Future of affordable housing, real estate market discussed at Truckee forum
TRUCKEE, Calif. — Good Morning Truckee, a community forum presented by the Truckee Chamber of Commerce, was held early Tuesday morning to discuss the future of projected programs for the area, as well as host keynote speakers who highlighted what the community can expect to see in the coming months with mortgage rates and real estate.
One of the projected programs for Truckee, the Envision Tahoe program, is a 12-month economic initiative focusing on a complex resiliency strategy to unite Tahoe’s communities to strengthen regional prosperity. Along with this proactive initiative to help communities be less dependent on seasonal tourism, one of the plans is to also include affordable, workforce housing down the line.
“The Envision Tahoe effort is to take the community data and information we’ve collected and figure out what our strengths are in the region and how we can better plan for the future that is not so dependent on tourism,” Heidi Hill Drum, CEO of the Tahoe Prosperity Center said during the meeting. “We don’t necessarily want to see that we are 72% dependent on tourism. We know that tourism will always be an economic driver to our region, so we are working on how to make it sustainable, ensure that the workers in that industry have good jobs, along with our communities’ other industries.”
In 2020, tourism workers around the Tahoe Basin felt the effects from the pandemic, including significant loss of jobs in the industry, ultimately leaving many businesses forced to close their doors for extended periods of time during what is typically peak season.
“In 2010 our economy was 42% dependent on tourism, and in 2017 it was 62% dependent on tourism,” Hill Drum said. “In March 2020 when the pandemic hit, those impacted the most were of course our tourist workers.”
One of the positive data points that was discussed during this meeting was that the Truckee/Tahoe region is overall highly educated in comparison to other nearby regions.
“We have a lot of college graduates and those with advanced degrees in our area, and that’s a positive thing when we are looking at expanding opportunities in other sectors,” Hill Drum said. “Companies that might want to start up here or want to hire locally could successfully do that because we do have a highly educated workforce.”
While the Envision Tahoe initiative highlights community resiliency, one issue that many locals are struggling with is skyrocketing home prices for the average income earner in the area.
“Tripling of [home] prices in the last nine years with the average median home price around $1 million is unaffordable for a worker in the tourism industry. The average wage for someone in our region is about $53,000, that equates to a house that’d cost about $160,000, and I can assure you I haven’t seen anything on the market in that range,” Hill Drum said. “Even doubling that average median income for a dual-income family it’s still incredibly challenging to find a home that’s affordable. The housing crisis is real.”
While the Envision Tahoe program is working towards a resiliency strategy through multiple moving segments, affordable housing is at the forefront of this program. Jeff Brown, owner of Tahoe Mountain Realty, shared his expert insight into the changes and activities that he’s seen in the real estate market recently, and his projections on affordable housing possibilities in the future.
“So much of what the real estate market is has to do with momentum, as opposed to an objective truth of good or bad,” Brown said. “What we’re seeing right now is really, eerily normal in a decade-long span of time,” Brown said.
Brown added by exemplifying the current real estate market in comparison to the recession back in 2008. In this example, he said that if the community did see a price erosion proportional to the recession of 2008, there would be a 40% regression of housing costs, and the median home price would ultimately fall back to where it was in June 2020.
“I would venture to say that most people that bought a home in the last 26 months since that moment had a pretty good idea, they were making an irrational purchase,” Brown said. “They were not buying based on speculation that they were going to be sitting on a pile of equity. The point being: [there’s] not a lot of distress out there in the market.”
Looking towards the near future of the housing market, Tahoe economies are affected differently than the typical market, primarily due to the significant number of second homeowners in the region.
“For better or for worse, because we are dealing so heavily in second homes and our consumers are so wealthy, particularly at this moment in time we really aren’t that driven by interest rates,” Brown said. “The threat of interest rates going up has had almost no impact on affordability in our area; ultimately underscoring that we are still so far away from affordability in the region. Even if we did have that proportionate reduction in values, there still would not be affordability for the typical worker.”
While affordable housing for Tahoe’s local workforce isn’t looking optimistic with current housing market trends, the Envision Tahoe program is still avidly working towards bridging the gap in the future to provide year-round residency to locals, which will ultimately grow Tahoe’s year-round economy.
“We see housing as economic development, it’s a foundational strategy to ensure future economic resiliency,” Hill Drum said. “If we have a wide range of housing opportunities for our local workforce and they can stay and work where they live, then we know we’re going to have more of a thriving community. If we have year-round residents, we can change the structure of our local economy to bring year-round spending to our local businesses, rather than business owners needing to make their money only during peak-season months of the year. We can have a year-round, thriving community.”
For more information on the Tahoe Prosperity Center’s Envision Tahoe program, visit: https://tahoeprosperity.org/envision-tahoe/.
Madison Schultz is a reporter for the Tahoe Daily Tribune, a sister publication of the Sun. She can be reached at firstname.lastname@example.org.
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