From city to mountains: Bay Area transplants in South Lake Tahoe

(FILE) Illustration of a person on a motorcycle going through the woods
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My hometown of South Lake Tahoe has experienced a major housing market boom, an event that led me with the impression that those of means were vacating cities en masse and buying up property in small towns.

Tales of people fleeing dense cities for regions with low COVID-19 rates have been widespread. New York City and San Francisco, for example, have each experienced plummeting median rent prices as residents escaped to quieter, less crowded neighborhoods.

But a mass exodus of city dwellers isn’t the only demographic shift we’re seeing come from this pandemic. The skyrocketing price of property in South Lake Tahoe can help us understand how small towns are impacted by transplants from cities, for better or worse.

Fran Faulknor moved from San Mateo to South Lake Tahoe when her husband’s job went remote last year — but not because they were worried about COVID-19. “For us, it was very much a lifestyle decision. Now in Tahoe, I can get up in the morning and hop on my mountain bike and do, like, an amazing hour-long mountain bike ride on great trails, and then come home and be ready to work,” Fran said. They had been wanting to move to South Lake Tahoe for a while — her job in real estate was remote pre-pandemic, and the small-town lifestyle was appealing. She and her husband have every intention of staying in Tahoe, even when the pandemic allows for a return to their physical workplaces.

Faulknor and her husband’s experience of moving to a rural area, however, likely does not represent the majority of those who have moved in the past year. According to HireAHelper, nationwide, 35% of those who moved due to the pandemic did so out of financial hardship, while almost a third did so in order to take care of family. There was an average reduction of floor space by 282 square feet, indicating the majority were not purchasing larger houses in rural areas. 28% of those surveyed reported moving for similar reasons to Faulknor and her husband — they no longer needed to live near their workplaces. People who were moving were not listing rural locations as top choices. The number one destination for HireAHelper’s clients moving out of San Francisco was Seattle, followed closely by major cities in other states. Proximity to natural spaces has become more important as people seek out safe activities under lockdown orders — South Lake Tahoe and Seattle both have strong outdoor cultures, a draw for remote workers.

Crucially, some outer cities in the Bay Area actually experienced a rent increase as transplants moved out of San Francisco. Daly City and Livermore, for example, saw marginal rent increases during this same time period. The overall trend was thus likely not an urban to rural shift. According to HireAHelper, there was a 20% increase over 2019 in move requests out of San Francisco.

“It’s going to change places like South Lake Tahoe a lot more than it’s going to change places like San Francisco,” said Joanna Reed, a lecturer in UC Berkeley’s sociology department. When we consider that San Francisco’s monthly rent has dropped a whopping 33.8%, we might assume this means there’s been a fairly significant change in renting dynamics for those living in the city. But that’s not necessarily the case.

The median rent for a one-bedroom apartment in San Francisco was $2,650 in March 2021. This continues to be close to double the cost countrywide, a significant burden on blue-collar workers who live in San Francisco. This, alongside nationwide layoffs and lack of safety net for poor people, likely hasn’t changed much about rent affordability in San Francisco.

In places with limited housing, however, Reed told me that a small number of affluent people could make a big impact. South Lake Tahoe has been experiencing trouble with housing for a while, and the pandemic-related real estate grab only furthered it.

Shelby Cook, the organizational coordinator at Tahoe Prosperity Center, spoke to me over the phone about the situation for renters in Tahoe. “In terms of accessibility of housing, our inventory is pretty low, our wages aren’t super high and the rental and housing market is only going up in terms of cost,” she said.

According to Cook, 38% of South Lake Tahoe residents were rent burdened in 2019. Rent burdened means a household is spending more than 30% of their income toward rent. These numbers are actually better than those across California, where 53% of renters are considered rent burdened. On the topic of rent changes from the pandemic, she said, “I wouldn’t say it has increased as quickly as housing prices have.”

A major boom in housing prices came as a shock to many South Lake Tahoe residents. The median price of homes in South Lake Tahoe increased by 32.4% from February 2020 to February 2021. It’s not clear, exactly, what kind of buyers — vacationers or primary residents — are jacking up the prices on South Lake Tahoe homes. Before the pandemic, South Tahoe saw extremely high vacancy rates as a result of second home ownership: 54% in 2019. People of means have historically been purchasing property in the basin, either to rent out short term for tourists or to use as a secondary residence.

When I asked Cook what she thought, she told me, “It’s all conjecture at this point. We’re trying to figure that out.” What the Tahoe Prosperity Center can speak about, however, are the economic conditions for those in the basin. Cook told me, “We’ve seen the average wage go up, but we’re still at 62% of our economic base is reliant on the tourism sector, and it leaves us incredibly vulnerable.”

This vulnerability was clear when locals were laid off from restaurants, bars and ski resorts as the economy shut down last year. For a while now, it has not been possible for those who work minimum wage to afford a house in the basin. “More and more people are moving down the hill into the valleys where they can find places to live,” Cook said. Even in 2015, only 21% of residents across the basin could afford to purchase a median-priced home. Now, with prices up more than $100,000, the possibility of purchasing a home for Tahoe residents has been reduced. Reed put it this way: “The pandemic really highlighted the holes in our so-called safety net, and shown maybe there wasn’t, isn’t much of one left. The people who are already struggling before the pandemic are struggling even more now,”

As far as Faulknor and her husband go, they have every intention of staying in Tahoe post-pandemic. “We have been very proactive about becoming part of the community, not just trying to be a transplant that brings with us all these new, different ideas and needs and wants,” Faulknor said.

Cook told me, “My hope is that people come and fall in love with all of Tahoe. And then we have more permanent, young people who want to really build a community.”

Contact Sage Alexander at [email protected].