In tourism-driven Tahoe, hotels are turning into homes
After getting divorced, Jazzmin Pereschica moved out of the four-bedroom townhome she shared with her ex-husband and five children and began the search for a new home in South Lake Tahoe.
As a newly single parent, a majority of the three-bedroom rentals she came across were outside of her price range. At the same time, Pereschica found herself getting turned down by landlords who said her family was too big for a two-bedroom apartment. Others said they didn’t want to rent to a single mom with children.
After she exhausted all her options, Pereschica, who works full-time at a local grocery store, made a tough decision: She moved her family into an old motel that had been converted into long-term housing.
“I started out in a one-bedroom motel room with a plywood counter for a hot plate, toaster oven and microwave I bought myself. Cold food I kept in coolers and a tiny mini fridge,” said Pereschica.
The rent was $950.
When another unit became available — this one made by knocking down a wall between two motel rooms — she moved her family again. This one had a kitchenette, and rent jumped up to $1,100.
“There was extensive mold damage, which I didn’t actually discover until I went to move out, but there was always a smell” said Pereschica. “We had to do ‘mice checks,’ meaning when coming home or waking up no one move or get out of bed before I check for mice.”
Then came the bed bugs and issues with drinking and domestic violence from neighbors.
“I even had to call adult protective services to ensure an old man was taken care of properly,” said Pereschica.
Throughout the ordeal, the owner of the converted motel was “gracious,” said Pereschica, and would reduce her rent when she had to deal with these issues. For that reason she did not want to publicize the name of the former motel.
“A motel conversion was our only choice. I don’t know what we would have done without it. It was the only place that would give us a chance. The living conditions were substandard, but it was a stepping stone and that’s the case for a lot of people,” said Pereschica. “These places and the owners need assistance to create better living conditions, not more laws.”
In January Pereschica moved down to Carson City where she found a nice three-bedroom home for $850. She commutes to her job up in Tahoe.
“I tried so hard to stay in Tahoe, but it wasn’t meant to be.”
Pereschica’s story is not unique. On Lake Tahoe’s South Shore, housing costs are on the rise coupled with limited inventory as more homes are bought by second-home owners or converted to vacation home rentals.
As a result, residents began turning to old motels that were seeing lower occupancy rates.
In 2015, the city of South Lake Tahoe started a program to address the growing number of unpermitted hotels and motels operating as long-term rentals. The program allowed for a grace period of one year for operators to comply with new regulations like mandatory areas to prepare food and wash dishes, adequate heating systems, smoke detectors and occupancy limits.
Compliance has been slow.
Over the last three years, the city has received 43 applications from motels seeking certification as long-term housing. To date, 14 of the properties, totaling 223 units, are certified. That’s up from zero approvals in 2015 and 2016, and nine in 2017. The city estimates 575 units could be certified by 2019.
Kevin Fabino, Development Services Department director, said the process of getting owners to make these changes has been “challenging.”
“Many owners are well aware that their properties are in poor conditions and in need of repair,” wrote Fabino in a staff report. “Because some of these owners seem less inclined to voluntarily comply we have had to use enforcement measures to gain health and safety code compliance.”
The condition of these motel conversions runs the spectrum.
In a presentation to council Tuesday, city staff showed photos of the “worst of the worst” — mechanical rooms converted into living spaces — but also well-maintained hotels that complied with all the program’s qualifications.
But some say the city’s requirements for conversion are too strict — and costly.
At Tuesday’s meeting, South Lake Tahoe resident John Messina told council he knows of four motel owners — who wished not to be named, he said — that evicted their long-term tenants due to the “Draconian” requirements of the conversion program.
“One of the evicted tenants lives with me right now,” said Messina. “The city should have made some arrangement to provide financial assistance [to the motel owners]. It’s not because they don’t want to. It’s because they can’t afford to.”
John Beltramo went through the city’s approval process for transitioning the Matterhorn Inn on Lake Tahoe Boulevard to long-term housing. He disagrees.
“I think that the building department has been very reasonable. They are focused on public safety and health issues. In order to do a conversion, you have to spend some money in order to do it in a safe, clean way to provide a decent place to live,” said Beltramo.
“I question whether some of these motel owners have the financial means to update their circuit boards when they are collecting $800-$900 a month for some rooms that I’ve seen that are basically rat-trap motel rooms. I think the money is there they just need to be pushed in that direction.”
Mayor Wendy David praised the program’s progress.
“You’re solving two big problems: one of motels that are not habitable and providing long-term [housing]…it’s huge for our community. It’s huge for affordability,” said David.
Heidi Hill Drum, CEO of the Tahoe Prosperity Center, however, does not see the conversions as a long-term solution to the region’s lack of affordable housing.
“I think in some cases it has been extremely successful. The Matterhorn is a great successful example. They invested in upgrading the rooms in a really nice way, and I think the fact that it is fully leased is a huge success,” said Hill Drum. “But in the long run our community needs actual revitalization and redevelopment.”
Hill Drum said TPC would like to see the old motels torn down and replaced with mixed-use, multi-family dwellings. It’s the sort of development the nonprofit is working to create through its Housing Tahoe Project.
“We are narrowing down which developer and project site to use right now,” said Hill Drum. “We are putting all the partners together to make the project pencil out.”
The housing could be a mix of market rate and low-income affordable. Hill Drum hopes the project will become a model for other developers to follow in the basin.
“I think it’s important to note that we are working on housing for local workers,” said Hill Drum. “If you have a job here locally … you should be able to live here locally.”