Workforce housing: What role does the employer play?
September 16, 2016
SOUTH LAKE TAHOE, Calif. — It's not a new story, but it's an important one.
Workforce housing, affordable housing, low-income housing — these are terms that we are hearing more frequently as the discussion about keeping Lake Tahoe employees housed in the community in which they work heats up.
Ask any Lake Tahoe local about the issue with housing, and they can likely spout off a slew of Basin-wide issues that tie into the shifting real estate landscape: low-wage seasonal work, developmental restrictions due to environmental preservation, second-home owners and vacation rentals, high rental prices, and low (and often poor quality) housing inventory — to name a few.
The Basin's housing issue is not unique, however — other resort towns are experiencing the same problems, and employers are scrambling to find solutions.
Back in December, Vail Resorts made the news when they informed their Summit County, Colorado, employees that two-bedroom apartments in employee housing that currently quarter two occupants could now accommodate four, and three-bedroom units could house up to five people.
This effort to address the workforce housing shortage in Breckenridge and Keystone — a voluntary program, according to Vail Resorts — was not well received by employees, who complained of already small quarters.
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The announcement came shortly after Vail Resorts promised $30 million to employee housing projects around its resorts in Colorado, Utah and California.
This past June, Vail Resorts announced one of those projects — a parcel near Keystone would be leased to Gorman & Co. The developer would use it to build up to 200 affordable units for seasonal workers earning $10 to $12 an hour and for families earning year-round salaries.
In the Tahoe Basin, Vail Resorts owns Heavenly Mountain Resort, Kirkwood Mountain Resort and Northstar California Resort. Heavenly and Kirkwood both offer employee housing, but according to Heavenly's website, "the majority of our employees live outside of employee housing."
"Many employees also choose to temporarily live in motels throughout the season," reads the website.
Vail Resorts told Tahoe Daily Tribune that all three Tahoe ski destinations "are committed to partnering with community stakeholders to find short- and long-term solutions to this shared challenge" of workforce housing, but the company did not respond to questions about future employee housing development in the region.
Despite having some workforce housing options in place throughout the Tahoe Basin, there is not enough to meet the demand.
Last winter there were people who were employed locally sleeping at the homeless shelter, the Warm Room, according to Nicole Zaborsky, board member of Tahoe Coalition for the Homeless.
"We did not formally collect employer information, full- vs. part-time employment, or other employment data from our guests. Anecdotally, some guests told us they had money to afford a rental, but couldn't secure one due to a low amount of rentals vs. a high volume of applicants," said Zaborsky.
"Others appeared to struggle with housing costs vs. other costs of living. Some did not work an adequate amount of hours per day or week to knowingly get into a rental commitment."
Data from the Truckee Tahoe Community Foundation's housing study revealed that of the 1,040 employees surveyed in the Truckee and North Tahoe region, 77 percent that lived within the study area reported paying greater than 30 percent of income to housing, 32 percent pay more than 50 percent of their income to housing costs, and 10 percent are currently on waiting lists for market rate and affordable housing and/or ownership assistant programs.
John Packer, spokesman for Harrah's and Harveys Lake Tahoe, said a lack of housing options makes it difficult to attract employees from entry level to higher-ranking positions at the casinos.
"They get here and they are interested in employment, then they see the housing situation and they change their mind. I just know that it's a problem for every business around here, particularly when you get into the mid-level executive positions and management positions," said Packer.
"We realize that it's a problem, but any kind of property in and around the South Shore is expensive to try to do something like that," added Packer, in reference to the development of employee housing.
But it's not just employees of large corporations who are struggling to find suitable and affordable digs, according to the Truckee North Tahoe Regional Workforce Housing Needs Survey.
"The summer represents peak employment season for a large number of small employers, representing a diverse array of business concerns," stated the report.
And although 48 percent of surveyed employers stated that a lack of suitable housings for their employees "significantly" impacts their business, only 20 percent of respondents provide any type of housing assistance to their workforce.
Ted Kennedy, a partner in a handful of restaurants like Base Camp Pizza Co., AZUL Latin Kitchen, and Lakeside Beach House, recently purchased a home for his nephew and two other employees to live in.
"It is the plan going forward if it works, and it seems to be, and that would be to buy some places and fix them up for our employee housing," said Kennedy.
According to Kennedy, of the roughly 330 employees in his restaurant group in South Lake Tahoe, around 320 rent. He, too, has lost potential hires due to a lack of suitable and affordable housing.
"I'm always skeptical of government involvement in market affairs, but I also don't want to see our lovely town become another Aspen where none of us that work here can afford to live here," said Kennedy.
"Perhaps a combination of private investment in affordable housing with government assistance along with government relaxing restrictions on construction and coverage requirements could help."
Gerry Flynn, former Vail Resorts CFO, is now a managing partner with Polar Star Properties in Colorado, a company that works primarily with employee housing efforts in resort communities.
Flynn was the developer of Northstar's former 96-unit workforce housing complex, which went under during the economic downturn in 2009.
"It's a pretty steep learning curve to do affordable housing in the resorts. Lot so people have tried and failed," said Flynn, who has 25 years of experience under his belt.
"The lack of housing for the workforce is quite a problem in most of the resort towns. I think the reason it's such a hot topic today is that it's that much more difficult to do with the increased cost of construction, and the approval process at the [Lake Tahoe] is definitely difficult," noted Flynn, pointing to state and local hurdles that prolonged the process during the construction of Northstar's employee housing.
"You need to identify the stakeholders, whether its employers, landowners, the government — and they need to collaborate," said Flynn.
"We're seeing it happen here in Vail. People recognize that this it the utmost priority."