had snow-lovers flocking to mountain towns for decades.
Historically, the cost of housing in California was comparable to other states. In 1940, the median gross rent hovered at about $420 (a mere $23 if you don't adjust for inflation). By the 1960s it was $570, and by the turn of the century rent skyrocketed to more than $1,000, according to data from the U.S. Census.
Unfortunately for many ski bums, this means the possibility of living the dream mountain life is, in some cases, less attainable than it was decades ago.
Après can be reduced to a luxury for vacationers, and employee housing is competitive at the resorts that do offer it.
Kirkwood and Heavenly, Squaw Valley Alpine Meadows, Boreal Mountain and Sugar Bowl offer employee housing, while Donner Ski Ranch and Homewood Resort have resources for international employees.
Heidi Hill Drum, CEO of TPC, said part of the organizations's goal is to make this mountain dream possible.
Like many locals, Hill Drum first came to Tahoe to ski for a winter, and soon found herself in love with the lake and the community.
Now years later, she has built her life and family in Tahoe.
"I had to work two jobs, but eventually I was able to get a better job and buy a house and start my family, but that's much less common now," she said. "I want the folks who value the lake lifestyle and want to live that way to be able to live here.
California's housing crisis is arguably the worst in the nation, with median home prices soaring upward of $1 million in the Bay Area. Though Lake Tahoe's isn't quite as stark for the middle and working class population, the basin's diverse economy presents a unique set of problems.
According to a 2018 report from TPC, "A balanced housing market would mean that 50 percent of households could afford to buy a median priced home," but in South Shore, just 25 percent or residents can afford the median priced home, and it's as low as 10 percent on the East Shore.
Other resort communities are seeing drastic shifts in home values and labor forces are experiencing many of the same problems.
In Bozeman, Montana, the median home listing price is $475,000 — and home value went up about 18 percent in just the last year, according to Zillow. In Park City, Utah, the median home value is about $710,000 and in Telluride, Colorado, it's around $850,000; roughly a 10 percent increase from last year. In Mammoth Lakes, California, it's estimated that 52 percent of homes are empty most of the year.
In 2010, about 55 percent of Tahoe's housing units were classified as "vacant," according to the U.S. Census. Close to 80 percent of these home were for seasonal and recreational use, and just 15 percent were available for rent.
This contributes to the contrast between locals living in motels or overcrowded rentals while homes sit empty, according to the Prosperity Plan.
In Eagle County, Colorado, home of Vail Ski Resort, business owners are reporting stunts in company growth because they can't find workers to fill positions. Whether it's in skilled or unskilled trades, companies can't find committed applicants who live locally.
Similarly, maintaining Tahoe's $5 billion economy is no easy task when nearly half of the region's jobs are in the tourism industry, which includes many unskilled positions that aren't high-paying.
The 2010 Prosperity Plan identified three sectors that make up two-thirds of the region's economy: tourism and visitor services, environmental innovation, and health and wellness. It states that while tourism is essential to the local economy and tax revenue, it also poses unforeseen housing problems.
With workforce and affordable housing units few and far between, it drives young people out of the basin.
Between 2000 and 2015, the proportion of 25- to 44-year-olds decreased more than 5 percent, as did the proportion of 0- to 17-year-olds, according to data from the U.S. Census. The proportion of 45- to 65-year-olds and those older than 65 went up.
Part of this demographic shift is attributed to baby boomers, but high cost of housing and lack of jobs that pay a sustainable wage are factors for younger generations, according to TPC's 2018 report.
Hill Drum said a possible solution to Tahoe's housing crisis will have to address these younger groups of people when considering the future of the economy, because Tahoe is not friendly to the first-time home buyer.
"We want residents to be able to live where they work. We don't want people to have to commute an hour," she said. "It's about redeveloping our community and having housing for the people that make our community and our economy run."