Lake Tahoe has a people problem: how a resort town became unlivable

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Late last year, Lake Tahoe earned a spot on an exclusive travel guide. But the mountain destination, famed for its cobalt blue waters and Olympic-quality ski resorts, wasn’t there for the reason you’d think.

Fodor’s “No list” highlighted beloved getaways that needed a break, and Tahoe was up there with the neediest. Citing a pandemic influx of remote workers, second home buyers, traffic gridlock and packed beaches, the guide concluded “Lake Tahoe has a people problem”.

While not everyone agreed with the guide’s blunt recommendation, the superlative spoke to a reality that’s become impossible to ignore: Tahoe had changed significantly in the pandemic years and many locals say not for the better.

Signs of the region’s popularity are evident all around its tree-lined shores in the form of endlessly booked short-term vacation rentals and for sale signs that popped up outside modest family cabins and multimillion-dollar chalets alike. As Covid surged, new residents had flocked to the towns and cities along the lake, sending real estate prices soaring to staggering highs. Prices doubled and even tripled in some areas – median home prices in the basin climbed from $345,000 in 2012 to $950,000 in 2021, according to a report from the Tahoe Prosperity Center.

During the pandemic, tourists flocked to communities like South Lake Tahoe, California, bringing traffic and packed beaches. Photograph: Bloomberg/Getty Images

Homeowners cashed in on the demand. Rents rose and the housing shortage grew more severe, pushing locals east to more affordable cities such as Reno and Carson City. In turn, local businesses struggled with a depleted workforce. Ski resorts looked to campgrounds and tiny homes to house workers while short-staffed restaurants reduced their opening hours.

“It’s been getting progressively worse,” Clay Kuecker, a lifelong resident, said while sitting at the bar of a restaurant on the lake’s north shore. “The market is so tight and the demand is so high [sellers] get whatever they want. Renters cross [their] fingers and hope the owners don’t sell.”

The story of Lake Tahoe is a microcosm of what’s happening in communities across California and the US, where longstanding housing problems have been intensified by the pandemic. The resulting upheaval has fueled fear and uncertainty about Lake Tahoe’s future, and forced the area to confront a difficult question: who is Tahoe for?

“It’s hard to stay here,” said Heidi Hill Drum with the non-profit Tahoe Prosperity Center. “The only way to get our community back is to build housing for people who are the backbone of our economy: the tourism workers. We’re not helping them right now – not enough.”

Constant stream of tourists

Every year about 15 million people travel to Tahoe to enjoy the lake or snowboard and ski at the area’s world-class resorts – a larger number of visitors than Disneyland, Yosemite national park or Napa Valley wine country. On a recent December day, the snow-covered streets were filled with large groups of tourists on their way to the shores of the lake or pizza joints and Mexican restaurants after hitting the slopes.

Tahoe also serves as a playground for the rich and famous – Kim Kardashian, Justin Bieber and members of the Real Housewives are among its most famous visitors. The constant stream of tourists keeps communities around the basin, which straddles five counties across California and Nevada, bustling year-round.

The millions of visitors are sustained by a population of just 56,000 residents who keep the community running by working in law enforcement, fire departments and at local hospitals, staffing restaurants and ski resorts and teaching students. Those who have settled here permanently were usually drawn to the area’s natural beauty and outdoor lifestyle. Countless residents share stories of coming for seasonal jobs and deciding to stay, despite the intense winters, limited job opportunities and housing challenges.

People have continued to settle here even as environmental pressures have mounted, including fast-moving wildfires that have threatened entire towns and severe winter storms that have knocked out power and cut the area off from the outside world for days on end.

“The winters can be rough. We joke we have some of the most overeducated bartenders and servers in the nation. It’s a choice you make to live up here, to just make it work,” said Alicia Barr, the co-founder of FiftyFifty Brewing in Truckee.

Often those who came to Lake Tahoe for seasonal jobs and decided to brave the intense winters, limited job opportunities and housing problems. Photograph: Mario Tama/Getty Images

But, by design, growth in Tahoe has been relatively slow, and the region’s housing challenges started before the Zoom town boom or the rise of short-term rentals. There is a limit to how much housing can ever be constructed in the basin, as well as height and coverage regulations to preserve the natural landscape. Those factors make it challenging to complete projects in the region, said Meea Kang, an affordable housing developer who has worked in Tahoe – a perspective shared by other developers.

“We have extremely high land costs, compound that with some of the highest construction costs in the whole country and you have limited actual locations for those projects. It makes it extremely difficult,” said Daniel Fraiman, a developer in Tahoe.

In the mid-20th century, when the area served as a getaway for stars such as Frank Sinatra and Marilyn Monroe, planners envisioned a city the size of San Francisco on the shores of the lake with freeways around the basin and bridges across the bay. At the time the area was growing rapidly, and haphazardly, with developers filling in wetlands and the clarity of the famously clear lake quickly declining, said Jeff Cowen with the Tahoe Regional Planning Agency. The planning agency was established in 1969 to regulate development in the basin and protect the environment of the lake.

Lake Tahoe’s population was on the decline for 20 years, but reached a record 60,000 in 2000. Photograph: George Rose/Getty Images

Still, Tahoe managed to grow, its population reaching a record 60,000 in 2000. At that point, unlike some other famed resort communities, homes in the area hadn’t yet surged to unaffordable levels.

“When I moved here in the early years, you could find a house pretty easily. You could go on to Craigslist and ask around and rent a place,” said Fraiman, who is also a planning commissioner in Truckee. “You used to be able to find a room in a house that somebody who was making a regular wage could afford,” he said. “The property values have not come back down and I don’t know if they ever will.”

The area’s population was on the decline for 20 years, particularly after the great recession in 2008, but the area’s housing challenges began to pile up amid strict housing regulations and vocal opposition to affordable housing projects. Between 2012 and 2021, the region expanded its housing inventory by only 1%, most of which were large, expensive homes for second-home owners.

Drum and others point to both the opposition to affordable housing efforts and strict rules around development to explain the shortage. Tahoe has struggled to balance its efforts to preserve the environment and support those who live there.

“We don’t have a good track record of doing both. We talk about the triple bottom line: economy, the community and the environment. But we don’t have a good track record of balancing that,” Drum said.

“We haven’t built enough homes for our workers, for our local residents. We haven’t kept pace for what our community needs,” she said.

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