Kelly Ridge South Lake Tahoe, CA

Lake Vista Apartments Stateline, NV

Kings Beach Housing Now Kings Beach, CA

Tahoe Regional Housing Needs Program Report

Needs Assessment Background Report and Priority Policy and Program Evaluation Submitted to Tahoe Regional Planning Agency May 28, 2014

bae urban economics

FINAL Disclaimer The statements and conclusions of this report are those of the GRANTEE and/or Subcontractor, and not necessarily those of the Strategic Growth Council or of the Department of Conservation, or its employees. The Strategic Growth Council and the Department make no warranties, express or implied, and assume no liability for the information contained in the succeeding text.

TABLE OF CONTENTS TABLE OF TABLES ..................................................................................................................... III TABLE OF FIGURES ................................................................................................................... IV DEFINITION OF TERMS .............................................................................................................. V EXECUTIVE SUMMARY ............................................................................................................. VII INTRODUCTION ........................................................................................................................ 15 Study Area Definition................................................................................................................. 16 REGIONAL DEMOGRAPHIC AND ECONOMIC TRENDS ............................................................. 17 Population and Employment Characteristics .......................................................................... 17 Population Trends ................................................................................................................... 17 Household Trends ................................................................................................................... 17 Average Household Size ......................................................................................................... 17 Household Tenure................................................................................................................... 18 Age Distribution....................................................................................................................... 19 Household Income Distribution ............................................................................................. 20 Household Income Categories ............................................................................................... 20 Employment Trends .................................................................................................................. 25 Unemployment Rate ............................................................................................................... 25 Employed Residents by Industry ............................................................................................ 26 Worker Commuting Patterns .................................................................................................. 31 Population, Household and Employment Projections, 2010-2035 ....................................... 31 HOUSING STOCK CONDITIONS ................................................................................................ 33 Housing Stock Characteristics .................................................................................................. 33 Overcrowding ............................................................................................................................. 35 Housing Cost Burden ................................................................................................................ 35 Age of Housing Stock ................................................................................................................ 40 Occupancy Rates ....................................................................................................................... 41 REGIONAL HOUSING MARKET CONDITIONS ........................................................................... 45 Foreclosures and Distressed Mortgages ................................................................................. 45 For-Sale Housing ....................................................................................................................... 45

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HUD Income Limits for Section 8 and HOME Programs ....................................................... 48 Affordable Home Purchase Prices ......................................................................................... 49 Rental Housing .......................................................................................................................... 51 Affordable Rental Rates ......................................................................................................... 54 Inventory of Affordable Rental Units ...................................................................................... 55 LOCAL JURISDICTION HOUSING NEEDS, GOALS & POLICIES .................................................. 59 Background................................................................................................................................ 59 Housing Needs Goals and Policies by Jurisdiction .................................................................. 59 CONSTRAINTS TO AFFORDABLE HOUSING DEVELOPMENT .................................................... 70 Costs for Land and Marketable Development Rights ............................................................. 70 Uncertainty and Risk Associated with Discretionary Approvals Process ............................... 70 Need for More Nuanced or Flexible Mitigation Policies .......................................................... 72 Workforce Housing and the Residential Allocation System.................................................... 72 Determining TRPA’s Appropriate Role in Housing Matters ..................................................... 73 PRIORITY POLICY AND PROGRAM EVALUATION ...................................................................... 75 Policy #1: Remove Barriers to TAU Conversion ....................................................................... 77 Policy #2: Remove Barriers to Mobile Home Conversion ....................................................... 90 Policy #3: Allow Second Units on Small Lots Near Centers .................................................... 98 Policy #4: Revise Code to Support Workforce Housing ........................................................ 101 Policy #5: Remove Other Barriers and Streamline Process ................................................. 104 APPENDIX A: REGIONAL PLAN HOUSING SUBELEMENT ...................................................... 110 APPENDIX B: STUDY AREA DEFINITIONS .............................................................................. 113 APPENDIX C: INTERVIEW AND MEETING PARTICIPANTS ...................................................... 118 APPENDIX D: DISTRIBUTION OF MOBILE AND MANUFACTURED UNITS, 2008-2012 .......... 119

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TABLE OF TABLES Table 1: Residential Land Use Commodities .......................................................................................... vii Table 2: Opportunities for Addressing Housing Constraints with Area Plans ........................................ xii Table 3: Population and Household Trends, 2000 and 2013 .............................................................. 18 Table 4: Age Distribution, 2000 and 2013 ............................................................................................ 19 Table 5: Household Income Distribution, 1999 and 2013 ................................................................... 21 Table 6: Distribution of Households by Income Category, Tahoe Region, 2006-2010 ....................... 21 Table 7: Distribution of Households by Income Category, Tahoe Area Counties, 2006-2010 ........... 23 Table 8: Labor Force and Unemployment Trends, 2000 Through 2012 ............................................. 26 Table 9: Employed Civilian Population by Industry, 2000 and 2013 ................................................... 28 Table 10: Employed Civilian Population by Occupation, 2003 and 2013 ........................................... 30 Table 11: Commute Flows, Tahoe Region, 2011 .................................................................................. 31 Table 12: Population, Employment, and Housing, Tahoe Region, 2010 and 2035............................ 32 Table 13: Housing Stock Characteristics, 2000 and 2013 .................................................................. 34 Table 14: Overcrowding by Tenure, 2000 and 2007-2011 .................................................................. 35 Table 15: Household Cost Burden, Tahoe Region, 2006-2010 ........................................................... 38 Table 16: Household Cost Burden, Tahoe Area Counties, 2006-2010 ............................................... 39 Table 17: Housing Stock by Year Built.................................................................................................... 40 Table 18: Housing Occupancy and Vacancy Status, 2000 and 2007-2011 ....................................... 42 Table 19: Housing Units by Size, Tenure, and Vacancy Status, 2007-2011 ....................................... 42 Table 20: Households by Size, 2007-2011 ........................................................................................... 44 Table 21: Single-Family Home Sales, Tahoe Region, December 2012 to May 2013 ......................... 47 Table 22: HUD Income Limits, Fiscal Year 2013 ................................................................................... 48 Table 23: Affordable For-Sale Housing Prices, Tahoe Region, 2013 ................................................... 50 Table 24: Selected Apartment Rental Rates, Tahoe Region, 2013 ..................................................... 52 Table 25: Selected Private Rental Rates, Tahoe Region, 2013 ........................................................... 53 Table 26: Affordable Rents, Tahoe Region, 2013 ................................................................................. 56 Table 27: Affordable Rental Complexes, Tahoe Region, 2013 ............................................................. 58 Table 28: Existing and Banked Tourist Accommodation Units, Tahoe Region, 2012 ......................... 83 Table 29: Taxable Revenue Per Available Room Night, December 2012 to November 2013 ........... 84 Table 30: Residentially Zoned Parcels within 0.25 Miles of Town Centers by Acreage Category .... 100 Table 31: Matrix of Recommended Code Amendments ..................................................................... 109

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Table of Figures Figure 1: Figure 2: Figure 3: Figure 4: Figure 5:

Percent of Population by Age Category, 2013 ....................................................................... 20 Percent of Households by Income Category, Tahoe Region, 2006-2010 ............................ 22 Percent of Households by Income Category, Tahoe Area Counties, 2006-2010 ................ 24 Labor Force and Unemployment Trends, 2000 to 2012....................................................... 25 Percent of Housing Stock by Year Built .................................................................................. 40

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DEFINITION OF TERMS Following are definitions of several terms with specific meanings, which are used frequently in this report. Above Moderate-Income. Above moderate-income is defined as a household that has an income that is above 120 percent of the area median income for the county in which it is located, adjusted for household size. Affordable Housing. Under federal statutes, affordable housing is defined as housing which costs no more than 30 percent of gross household income. Housing costs include rent or mortgage payments, utilities, taxes, insurance, homeowner association fees, and other related costs. The TRPA Code of Ordinances defines “affordable housing” as residential housing units, deed restricted to be used exclusively for lower-income households (income not in excess of 80 percent of the respective county’s median income) and for very low-income households (not to exceed 50 percent of the respective county’s median income). Such housing units shall be made available for rental or sale at a cost that does not exceed the recommended state and federal standards. Each county’s median income shall be determined according to the income limits published annually by the Department of Housing and Urban Development. For multi-person dwellings, the affordable housing determination shall be made using each resident’s income and not the collective income of the dwelling. Extremely Low Income-Housing. Extremely low-income is defined as a household that has an income that is equal to or below 30 percent of the area median income for the county in which it is located, adjusted for household size. Housing Cost Burden. Housing cost burden is defined as the percentage of household income that is spent each month on housing expenses. For renters, this includes rent plus utility costs. For homeowners, this includes mortgage principal and interest payments, property taxes, and hazard insurance. For homeowners, cost burden does not include utility costs. Excessive housing cost burden is defined as housing costs that exceed 30 percent of a household’s monthly income. Extreme housing cost burden is defined as housing costs that exceed 50 percent of a household’s monthly income. Low-Income Housing. Low-income is defined as a household that has an income that is more than 50 percent but not more than 80 percent of the area median income for the county in which it is located, adjusted for household size. Moderate-Income Housing. Moderate-income is defined as a household that has an income that is more than 80 percent but not more than 120 percent of the area median income for the county in which it is located, adjusted for household size.

