It is no secret that there is a workforce housing crisis in the Lake Tahoe region. While every public agency seems to be aware of the problem and talks about taking steps to alleviate it, individuals and small businesses in the trenches report that they run into a buzz saw of challenges and red tape that make the process of creating housing nearly impossible.
One of those frustrated people is Scott Stine. Years ago, he was lucky enough to rent a small, inexpensive cabin that was part of a larger group of five cabins in Homewood. It was one of the only places around that he could rent for cheap. After renting for a year, Stine went on to purchase the lot of five 300-square-foot cabins. They were built in 1910, are tiny, and need lots of work, but have always been popular with long-term renters because they give each person his or her own space to get away from roommates.
“I kept the local thing going, kept the rents cheap, and everyone is happy with their little space,” Stine told Moonshine Ink. “But then I decided to upgrade the units to make it nicer for a local to rent, and it has turned into this huge disaster.”
Stine went to Sagan Design Group to help him get through the process of obtaining permits to upgrade the units. (The permit process itself is yet another part of the problem. It is so complicated that an owner looking to make improvements that require permits has to hire an expert to navigate through the process).
“They told me it should take a year to get a permit. Here we are five years later, and no permits,” Stine said. “It took a year and a half with the fire district to approve the plans, and the [Tahoe Regional Planning Agency] took forever because the cabins are historic.”
When Placer County approval was finally obtained, Stine was told that his time had expired on fire district approval and that new, more-stringent codes had been instituted.
In another potentially expensive complication, Stine was told he would have to install a 1000-foot water line to a fire hydrant. He had to hire a water location expert who found a water line that would be much less expensive to build right behind the property.
“There are all sorts of little things like this that have really held up the process,” he noted.
Sagan Design Group’s Rick Thompson said the project has been challenging partly because the dilapidated conditions of the current cabins required relocation and new construction. In addition, the lot’s close proximity to other properties and tight access made the fire department requirements difficult and expensive.
“Stine’s efforts have been humongous,” Thompson said. “Hopefully all this is going to work for him.”
And it’s not just the delays in getting approvals that have been frustrating. “When we started the project, building costs were much lower,” Thompson explained. “It’s ridiculous how much they are going up. It’s up to $600 a square foot.”
No matter how you slice it, that is a lot of money to spend, especially when your desire is to rent the cabins to locals as long-term rentals.
A true irony of the situation is that as Stine is trying to get approval to keep long-term housing in our community, the lack of affordable housing is partly what inflates the cost of construction: A shortage of tradespeople living in the area has driven up labor costs.
“There is a real permit crisis,” Stine said. “They are literally making it economically infeasible to do it. After the cost that I’ve incurred trying to get permits, I might not be able to rent them to locals anymore. I’ve spent $100,000 already and don’t even have a permit.”
Stine estimates it might cost close to a million dollars to finish the project — if he can get the permits. He currently charges $750 a month for the small units.
“I don’t want to be a huge drag on people’s income,” he said. But after spending that much money, even doubling the rents might not be feasible.
Stine expressed frustration with his sense that public agencies don’t care about how much things cost and that they act like it is a cost the owner can just pass on to others.
“We are trying to keep the local thing going,” he said. “I’m offering the housing that we need.”
