Why are gas prices always so high? And what can we do to get them lower?

Gas prices [across the country at least] are historically affordable right now, far lower than 2011 to 2014 when the U.S. saw average prices of over $3.50 per gallon and far lower than 2008 when the all-time record of $4.11 per gallon was reached. What motorists can do — collectively — is reduce their demand for gasoline and shop around for the stations that pass along savings in the form of low prices. There are many factors that go into gas prices that motorists have less control over — taxes, OPEC policy, oil production, U.S. policy, etc. Geopolitical factors can also drive prices. At the end of the day, motorists really can do the most to limit future prices by curbing their demand — but as prices have been lower since 2015, did you know U.S. consumption of gasoline has risen again? And, fuel-efficient vehicle sales have been lower as new car buyers have generally purchased larger vehicles.

Lake Tahoe’s prices (and this applies in other areas as well) may be higher because:


1) Affluence of area — in areas where incomes tend to be high, motorists are less price sensitive. Stations know this and may keep their prices higher.

2) Cost of business — an area’s property values may mean more overhead for a gas station, but this shouldn’t be a big cost factor.

3) Rural area — gasoline likely comes hundreds of miles and costs more to truck in.

4) Less competition can mean higher prices — being a smaller town, Lake Tahoe doesn’t have as many gas outlets as larger cities, so there’s less pressure on being competitive.

~ Patrick DeHaan, head of petroleum analysis, GasBuddy

For a local comparison of gas prices, Kevin Smith, general manager of the Truckee Tahoe Airport District, says the agency currently pays $3.29 per gallon for 87 octane automotive gas, and $4.35 for diesel after state and local taxes. Before tax, 87 octane is $2.75 a gallon. Smith said the airport briefly looked into selling gas to the public before he was employed there.

“As we are in the gas business extensively, it is something we could do legally and logistically but we have not looked into it in any level of detail,” Smith wrote in an email to Moonshine Ink. “We also have not had much constituent interest in it. If we had constituent interest in the topic, it is probably something we could discuss with our board of directors.”

Moonshine also reached out to Cox Family Stores, which owns the Shell stations in Tahoe City and Truckee. They declined to comment but wished us “Happy Holidays!” ~ SS

Do development impact fees hinder achievable local housing being built in our area?

Fees do not typically hinder the building of achievable local housing, but they can influence where development occurs and the type of housing constructed; lowering of fees could contribute to breaking down the barriers to achievable local housing if combined with other cost-lowering strategies. For example, in the Truckee/North Tahoe region, Kings Beach has the highest development fees while Donner Summit has the lowest. This could influence where development occurs rather than based on areas that have the highest need.

Housing stimulation is largely driven by market forces (national and regional economic health), which influence sales price, costs, and interest rates; rather than by development impact fees. If, however, other costs are homogeneous, fees can be a deciding factor where to develop and can make the difference in financial feasibility. Rather than fees, the greatest cost component to building housing in our region is construction costs. For single-family homes, fees are only about 5 percent while construction costs comprise 56 percent of total costs. For multi-family housing, fees are only about 6 percent while construction costs comprise 76 percent of total costs.

~ Seana Doherty, project director at Mountain Housing Council of Tahoe Truckee

Is it true that these fees are higher than other areas? Or are more complicated? Why?

Hansford Economic Consulting’s regional fee study found, when compared with other selected regions (Reno, Folsom, Palo Alto, and Sunnyvale), the Truckee/North Tahoe region’s fees for a single-family home are comparable to San Francisco Bay Area fees, but higher than the City of Reno’s fees due to different state laws for fee charging authority. While fees in our region are high, they are in line with fees with other California communities. National surveys show California leads the nation in imposing fees on new residential development.

In contrast, fees for multi-family housing in our region are much higher than the three selected California comparison communities (Folsom, Palo Alto, and Sunnyvale). Again, these fees were even lower in Reno. Our region’s fee landscape is quite complex due the number of different fee chargers (18) and varying bases for assessing fees (per square foot, per unit, per meter, per bedroom, or per fixture).

~ Seana Doherty

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