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Very Low-Income Housing. Very low-income is defined as a household that has an income that is more than 30 percent but not more than 50 percent of the area median income for the county in which it is located, adjusted for household size. Workforce Housing. Workforce housing is defined as housing that is affordable to households with workers employed in local businesses. Workforce housing may serve a range of household income levels; however, the income limits specified for workforce housing are often targeted to working households who don’t qualify for subsidized rental housing, but might have difficulty affording market rate housing. For example, the income limit for a three-person household to qualify for lowincome housing in El Dorado or Placer County is $51,150 per year. The income needed to affordably purchase a home priced equal to the median price of homes sold on the California side of the Tahoe Region in the December 2012 to May 2013 time period was $90,522. Thus, the income limit for workforce housing on the California side of the Tahoe Region could be defined to fall within this range, which spans from 80% to 139% of median income.

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EXECUTIVE SUMMARY On December 12, 2012, the Tahoe Regional Planning Agency (TRPA) adopted an updated Regional Plan. The Regional Plan Goals and Policies were developed to ensure compliance with the Tahoe Regional Planning Compact, or Bi-State Compact, and serves as a guide for all future land use decisions with the Tahoe Region. At a minimum, the Regional Plan must achieve and maintain adopted environmental thresholds while providing for orderly growth and development. Although not required by the Tahoe Regional Planning Compact, a Housing Subelement is included in the Regional Plan Land Use Element to make provisions for the development of low- and moderate-income housing within the Tahoe Region. The Housing Subelement Goals and Policies (see Appendix A) require TRPA to regularly evaluate housing needs, remove barriers, and update policies and ordinances necessary to achieve the Region’s housing needs to the extent feasible, without compromising the provisions of the Regional Plan, including the growth management provisions. The growth management provisions in the Regional Plan and TRPA Code of Ordinances limit residential development by requiring both a residential allocation and development right to construct a new residential unit. Deed restricted affordable housing (very low- and low-income housing) does not require a residential allocation, but requires a residential bonus unit in lieu of a development right. Under the 2012 Regional Plan, the maximum amount of residential allocations and residential bonus units that may be released before December 31, 2032, is limited, as provided below in Table 1. Table 1: Residential Land Use Commodities Com m odity Type Residential Allocation Residential Bonus Units

Rem aining from 1987 Regional Plan 114 (a) 874 (b)

2013 Additions 2,600 600 (c)

Notes: (a) The 114 remaining residential allocations from the 1987 Regional Plan have been allocated. (b) 245 Residential Bonus Units have been reserved or allocted to projects (e.g., Community Enhancement Projects) that have not been permitted, or permitted but not built, are accounted for in the "Remaining from 1987 Regional Plan" column. (c) The 600 Multi-Residential Bonus Units may only be used in Centers. Sources: TRPA, 2012 Regional Plan; BAE, 2013.

It should be noted that the Regional Plan Goals and Policies and the Tahoe Metropolitan Planning Organization’s (TMPO) Regional Transportation Plan and Sustainable Communities Strategy: Mobility 2035 encourages, and is many cases requires, that most of the the Region’s low-and moderateincome housing needs be met through the contruction of low- and moderate-income multi-family housing within Centers (the High Density Tourist District, the Regional Center, and Town Centers as depicted on Map 1, Conceptual Regional Land Use Map, of the Regional Plan).

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Regional Plan Update During the Regional Plan Update, local jurisdiction representatives from the City of South Lake Tahoe, El Dorado County, Placer County, Washoe County, and Douglas County raised concerns with existing TRPA rules and regulations acting as barriers to meeting the housing needs identified in their Housing Elements. Each local jurisdiction prepares a Housing Element as part of their Master Plan (Nevada) or General Plan (California). In response, the Regional Plan requires the TRPA to prepare a regional housing needs program and implement recommendations. Tahoe Regional Housing Needs Program Report In 2013, TRPA was awarded a State of California Strategic Growth Council Grant to prepare a Tahoe Regional Housing Needs Program Report. BAE Urban Economics, Inc. (BAE) was retained to evaluate the Region’s housing needs, identify barriers to low- and moderate-income housing development, and identify priority policies and programs for implementation. Overall, the findings in the Report demonstrate that there is a need for more housing to meet the needs of the Region’s workforce and there are significant opportunities for TRPA to modify policies and programs to facilitate production of housing affordable to low- and moderate-income households. Highlights of the Report include: Regional Demographic and Economic Trends •

The Region’s population declined from 62,577 residents in 2000 to 55,607 in 2010 (U.S. Census). This represents a loss of 8,400 residents, or a 13.4 percent decrease since 2000.

•

The Region’s median household income increased from $46,500 in 2000 to $51,600 in 2013. However, once adjusted for inflation, these values represent a real decrease in median household income of $10,200, or 16.5 percent.

•

The Region contains approximately 22,000 households, 40 percent of which are low-income (80 percent or less of median income), 21 percent of which are moderate-income (81 to 120 percent of median income), and 39 percent of which are above moderate-income (121 percent or above median income).

•

Among households of all incomes in the Tahoe Region, 45 percent had housing cost burdens greater than 30 percent of income. Owner households with excessive or severe cost burdens accounted for 46 percent of the total owner households, while renters with excessive or severe cost burdens accounted for 44 percent of all renter households.

•

The median family income for the Region, between 2006 and 2011, was approximately $69,900.

•

Since 2000, the number of employed residents in the Region declined by 9.7 percent, from

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33,015 to 29,827. In 2012, the unemployment rate averaged 11.1 percent. •

Of the Region’s 29,827 employed residents, the top three industries for employment are the Accommodation and Food Services industry (22.3 percent of employed residents), the Arts, Entertainment and Recreation industry (10.8 percent), and the Retail Trade industry (9.3 percent). A substantial portion of the jobs in these industries, and other industries in which residents are employed, pay low wages.

•

Approximately 54 percent of the people who work inside the Region live outside of the Region. Conversely, approximately 49 percent of the Region’s employed residents commute to jobs located outside of the Region. On a typical workday, approximately 11,880 workers commute into the Region and approximately 9,980 residents commute out of the Region to work.

Existing Housing Stock Characteristics •

Single-family housing units, both attached and detached, account for 78 percent of the Region’s total housing stock of roughly 37,700 units. Multifamily housing units account for 20 percent of the Region’s total housing stock, roughly 9,710 total units. Only about 45 percent of the region’s housing stock is occupied by permanent renter or owner households. Most of the remainder is utilized as second homes or vacation rentals.

•

As many as 6,000 of the Tahoe Region’s permanent resident households may be living in housing units that are larger than they need, due to a relative lack of smaller (i.e., twobedrooms or less) housing units. This may be exacerbated if the Region follows national trends towards increases in the proportion of households without children and people living alone.

•

Since 2000, the Region has gained 920 new multifamily units in smaller complexes with between two and four units, but lost some 900 multifamily units in larger complexes with five or more units. As a result, the Region has only gained 20 new multifamily housing units since the year 2000.

•

The Region has an estimated 1,051 mobile and manufactured housing units, roughly 2.2 percent of the Region’s total housing stock. This is a decline of 199 units, or 16 percent, since 2000. Although a primary form of affordable housing in California and Nevada, mobile and manufactured homes may not be the most suitable form of housing in the Region due to the alpine climate.

•

The Tahoe Region has a relatively older housing stock, with approximately 86 percent units constructed before 1989, and only 14 percent constructed after.

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The Region has approximately 11,947 tourist accommodation units (TAUs), some of which

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provide long-term housing for lower-income households. •

As of August 2013, there were 13 rental housing complexes in the Region subsidized for very low- and low-income households. Nearly all of them are located on the south shore, with only the Kings Beach Housing Now offering subsidized housing on the north shore. In all, these complexes account for 594 total units. The Aspens in South Lake Tahoe will add an additional 56 units in 2014.

