Everyone complains that we don’t have enough workforce housing. We all know that land and construction costs are high in Tahoe. But there are other issues as well. My current and largest workforce housing project to date will be a 62-unit mixed use community on Jibboom Street in Truckee, and I have offered to triple the number of workforce units than what is required. Yet the project has been in the entitlement process for 7 years.
Another example of why we don’t see workforce housing being developed is the Dollar Hill Apartments, a workforce housing project I developed in 2021. Rents average $1,600 per unit and if I wanted to maximize my return, I would have sold the units as condos for $500,000 per unit. That means renting takes about 26 years to make the same revenue from selling condos as second homes.
Next, consider all the fees associated with developing workforce housing. Special districts such as the Town of Truckee, utility districts, TRPA, Tahoe-Truckee Sanitation Agency, and the school district, to name a few, all have their own fee schedules and often separate permit processes as well. At the Dollar Hill Apartments, I paid $173,000 in fees or 7% of the property value. Meanwhile, a $20 million lakefront speculative home pays $44,000 (0.2% of the value) and an $8 million Martis Camp home pays $33,000 (0.4% of the value).
From a revenue and fee perspective, our current system provides incentives to build luxury homes.
Redeveloping an existing structure into workforce housing can take 2 years to complete; the building permit process alone consumes the entire first year before construction can begin. The timeframe of a redevelopment project pales in comparison to a ground-up project such as Jibboom Street. These projects can be burdened with many public meetings and, typically, only those who oppose the project attend the public hearings.
There is no financial, political, or social incentive to build workforce housing and that must change if we are going to house our own.
There have been a few well-intended programs adopted in the last couple of years, including Placer County’s Workforce Housing Preservation Program, Truckee Home Access Program, and a Joint Powers Authority called Truckee Tahoe Workforce Housing Agency, but they have yet to make much of a difference and tend to have onerous conditions, or the initiatives themselves are underfunded. These initiatives fight for a small pool of TOT dollars when the larger source of money comes from property taxes. The rapid appreciation of home prices that pushed out much of the workforce resulted in a property tax windfall that should be used to aggressively fund workforce housing initiatives. An existing home that resells creates a higher property tax annuity without an increase in demand for public services.
Some things that can be done:
Fee chargers must modify their structure, placing a smaller fee burden on workforce housing developments, eliminating the fee penalty.
The entitlement and permit processing timelines must change so that a qualified workforce housing development is fast-tracked. The jurisdictions need to remove the arbitrary decision process in favor of an objective process for development and one that truly encourages workforce housing in a partnership with the developer.
The community needs to do its part by showing up to support workforce housing development. The loudest voice in the room tends to be the neighborhood NIMBY citing their years of residency as a superior right to oppose a development.
The state of California is not waiting around on local jurisdictions to change. The Housing Accountability Act has been strengthened recently and its primary effect is to limit local governments’ ability to disapprove or delay housing development projects for arbitrary reasons. It is the most important set of pro-housing laws in California. The state is leading by example with its meaningful pro-housing laws, and if local jurisdictions do not follow suit, they will eventually be removed from the process entirely.
~ Sean Whelan has lived in Tahoe City since 2011, and developed workforce housing projects in the Truckee Historic District in 2014 and Tahoe City in 2021. He is the coach of the North Tahoe High School baseball team and served as the Creekside Charter School Board president for 6 years. To learn more, visit residencesatjibboom.com.
What if TRPA let go of its block of California’s SB-9?
Would that help?
Also — is there a formula to estimate the value of Workforce Housing?
The TRPA may value it in “Commuter Miles saved.”
Employers may be able to place a dollar value on lower absenteeism during bad weather. Or more efficiency in the workplace when the workforce reports refreshed w/o a long commute.
Is anyone studying or working on that?