•

Most subsidized housing complexes carry a waiting list of 10 households or less, with the exception of the Kings Beach Housing Now (or Domus Development) project, which has a waiting list of 150 households. The majority of demand for subsidized housing is reportedly coming from area employees, many of whom are seasonal workers or are employed yearround at casinos.

•

Approximately 23,181 units, or 55 percent of the Region’s total housing stock, was vacant between 2007 and 2011. Approximately 87 percent of these units were vacant for reasons of seasonal and recreational use. As a percentage of the total housing stock, the prevalence of seasonal and recreational units increased from nearly 40 percent in 2000 to 48 percent between 2007 and 2011. Typically, a vacancy rate between four and six percent is an indicator of a healthy housing market, which makes a variety of housing options available to households.

•

In May 2013, the median sales price of a single-family home was $362,500. Home sales in California were notably less expensive, with a median sales price of $312,500, compared to $530,000 in Nevada. Only moderate and above moderate-income households would be likely to afford a median priced home in the Region, without exceeding a 30 percent housing cost burden.

Regional Affordable Housing Needs Overall, the conditions and trends identified in the needs assessment demonstrate that the Tahoe Region does not have sufficient low-, moderate-, and mixed-income housing to meet the needs of the Region’s workforce and that the lack of quality affordable housing has resulted in thousands of people commuting in and out of the Region each day for work. Data on the number of households paying more than 30 percent of their income for housing provide an indicator of the unmet regional affordable housing need that arises as a result of the mismatch between household incomes and housing costs. Based on this metric, for renters and for homeowners of all income levels, the unmet need for affordable housing in the Tahoe Region is about 9,800 units. The figure above would increase if it is acknowledged that a number of workers who might otherwise need affordable housing near their workplaces in the Tahoe Region have instead obtained more

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affordable housing outside the region and commute into the region for work. In addition, there may be households currently living in the Tahoe Region that are not paying more than 30 percent of their income for housing, but are only able to keep their housing costs affordable by compromising on the size or quality of their housing units. Thus, there may be additional households that would benefit from increased availability of quality affordable housing, because they are paying 30 percent or less of their income for housing but they have housing that is substandard or too small to meet their needs. It is not possible to accurately quantify how many more housing units beyond 9,800 would be necessary to address these potential needs. Due to the imbalance that currently exists between a permanent resident population in which the majority of households are relatively small, and a housing stock in which the majority of housing units are sized to accommodate larger households, along with national trends toward smaller households, the Region would likely benefit from an emphasis on construction of smaller housing units, such as studio and one-bedroom apartments, smaller second units, and single-room occupancy units. Technical Working Group This report was prepared with input from a Technical Working Group (TWG) that included both local jurisdiction representatives and private sector housing stakeholders. The TWG helped to identify major constraints and barriers to the development and preservation of low- and moderate-income housing, provided recommendations for removing constraints and barriers, and helped to define TRPA’s role in regional housing issues. The Report also includes a summary of each local jurisdiction’s Housing Element. Constraints and Barriers The major constraints and barriers to constructing low- and moderate-income housing in the Region identified by the TWG includes: 1. The scarcity and high cost of land; 2. TRPA policies and regulations (allocations, density, restrictions on second units, coverage, Best Management Practices (BMPs), mitigation fees, etc.); and 3. The complex regional permitting process. Recommendations The TWG provided a number of strategies for addressing the Region’s housing needs. The recommendations were presented to both the Governing Board and Local Government Committee (LGC). The five priority areas that were ultimately recommended for further analysis by the LGC and included in this Report are: 1. Policies/a program for removing barriers to the redevelopment/transfer of old tourist accommodation units (TAUs) into low- and moderate-income housing. 2. Policies/a program for removing barriers to the redevelopment/transfer of mobile home parks

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into low- and moderate-income housing. 3. Allowing second residential units on lots less than one acre in size within ¼ mile of Centers. 4. Expanding TRPA code provisions to encourage the construction of low- and moderate-income housing for the Region’s workforce. 5. Removal of other TRPA code barriers and streamlining the regional permitting process. Overall, the above priority areas were selected because they are consistent with the Regional Plan Goals and Policies and the Regional Transportation Plan/Sustainable Communities Strategy. The final chapter of this report provides analysis of each of these priority areas, including recommendations for implementation. TRPA can address the recommendations for implementation by: 1) focusing on the development and implementation of Area Plans; and 2) identifying and removing constraints from the TRPA Code of Ordinances. Area Plans The updated Regional Plan and TRPA Code of Ordinances, Chapter 13: Area Plans, include new provisions that allow for local jurisdictions to prepare Area Plans for the implementation of Regional Plan Goals and Policies. All of the local jurisdictions within the Tahoe Region are currently in the process of developing Area Plans. As identified below in the Table 2, many of the constraints to developing low-and moderate-income housing that have been identified by the TWG can be addressed through the development and implementation of Area Plans. Table 2: Opportunities for Addressing Housing Constraints with Area Plans Constraint Area Plan Opportunities Availability of Land The Regional Plan includes a new Mixed-Use Land Use District and identifies Centers on Map 1 of the Regional Plan. The MixedUse Land Use District allows for a mix of uses, including commercial, public, and residential uses. The Mixed-Use Land Use District was generally applied to existing Community Plan areas. Centers contain a concentration of the Region’s existing non-residential “legacy development” and are prioritized for redevelopment. Centers have also been identified as Receiving Areas in order to encourage the transfer of development from sensitive and outlying areas. The Mixed-Use Land Use District and Centers generally coincide. The adoption of Area Plans, with Mixed-Use Land Use Districts and Centers, will expand the amount of land available for the development of low- and moderate-income housing in the Region. Local jurisdictions may also identify additional areas appropriate for low- and moderateincome housing outside of the Mixed-Use Land Use District and Centers as part of their Area Plans.

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Density Limitations

Height Limitations

Coverage Restrictions

Best Management Practices (BMP) Requirements

Design Standards and Guidelines

New Uses

The TRPA Code of Ordinances, Chapter 31: Density, establishes a maximum residential density of 15 dwelling units per acre for multi-family housing and allows for a 25 percent density bonus for affordable housing (very-low and low-income) projects. Chapter 13: Area Plans now allows for a maximum residential density of 25 dwelling units per acre within Centers with the adoption of Area Plans. Thus, with the adoption of Area Plans a residential density can be achieved that was not previously allowed anywhere within the Tahoe Region. The TRPA Code of Ordinances, Chapter 37: Height, generally restricts the maximum height of a building to 42 feet. With the adoption of Area Plans, Chapter 13 now allows the maximum height to be increased to 56 feet in a Town Center, 95 feet in the Regional Center, and 197 feet in the High Density Tourist District. Thus, with the adoption of Area Plans additional height is allowed which will allow for additional housing to be accommodated in Centers. The TRPA Code of Ordinances, Chapter 30: Land Coverage, now allows for maximum transfer coverage limits to be increased from 50 to 70 percent for redevelopment projects within High Capability Lands (Land Capability Districts 4 through 7) in Centers. As part of Area Plans, Chapter 13 also allows for local jurisdictions to develop alternative comprehensive coverage management systems as an alternative to parcel-level coverage requirements in Chapter 30. The TRPA Code of Ordinances, Chapter 13 allows for local jurisdictions to develop area-wide water quality treatments and funding mechanisms in lieu of certain site-specific BMPs. Allowing area wide systems may help to reduce the cost of installing site-specific BMPs and may be a more effective way of controlling runoff. The TRPA Code of Ordinances, Chapter 13 allows for local jurisdictions to develop design standards and guidelines as part of Area Plans. While design standards and guidelines can drive up the cost of constructing low- or moderate-income housing projects, they also ensure the quality design of projects and acceptance of housing projects by residents and visitors. Chapter 13 also allows for local jurisdictions to develop their own parking requirements and reduce parking requirements based on a site’s use, density, location, and proximity to transit and bike/walking paths. Chapter 13 allows for the development of new permitted use tables, which provides an opportunity to identify and define new housing types (emergency shelters, dormitories, and transitional and supportive housing, etc.), and the identification of zoning districts where they could be located.

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Permit Processing Times and Fees

The TRPA Code of Ordinances, Chapter 13 allows for additional permitting authority to be delegated to local jurisdictions with the adoption of an Area Plan and associated Memorandum of Understanding (MOU). Residential development equal to or less than 100,000 square feet (sf) in the Regional Center, 50,000 sf in a Town Center, and 25,000 sf outside of a Center may be delegated to a local jurisdiction for review. The level of delegation of review may also be increased if a local jurisdiction demonstrates competency in implementing an MOU. As long as a local jurisdiction collects mitigation fees, security deposits, monitoring and reporting fees, and other designated fees on behalf of TRPA, they may also establish their own application fees. Thus, previous issues with long permitting times and duplicative fees can largely be eliminated with the adoption of Area Plans and associated MOUs.

TRPA Role TRPA recognizes that local jurisdictions, in coordination with state and federal agencies, the public sector, and non-profit organizations, are primarily responsible for addressing the housing needs of their communities, whereas it is the TRPA’s responsibility to focus on the protection of Lake Tahoe and surrounding environment. The agency however also recognizes that existing TRPA rules and regulations have made it challenging for local jurisdictions to meet their housing needs and that the low inventory of low- and moderate-income housing has resulted in thousands of people commuting in and out of the Region each day for work, increasing vehicle miles traveled (VMT). Reducing VMT is a primary objective of the Regional Plan and Regional Transportation Plan/Sustainable Communities Strategy and is necessary to ensure the maintenance and attainment of the environmental thresholds (particularly the air quality, water quality, and noise thresholds). Therefore, as a component of the overall effort to implement the Regional Plan and Regional Transportation Plan/Sustainable Communities Strategy, as well as ensure Threshold attainment, TRPA is committed to working to remove barriers and implementing the strategies identified in this Report and supporting the efforts of local jurisdictions in meeting their housing needs.

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INTRODUCTION The Tahoe Regional Planning Compact (Public Law 06-551, 94 Statute 3233), or Bi-State Compact, is a joint agreement by the States of California and Nevada, and the 96th Congress of the United States. It provided for the creation of the Tahoe Regional Planning Agency (TRPA), which possesses authority over land use and other activities in the Tahoe Region, in order to encourage the wise use and conservation of the waters of Lake Tahoe, and of the resources around the lake. In December 2012, TRPA adopted an update to the Lake Tahoe Regional Plan, which became effective in February 2013. The update established a series of new and modified policies intended to achieve, and subsequently maintain, the adopted 2011 Environmental Threshold Carrying Capacities, also known as the Threshold Standards. 1 One of the mitigation measures included in the Environmental Impact Statement (EIS) for the Regional Plan Update requires the preparation of a Regional Housing Needs Program that would “evaluate progress towards the adopted housing goals and recommend policy and ordinance changes necessary to achieve housing goals.” The Regional Housing Needs Program will need to address a variety of key issues, including the assessment of regional housing needs and affordability gaps. As a first step toward development of the Regional Housing Needs Program, TRPA retained BAE Urban Economics, Inc. (BAE) to research and assess the existing housing needs within the Tahoe Region, evaluate constraints to housing production with a focus on low- and moderate-income housing, and identify potential changes in TRPA policies and programs that could encourage production of a greater proportion of new housing as affordable units. A grant awarded by the State of California Strategic Growth Council funded the preparation of this report. The report begins with a review of the affordable housing needs in the Tahoe Region. This includes estimates of the number and type of households at various income levels, and comparisons with the market price of rental and for-sale housing and group quarters housing, intended to help identify affordability gaps. After this, a review of existing housing needs assessments developed for various communities located throughout the Tahoe Region is provided. The intent of the review is to identify gaps in the housing needs assessments. This includes gaps that may arise due to seasonality in local housing needs, the legal implications of California’s Senate Bill 375, and other considerations as identified below. The last portion of the report analyzes the potential effectiveness and provides recommendations for implementation of policies and programs designed to remove barriers to affordable housing production in the Tahoe Region.

1

The Threshold Standards represent a set of environmental quality targets designed to protect the unique

natural values of the Tahoe Region, while providing for appropriate and orderly development. For more detail on the Threshold Standards, please see the 2011 Threshold Evaluation Report available at: http://www.itstactical.com/

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Study Area Definition For the purposes of this Report, the Tahoe Region includes the properties under the jurisdiction of the TRPA, as defined by the Bi-State Compact. The boundaries of the Tahoe Region roughly correspond to those of the Lake Tahoe Basin, which lies between the Sierra Crest to the west and the Carson Range to the east. As defined by the Bi-State Compact, the Region spans the border between California and Nevada, to the west of Carson City. On the California side, the planning area includes parts of Placer and El Dorado Counties. It also includes a small portion of Alpine County at the Region’s most southern extent. On the Nevada side, it includes parts of both Douglas and Washoe counties. Carson City, Nevada, also claims a portion of the lakeshore to the south of Incline Village and north of Glenbrook. This area is largely uninhabited and includes parts of the Lake Tahoe-Nevada State Park and Toiyabe National Forest. In order to collect relevant statistics regarding demographic and economic trends in the Tahoe Region, BAE used Geographic Information Systems (GIS) maps to identify the Census Tracts that fall within, or partially within, the Tahoe Region. 2 The study area excludes three Census Tracts that might otherwise be considered to be within the Region. This is because only a very limited and sparsely populated portion of each Tract falls within the Tahoe Region. This most notably includes Census Tract 3 in Carson City. The population residing within this Tract primarily lives outside of Tahoe, to the east of the Carson Range. For a full list of the Census Tracts included in the study area, please refer to Appendix B. For comparison purposes, BAE also defined a secondary study area, hereafter referred to as the “Tahoe Area Counties.” This study area includes all jurisdictions that border on Lake Tahoe, including Placer and El Dorado counties in California, and Douglas and Washoe counties and Carson City, in Nevada. Nearby jurisdictions excluded from the greater Tahoe Area Counties study area, include Alpine and Nevada counties in California. While inclusion of Nevada County would incorporate the nearby Town of Truckee, an important regional population center, the entire county lies outside of TRPA’s jurisdiction. Likewise, the total population of Alpine County is quite small, and the county features no major population centers, making its inclusion less relevant for comparison purposes.

2

See maps in Appendix A.

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REGIONAL DEMOGRAPHIC AND ECONOMIC TRENDS The following section explores the unique demographic and economic characteristics and trends that are shaping development in the Tahoe Region. The primary data sources used are the 2000 and 2010 Decennial Census and current estimates provided by Claritas, Inc., a private data vendor. Additional data were collected from a variety of other sources, including the U.S. Department of Housing and Urban Development (HUD), the U.S. Bureau of Labor Statistics, the California Employment Development Department, and the American Community Survey (ACS) published by the U.S. Census Bureau. The intent of the demographic and economic trends analysis is to identify the unique characteristics associated with Tahoe Region households, such as household composition, employment type, and income levels. This information will assist TRPA to develop programs tailored to better suit the needs of area residents, within the context of the available regional housing stock.

Population and Employment Characteristics Population Trends According to the data presented in Table 3, the population in the Tahoe Region has been declining since the year 2000. As of the 2000 Census, the Region had 62,577 residents. By the 2010 Census, the total population had declined to 55,607. Current year estimates provided by Claritas, Inc., indicate that there are roughly 54,200 permanent residents living in the Tahoe Region in 2013. This represents a total loss of 8,400 residents, or 13.4 percent since 2000. On an average annual basis, BAE estimates that the Region lost roughly 1.1 percent of its population each year. During the same period, the population residing in the Tahoe Area Counties expanded by more than 241,530 people, from 837,900 residents in 2000, to more than 1,079,430 in 2013. This equates to an average annual growth rate of 2.0 percent.

Household Trends The number of households in the Tahoe Region has declined at an average annual rate that is less than half that of the general population. In the year 2000, the Region had 25,390 total households. This declined to 23,708 households in 2013, for a total loss of 1,682 households, or 6.6 percent from 2000 levels. On an average annual basis, the Region lost roughly 0.5 percent of its households each year, during the study period. By comparison, Tahoe Area Counties added households at a rate of 2.1 percent annually. In 2000, there were 320,977 total households, which increased to 418,308 by 2013. This equals an increase of more than 97,330 households, or more than 30 percent from 2000 levels.

Average Household Size Average household size is equal to the number of people living in households, divided by the number of occupied housing units, excluding those individuals residing in group quarters and institutions. Commensurate with the declining population and household totals described above, the average household size in the Tahoe Region declined from 2.4 persons in 2000 to 2.3 persons in 2013.

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Table 3: Population and Household Trends, 2000 and 2013

2000

Tahoe Region (a) Average 2013 Annual Change

Tahoe Area Counties (b) Average 2000 2013 Annual Change

Total Population

62,577

54,176

-1.1%

837,900

1,079,432

2.0%

Households

25,390

23,708

-0.5%

320,977

418,308

2.1%

Average Household Size (Persons)

2.4

2.3

2.6

2.6

Household Type Families Non-Families

60% 40%

56% 44%

68% 32%

67% 33%

Household Tenure Ow ner Renter

59% 41%

55% 45%

67% 33%

66% 34%

Notes: (a) The Tahoe Region is defined based on 2000 and 2010 Census Tracts, to approximate the area encompassed w ithin the jurisdiction of the Tahoe Regional Planning Compact. For a complete listing of the included Census Tracts, please refer to Appendix A. (b) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. Sources: Census 2000, 2013; Claritas, Inc., 2013; BAE, 2013.

Households by Type The Census Bureau categorizes households into two main demographic groups. Family households consist of two or more related persons who occupy the same housing unit. Non-family households include individuals living alone, and groups of unrelated individuals who occupy the same housing unit. As shown in Table 3, families accounted for 60 percent of all households in the Tahoe Region in 2000. By 2013, the proportion decreased to 56 percent. Even in 2000, the Tahoe Region contained a lower percentage of family households than the Tahoe Area Counties, where families accounted for 68 percent of all households. This percentage remained relatively stable during the past 13 years, declining by only one percentage point by 2013. What this indicates is that family households are notably less common – and are becoming increasingly so – in the Tahoe Region, compared to elsewhere in California and Nevada.

Household Tenure Data on household tenure further suggest that household characteristics in the Tahoe Region are changing more rapidly than in the Tahoe Area Counties. In 2000, 59 percent of households in the Tahoe Region owned their own homes, declining to 55 percent by 2013. This reflects a loss of more than 1,800 owner households, combined with the addition of 145 new renter households. By comparison, 67 percent of households in the Tahoe Area Counties owned their own homes in 2000. This figure declined by only one percentage point by 2013, to 66 percent. Although the percentage of owner households in the Tahoe Area Counties declined, the number of owner households actually increased by nearly 59,963 through 2013, due to significant population and household growth in that area.

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Table 4: Age Distribution, 2000 and 2013

Age Distribution Under 18 18-24 25-34 35-44 45-54 55-64 65+ Total Population Median Age (c)

Tahoe Region (a) 2000 2013 Number Percent Number Percent 14,193 22.7% 9,911 18.3% 5,636 9.0% 4,726 8.7% 9,244 14.8% 7,889 14.6% 11,151 17.8% 6,858 12.7% 10,694 17.1% 8,240 15.2% 5,888 9.4% 9,023 16.7% 5,771 9.2% 7,529 13.9% 62,577 100% 54,176 100% 37

Tahoe Area Counties (b) 2000 2013 Number Percent Number 213,211 25.4% 248,075 67,448 8.0% 97,508 104,707 12.5% 127,013 142,049 17.0% 131,543 128,937 15.4% 159,867 79,763 9.5% 148,918 101,785 12.1% 166,508 837,900 100% 1,079,432

42

37

Percent 23.0% 9.0% 11.8% 12.2% 14.8% 13.8% 15.4% 100%

40

Notes: (a) The Tahoe Region is defined based on 2000 and 2010 Census Tracts, to approximate the area encompassed w ithin the jurisdiction of the Tahoe Regional Planning Compact. For a complete listing of the included Census Tracts, please refer to Appendix A. (b) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. (c) Median age figures for 2000 w ere extrapolated based on detailed age distribution data. Sources: Census 2000, 2013; Claritas, Inc., 2013; BAE, 2013.

Age Distribution Table 4 and Figure 1 below present data on the distribution of residents by age in the Tahoe Region and Tahoe Area Counties, respectively. Overall, the Tahoe Region features a lower percentage of children under the age of 18, and a higher percentage of adults age 25 and over, compared to the Tahoe Area Counties. A little more than 18 percent of Tahoe residents were children in 2013, down from almost 23 percent in 2000. Even in 2000, the Region had a smaller proportion of children than did the Tahoe Area Counties, where more than 25 percent were children under the age of 18. The Region has an overall higher percentage of residents between the ages of 25 to 64 than does the Tahoe Area Counties, but a lower percentage of residents over the age of 65. In 2000, the percentage of residents over the age of 65 was only 9.2 percent. The percentage increased over the decade to 13.9 percent in 2013. In the Tahoe Area Counties, 12.1 percent of residents were over the age of 65 in 2000, which increased to 15.4 percent in 2013. The median age estimate for the Tahoe Region increased from 37 years of age in 2000 to 42 years of age in 2013. The median age estimate for the Tahoe Area Counties reflects a similar trend, wherein the median age in 2000 was 37 but increased to 40 years of age by 2013. Since both areas had a relatively comparable median age in 2000, the difference in the 2013 median age estimates generally suggests that the Tahoe Region is aging more rapidly than other parts of California and Nevada. As will be discussed later on, this trend could have important implications for consumer preferences with regard to housing, as well as for the relative affordability of housing for households who live on fixed incomes.

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Figure 1: Percent of Population by Age Category, 2013 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%

Under 18

18-24

25-34

35-44

Lake Tahoe Region

45-54

55-64

65+

Tahoe Area Counties

Sources: Census 2000, 2013; Claritas, Inc., 2013; BAE, 2013.

Household Income Distribution Table 5 summarizes the distribution of households by income category in 2000 and 2013 within the Tahoe Region and the Tahoe Area Counties. According to these data, the median household income in the Tahoe Region increased from $46,500 in 2000 to $51,600 in 2013. This represents a nominal increase in the median household income of $5,100, or around 11 percent. However, once adjusted for inflation, BAE estimates that the median household income for the Tahoe Region decreased in real terms over the study period, from $61,800 in 2000, 3 to $51,600 in 2013. This represents a real decrease in the median income of $10,200, or 16.5 percent. Median income trends in the Tahoe Area Counties were similar to those of the Tahoe Region. In 2000, the nominal median household income was $50,300. By 2013, the value had increased to $56,700. This equals an increase of $6,400, or 12.7 percent. Adjusted for inflation, BAE estimates that the 2000 median household income for the Tahoe Area Counties decreased in real terms, from $66,900 to $56,700 in 2013. This is equal to a real decrease of $10,200, or 15.2 percent.

Household Income Categories Tables 6 and 7 below report data collected from 2006-2010 Comprehensive Affordability Strategy (CHAS) data set. The CHAS is a special tabulation of the American Community Survey (ACS), developed by the Census Bureau on behalf of HUD. The purpose of the CHAS is to demonstrate the need for various types of housing assistance. This is done by estimating the number of households that experienced certain types of housing problems, by income category and household type, during

3

Census 2000 median household income estimates are adjusted to 2012 dollars based on the Consumer

Price Index (CPI) for All Urban Consumers in the Western Region of 1.34.

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a given time-period. Because the CHAS data are based on a multi-year survey, estimates should be interpreted with caution. Table 5: Household Income Distribution, 1999 and 2013 Tahoe Area Counties (b) 2013 1999 Percent Number Percent Number 11.0% 10.8% 46,099 34,821 10.0% 42,034 34,317 10.7% 10.5% 43,786 37,262 11.6% 56,928 13.6% 16.6% 53,503 75,850 18.1% 69,915 21.8% 13.1% 54,993 40,895 12.7% 13.7% 10.0% 57,169 31,988 9.9% 18,679 5.8% 41,449 100% 418,308 321,380 100%

Household Incom e under $15,000 $15,000 to $24,999 $25,000 to $34,999 $35,000 to $49,999 $50,000 to $74,999 $75,000 to $99,000 $100,000 to $149,999 $150,000 or more Total Households

Tahoe Region (a) 1999 2013 Number Percent Number Percent 11.4% 3,162 13.3% 2,898 9.8% 2,872 11.3% 2,324 11.4% 13.7% 2,703 3,484 3,364 14.2% 4,430 17.5% 19.6% 4,930 19.4% 4,653 2,621 11.1% 10.9% 2,755 2,001 7.9% 2,572 10.8% 9.7% 2,309 2,014 7.9% 100% 23,708 25,384 100%

Median Incom e (c)

$46,500

$51,600

$50,300

$56,700

Adjusted Median Incom e (d)

$61,800

$51,600

$66,900

$56,700

Notes: (a) The Tahoe Region is defined based on 2000 and 2010 Census Tracts, to approximate the area encompassed w ithin the jurisdiction of the Tahoe Regional Planning Compact. For a complete listing of the included Census Tracts, please refer to Appendix A. (b) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. (c) Median household income figures for 2000 w ere extrapolated based on detailed household income distribution data. (d) Census 2000 median household income estimates are adjusted to 2012 dollars based on the Consumer Price Index (CPI) for All Urban Consumers in the Western Region of 1.34. Sources: Census 2000, 2013; Claritas, Inc., 2013; Bureau of Labor Statistics, 2013; BAE, 2013.

Table 6: Distribution of Households by Income Category, Tahoe Region, 2006-2010 (a) Incom e Category (b) Extremely Low -Income (≤ 30% of HAMFI) Very Low -Income (> 30% ≤ 50% of HAMFI) Low -Income (> 50% ≤ 80% of HAMFI) Moderate-Income (> 80% ≤ 120% of HAMFI) Above Moderate-Income (> 120% of HAMFI) All Incom e Levels (c)

Ow ner Households Number Percent 1,000 8%

Renter Households Number Percent 1,685 18%

All Households Number Percent 2,685 12%

880

7%

1,494

16%

2,374

11%

2,025

16%

1,610

17%

3,635

17%

2,402

19%

2,186

24%

4,588

21%

6,438

50%

2,240

24%

8,678

39%

12,755

100%

9,250

100%

21,980

200%

Notes: (a) The Tahoe Region is defined based on 2000 and 2010 Census Tracts, to approximate the area encompassed w ithin the jurisdiction of the Tahoe Regional Planning Compact. For a complete listing of the included Census Tracts, please refer to Appendix A. (b) CHAS data reflect HUD-defined household income limits. (c) Figures may not sum to totals due to rounding. Sources: HUD, 2006-2010 CHAS, 2013; BAE, 2013.

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Estimates of the number of households in the Tahoe Region, by income category and tenure, are based on aggregated Census Tract level data, which may reflect a lack of statistical reliability. Therefore, these estimates should be used only as a rough indicator of the general magnitude and direction of regional trends, and cannot be considered precise estimates. Figures reported for the Tahoe Area Counties are based on county level estimates, and provide improved statistical reliability, compared to the tract-based estimates. 4 HUD-defined income categories are based on the HUD Area Median Family Income (HAMFI). The HAMFI is calculated using 2006-2010 5-year median family income estimates and is supplemented with 2010 1-year estimates. It is then adjusted to 2013 dollars based on the Consumer Price Index (CPI). The HUD income limits are calculated as a percentage of the HAMFI. The very low-Income limit is 50 percent of the HAMFI and the low- and extremely low-income limits are calculated as 160 and 60 percent of the very low-income limit, or 80 percent and 30 percent of HAMFI, respectively. The moderate-income limit is estimated at 120 percent of the HAMFI, while the above-moderate households have incomes above 120 percent of the HAMFI. Income limits are adjusted for household size, so a larger household with a given income level could be placed within a lower income category than a smaller household that has the same income. Figure 2: Percent of Households by Income Category, Tahoe Region, 2006-2010

Owner Households

Renter Households

8% 7%

24%

Extremely Low Income

18%

Very Low Income

16%

16%

50% 24%

19%

17%

Low Income Moderate Income Above Moderate Income

Sources: HUD, 2006-2010 CHAS, 2013; BAE, 2013. According to the data reported in Table 6, nearly 40 percent of the households in the Tahoe Region, between 2006 and 2010, had incomes equal to 80 percent or less of the adjusted area median family income, which is considered low-income. This totaled approximately 8,700 households. Just

4

While aggregation can improve reliability, a lack of information regarding covariance makes the margins of

error for derived estimates unreliable, when aggregating more than four geographies. In the absence of reliable margin of error estimates, the relative reliability of derived estimates cannot be determined.

22

over 12 percent of households, nearly 2,700 of the 8,700 low-income households, were categorized as extremely low-income. Another 11 percent were categorized as very low-income and 17 percent categorized as low-income. This equaled roughly 2,400 very low-income households and 3,600 lowincome households. Moderate-income households made up 21 percent, with nearly 4,600 households. The remaining 39 percent were in the above moderate category, accounting for almost 8,700 total households. Broken down by tenure, as shown in Figure 2, owner households were the predominant household type, between 2006 and 2010. These households accounted for 58 percent of the total, which is consistent with figures reported in Table 2. These households were more heavily concentrated in the higher income brackets, with more than 6,400 households reported in the above moderate-income category. These higher income households accounted for more than 50 percent of all owner households in the Tahoe Region. Another 2,400 households were categorized as moderate-income, accounting for 19 percent of owner households. Around 31 percent of the owner households had incomes equal to 80 percent or less of the adjusted area median (i.e. low-, very low-, or extremely low-income). Renter households made up a smaller portion of the Region’s total households, and were somewhat more concentrated in the low- to extremely low- income categories. Approximately 4,800 households both rented their accommodations, and had incomes equal to 80 percent or less of the adjusted area median (i.e. low-, very low-, or extremely low-income). These households accounted for only 22 percent of all regional households, but made up more than 52 percent of all renter households in the Region. By comparison, around 2,200 renter households fell into each of the categories of moderate- and above-moderate income. Households in these two income categories respectively represented around 24 percent of all renter households. Table 7: Distribution of Households by Income Category, Tahoe Area Counties, 2006-2010 (a) Incom e Category (b) Extremely Low -Income (≤ 30% of HAMFI) Very Low -Income (> 30% ≤ 50% of HAMFI) Low -Income (> 50% ≤ 80% of HAMFI) Moderate-Income (> 80% ≤ 120% of HAMFI) Above Moderate-Income (> 120% of HAMFI) All Incom e Levels (c)

Ow ner Households Number Percent 12,550 5%

Renter Households Number Percent 22,835 18%

All Households Number Percent 35,385 9%

18,130

7%

21,665

17%

39,795

10%

32,210

12%

28,130

22%

60,340

15%

50,765

19%

26,690

21%

77,455

19%

157,765

58%

28,259

22%

186,024

47%

271,410

100%

127,585

100%

398,995

200%

Notes: (a) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. (b) CHAS data reflect HUD-defined household income limits. (c) Figures may not sum to totals due to rounding. Sources: HUD, 2006-2010 CHAS, 2013; BAE, 2013.

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Table 7 reports households, by income category and tenure, in the Tahoe Area Counties for comparison purposes. According to this data, 34 percent of the households had incomes equal to 80 percent or less of the adjusted median. This equaled some 135,520 total households. Only around nine percent, or 35,400 households, were extremely low-income. Another 10 percent were very low-income and 15 percent were low-income, accounting for 39,800 and 60300 households respectively. Moderate-income households made up 19 percent, with nearly 77,500 households. The remaining 47 percent were in the above moderate category, accounting for more than 186,000 total households. Detailed estimates for the Tahoe Area Counties reflect the same differences in the distribution of households by tenure that are illustrated in Table 2. Owner households were more prevalent in this comparison geography, compared to the Tahoe Region, with 68 percent of all households reported as owning their own home. Owner households were also less likely to be lower-income, with only 23 percent of owner households reported as low-, very low-, or extremely low-income. Around 19 percent of owner households were in the moderate-income category, while more than 58 percent were in the above moderate-income categories, with incomes greater than 120 percent of the area median. Renter households, by comparison, made up a smaller proportion of households, and were somewhat more concentrated in the low- to extremely low- income categories. Approximately 57 percent of renter households had incomes equal to 80 percent or less of the adjusted area median (i.e. low-, very low-, or extremely low-income). Around 21 percent of renter households fell into the moderate-income category, while 22 percent were reported in the above moderate- category. Comparatively, households residing in the Tahoe Region are more likely to be renters, and to be lowincome, than households residing in the Tahoe Area Counties. Figure 3: Percent of Households by Income Category, Tahoe Area Counties, 2006-2010

Owner Households 5%

Renter Households Extremely Low-Income

7%

22%

18% Very Low-Income

12%

58%

17% 19%

21%

Moderate-Income 22%

Sources: HUD, 2006-2010 CHAS, 2013; BAE, 2013.

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Low-Income

Above ModerateIncome

Employment Trends Unemployment Rate As presented in Table 8 and Figure 4, unemployment in Tahoe Area Counties held relatively stable at four to five percent, between 2000 and 2007. In 2008, at the onset of the housing crisis and the Great Recession, unemployment began to rise rapidly. By 2010, unemployment in Tahoe Area Counties had reached its peak at 13.8 percent. Since 2010, the rate has decreased gradually, falling to an annual average of 11.1 percent in 2012, still nearly six and a half percentage points higher than where it started in 2007. Changes in the unemployment rates in El Dorado, Placer, Douglas, and Washoe counties all followed the same general trend from 2000 through 2012. Overall, the two Nevada counties experienced a higher peak unemployment rate in 2010, than did the two California counties. Data on unemployment by Census Designated Places (CDP) is only available for communities located in California, and suggests that Tahoe Vista and South Lake Tahoe experienced the highest peak in unemployment rates at 18.6 and 16.8 percent, respectively, in 2010. These communities maintained the highest unemployment rates on the California side, through 2012, although the communities of Dollar Point, Kings Beach, and Sunnyside-Tahoe City also had unemployment rates above what is otherwise considered normal. Figure 4: Labor Force and Unemployment Trends, 2000 to 2012 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2000

2001

El Dorado

2002

2003 Placer

2004

2005

2006

Douglas

2007 Washoe

2008

2009

California

Sources: BLS, Local Area Unemployment Statistics, 2013; BAE, 2013.

25

2010

2011

2012

Nevada

Table 8: Labor Force and Unemployment Trends, 2000 Through 2012 Tahoe Area Counties (a) Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Average Annual Change

Labor Force 457,157 472,263 486,308 496,407 504,295 514,434 525,791 531,704 541,057 547,675 547,858 544,855 541,259

Employment 439,902 451,695 461,760 471,543 481,257 491,459 503,471 506,548 503,494 486,919 479,154 479,502 485,137

Unemployment 17,255 20,568 24,548 24,864 23,038 22,975 22,320 25,156 37,563 60,756 68,704 65,353 56,122

Unemployment Rate (b) 3.8% 4.4% 5.0% 5.0% 4.6% 4.5% 4.2% 4.7% 6.9% 11.1% 12.5% 12.0% 10.4%

1.4%

0.8%

10.3%

n.a.

Notes: (a) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. (b) Unemployment rates for the Tahoe Area Counties are calculated using rounded employment and unemployment figures. Sources: BLS, Local Area Unemployment Statistics, 2013; BAE, 2013.

Employed Residents by Industry Table 9 presents estimates of employed residents, by industry, in the Tahoe Region and Tahoe Area Counties. Note that these data are for residents of the area, regardless of whether their places of employment are located in the area, or outside of the area. Estimates for 2013 suggest that the five industry categories that employ the largest number of Tahoe residents are Arts, Entertainment and Recreation; Accommodation and Food Services; Retail Trade; Construction; and Finance, Insurance and Real Estate. Of the region’s 29,827 employed residents, 6,640 work in the Accommodation and Food Services industry, accounting for 22.3 percent of the total. Another 10.8 percent work in the Arts, Entertainment and Recreation industry, which equals another 3,230 residents. The construction industry employed 2,416 area residents, or 8.1 percent of the total, while Retail Trade employed 2,783 residents, or 9.3 percent of the total. The Finance, Insurance, and Real Estate industry also employed around 2,408 residents, accounting for 6.8 percent of the Region’s total resident employment. Since 2000, the number of employed residents in the Tahoe Region declined by 9.7 percent, from 33,015 to 29,827, for a total loss of 3,188 employed residents. With an average annual decline of 0.8 percent, the Region appears to be losing employed residents more slowly than it is losing population. The industry sectors that experienced the most rapid loss of employed residents include Arts, Entertainment, and Recreation, which declined in the number of employed residents by 20.4 percent, or 826 workers. Other significant losses occurred in Construction, Retail Trade, and Manufacturing. The reduction in the number of residents employed in these industries is largely the result of the recent economic downturn. Because these industries are closely tied to tourism and

26

the general health of the economy, resident employment in these industries is likely to increase with improved economic conditions. Only five industry sectors increased in the number of residents they employed between 2000 and 2013. These include Information; Management of Companies and Enterprises; Administrative Support and Waste Services; and Health Care and Social Services. Most of the gains were relatively small, with the exception of Administrative Support and Waste Services, which added 1,276 employed residents. In the Tahoe Area Counties, the number of employed residents increased by 28.9 between 2000 and 2013, adding 117,766 new employed residents. Some of these may be existing residents who became newly employed during the study period. Others may be new residents who moved into Tahoe Area Counties either before, or after, securing employment. Only three industry sectors declined in the number of employed residents. These are Arts, Entertainment, and Recreation; Information; and Agriculture, Natural Resources, and Mining. The Arts and Recreation sector declined by 7.2 percent, contracting by more than 2,000 employed residents. The Information sector contracted by 8.5 percent, or 902 employed residents, while the Agricultural sector contracted by 6.8 percent, or 290 employed residents. The sectors that experienced the greatest gains include Health Care and Social Services; Transportation, Warehousing, and Utilities; Educational Services; Professional, Scientific, and Technical Services; and Public Administration. More than 10,000 additional area residents became employed in each of these industry sectors during the past decade. By far the largest expansion was the Health Care sector, which added expanded by 23,000 employed residents.

27

Table 9: Employed Civilian Population by Industry, 2000 and 2013 Tahoe Region

Industry Sectors Agriculture, Natural Resources, and Mining Construction Manufacturing Wholesale Trade Retail Trade Transportation, Warehousing, and Utilities Information Finance, Insurance, and Real Estate Professional, Scientific, and Technical Services Management of Companies and Enterprises Administrative Support and Waste Services Educational Services Health Care and Social Arts, Entertainment, and Recreation Accommodation and Food Services Other Services, Except Public Administration Public Administration Total, All Industries

2000 Number Percent 342 1.0% 2,998 9.1% 903 2.7% 454 1.4% 3,368 10.2% 1,101 3.3% 696 2.1% 2,408 7.3% 1,880 5.7% 0 0.0% 1,071 3.2% 2,120 6.4% 2,058 6.2% 4,058 12.3% 6,930 21.0% 1,389 4.2% 1,239 3.8% 33,015 100%

2013 (Est.) Number Percent 226 0.8% 2,416 8.1% 493 1.7% 277 0.9% 2,783 9.3% 1,112 3.7% 303 1.0% 2,017 6.8% 1,680 5.6% 11 0.0% 2,347 7.9% 1,783 6.0% 2,125 7.1% 3,232 10.8% 6,637 22.3% 1,435 4.8% 950 3.2% 29,827 100%

Absolute Change (116) (582) (410) (177) (585) 11 (393) (391) (200) 11 1,276 (337) 67 (826) (293) 46 (289) (3,188)

Percent Change -33.9% -19.4% -45.4% -39.0% -17.4% 1.0% -56.5% -16.2% -10.6% n.a. 119.1% -15.9% 3.3% -20.4% -4.2% 3.3% -23.3% -9.7%

Average Annual Change -3.1% -1.6% -4.5% -3.7% -1.5% 0.1% -6.2% -1.4% -0.9% n.a. 6.2% -1.3% 0.2% -1.7% -0.3% 0.3% -2.0% -0.8%

2000 Number Percent 4,271 1.0% 34,436 8.5% 35,084 8.6% 14,156 3.5% 47,725 11.7% 20,057 4.9% 10,663 2.6% 29,058 7.1% 24,696 6.1% 104 0.0% 13,989 3.4% 29,397 7.2% 37,667 9.3% 28,167 6.9% 33,547 8.2% 17,535 4.3% 26,636 6.5% 407,188 100%

2013 (Est.) Number Percent 3,981 0.8% 37,171 7.1% 36,399 6.9% 15,416 2.9% 67,168 12.8% 25,489 4.9% 9,761 1.9% 38,869 7.4% 36,598 7.0% 144 0.0% 22,812 4.3% 42,103 8.0% 60,726 11.6% 26,134 5.0% 42,862 8.2% 22,602 4.3% 36,719 7.0% 524,954 100%

Absolute Change (290) 2,735 1,315 1,260 19,443 5,432 (902) 9,811 11,902 40 8,823 12,706 23,059 (2,033) 9,315 5,067 10,083 117,766

Percent Change -6.8% 7.9% 3.7% 8.9% 40.7% 27.1% -8.5% 33.8% 48.2% n.a. 63.1% 43.2% 61.2% -7.2% 27.8% 28.9% 37.9% 28.9%

Average Annual Change -0.5% 0.6% 0.3% 0.7% 2.7% 1.9% -0.7% 2.3% 3.1% n.a. 3.8% 2.8% 3.7% -0.6% 1.9% 2.0% 2.5% 2.0%

Tahoe Area Counties

Industry Sectors Agriculture, Natural Resources, and Mining Construction Manufacturing Wholesale Trade Retail Trade Transportation, Warehousing, and Utilities Information Finance, Insurance, and Real Estate Professional, Scientific, and Technical Services Management of Companies and Enterprises Administrative Support and Waste Services Educational Services Health Care and Social Arts, Entertainment, and Recreation Accommodation and Food Services Other Services, Except Public Administration Public Administration Total, All Industries

Notes: (a) The Tahoe Region is defined based on 2000 and 2010 Census Tracts, to approximate the area encompassed w ithin the jurisdiction of the Tahoe Regional Planning Compact. For a complete listing of the included Census Tracts, please refer to Appendix A. (b) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. Sources: Census 2000, SF3, 2013; Claritas, Inc., 2013; BAE, 2013.

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Employed Residents by Occupation Table 10 provides information on the number of employed residents in the Tahoe Region and Tahoe Area Counties by occupational type. According to these data, the most workers in the Tahoe Region are either white collar or service industry employees. The three dominant occupational categories are Food Preparation and Serving Related occupations, Sales and Related occupations, and Management occupations. These three occupational groups account for 13.0, 11.0, and 11.1 percent of the workforce, respectively. Other notable occupational types in the Region include Building and Grounds Clearing and Maintenance, Personal Care and Service, Office and Administrative Support, and Construction and Extraction occupations. As discussed earlier, the number of employed residents in the Tahoe Region declined since 2000. For the most part, the number of area residents who worked in any given occupation decreased. Only five occupations saw increases in the number of residents employed. These include Healthcare Practitioners, Healthcare, Food Preparation and Serving, Building and Grounds Clearing, and Transportation and Material Moving. The number of residents employed in these occupations increased by 1,395, or around 17 percent compared to 2000 levels. In contrast, in the Tahoe Area Counties resident employment expanded in nearly all of the reported occupational categories. The only contraction occurred in the Farming, Fishing, and Forestry occupations, which shrunk by 625 employed residents. Notable changes to the distribution of employed residents, by occupation, include the rapid expansion of resident employment in the healthcare occupations. For example, the number of Tahoe Area Counties residents employed as Healthcare Practitioners nearly doubled during the past decade, expanding by 5,326 workers.

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Table 10: Employed Civilian Population by Occupation, 2003 and 2013 Tahoe Region (a)

Standard Occupational Classification Management Occupations Business and Financial Operations Occupations Computer and Mathematical Occupations Architecture and Engineering Occupations Life, Physical, and Social Science Occupations Community and Social Services Occupations Legal Occupations Education, Training, and Library Occupations Arts, Design, Entertainment, Sports, and Media Occupations Healthcare Practitioners and Technical Occupations Healthcare Support Occupations Protective Service Occupations Food Preparation and Serving Related Occupations Building and Grounds Clearing and Maintenance Occupations Personal Care and Service Occupations Sales and Related Occupations Office and Administrative Support Occupations Farming, Fishing, and Forestry Occupations Construction and Extraction Occupations Installation, Maintenance, and Repair Occupations Production Occupations Transportation and Material Moving Occupations Total, All Occupations

2000 Number Percent 3,386 10.3% 1,246 3.8% 500 1.5% 348 1.1% 223 0.7% 381 1.2% 365 1.1% 1,547 4.7% 1,068 3.2% 865 2.6% 329 1.0% 938 2.8% 3,650 11.1% 1,931 5.8% 2,426 7.3% 4,005 12.1% 3,799 11.5% 201 0.6% 2,630 8.0% 1,053 3.2% 887 2.7% 1,237 3.7% 33,015 100%

2013 (Est.) Number Percent 3,319 11.1% 917 3.1% 392 1.3% 276 0.9% 148 0.5% 173 0.6% 168 0.6% 1,270 4.3% 758 2.5% 1,138 3.8% 513 1.7% 879 2.9% 3,869 13.0% 2,485 8.3% 2,280 7.6% 3,275 11.0% 2,900 9.7% 130 0.4% 2,019 6.8% 730 2.4% 786 2.6% 1,402 4.7% 29,827 100%

Absolute Change (67) (329) (108) (72) (75) (208) (197) (277) (310) 273 184 (59) 219 554 (146) (730) (899) (71) (611) (323) (101) 165 (3,188)

Percent Change -2.0% -26.4% -21.6% -20.7% -33.6% -54.6% -54.0% -17.9% -29.0% 31.6% 55.9% -6.3% 6.0% 28.7% -6.0% -18.2% -23.7% -35.3% -23.2% -30.7% -11.4% 13.3% -9.7%

Average Annual Change -0.2% -2.3% -1.9% -1.8% -3.1% -5.9% -5.8% -1.5% -2.6% 2.1% 3.5% -0.5% 0.4% 2.0% -0.5% -1.5% -2.1% -3.3% -2.0% -2.8% -0.9% 1.0% -0.8%

2000 Number Percent 41,919 10.3% 19,474 4.8% 9,404 2.3% 9,093 2.2% 3,603 0.9% 4,705 1.2% 4,859 1.2% 20,611 5.1% 7,650 1.9% 17,579 4.3% 5,370 1.3% 9,657 2.4% 23,306 5.7% 14,524 3.6% 19,199 4.7% 49,465 12.1% 63,384 15.6% 1,583 0.4% 25,015 6.1% 15,151 3.7% 20,229 5.0% 21,408 5.3% 407,188 100%

2013 (Est.) Number Percent 58,869 11.2% 27,783 5.3% 12,438 2.4% 10,782 2.1% 4,788 0.9% 6,069 1.2% 5,870 1.1% 29,159 5.6% 8,525 1.6% 27,475 5.2% 10,696 2.0% 14,747 2.8% 30,763 5.9% 19,199 3.7% 24,218 4.6% 66,852 12.7% 75,566 14.4% 958 0.2% 25,864 4.9% 16,703 3.2% 20,807 4.0% 26,823 5.1% 524,954 100%

Absolute Change 16,950 8,309 3,034 1,689 1,185 1,364 1,011 8,548 875 9,896 5,326 5,090 7,457 4,675 5,019 17,387 12,182 (625) 849 1,552 578 5,415 117,766

Percent Change 40.4% 42.7% 32.3% 18.6% 32.9% 29.0% 20.8% 41.5% 11.4% 56.3% 99.2% 52.7% 32.0% 32.2% 26.1% 35.2% 19.2% -39.5% 3.4% 10.2% 2.9% 25.3% 28.9%

Average Annual Change 2.6% 2.8% 2.2% 1.3% 2.2% 2.0% 1.5% 2.7% 0.8% 3.5% 5.4% 3.3% 2.2% 2.2% 1.8% 2.3% 1.4% -3.8% 0.3% 0.8% 0.2% 1.7% 2.0%

Tahoe Area Counties (b)

Standard Occupational Classification Management Occupations Business and Financial Operations Occupations Computer and Mathematical Occupations Architecture and Engineering Occupations Life, Physical, and Social Science Occupations Community and Social Services Occupations Legal Occupations Education, Training, and Library Occupations Arts, Design, Entertainment, Sports, and Media Occupations Healthcare Practitioners and Technical Occupations Healthcare Support Occupations Protective Service Occupations Food Preparation and Serving Related Occupations Building and Grounds Clearing and Maintenance Occupations Personal Care and Service Occupations Sales and Related Occupations Office and Administrative Support Occupations Farming, Fishing, and Forestry Occupations Construction and Extraction Occupations Installation, Maintenance, and Repair Occupations Production Occupations Transportation and Material Moving Occupations Total, All Occupations

Notes: (a) The Tahoe Region is defined based on 2000 and 2010 Census Tracts, to approximate the area encompassed w ithin the jurisdiction of the Tahoe Regional Planning Compact. For a complete listing of the included Census Tracts, please refer to Appendix A. (b) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. Sources: Census 2000, 2013; Claritas, Inc., 2013; BAE, 2013.

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Worker Commuting Patterns Table 11 presents the available data on the flow of workers in and out of the Tahoe Region. (Note that these data come from a source which differs from the source used for Table 10 and do not cover the same total number of employed residents.) As of 2011, the data indicate that 54 percent of the people who are employed in jobs located within the Region lived outside the Region. Conversely, the data indicate that around 49 percent of the employed people living within the Region commuted to jobs located outside the Region. Overall, these data indicate that on a typical workday, approximately 11,880 workers commute into the Tahoe Region to fill available jobs and approximately 9,980 residents commute out of the Region to work. Table 11: Commute Flows, Tahoe Region, 2011 Em ployed in Region Live Outside Region/In-Commuters Live Within Region Living Within Region Work Outside Region/Out-Commuters Work Within Region Net Inflow /Outflow

Count 22,200 11,884 10,316

Share 100% 54% 46%

20,292 9,976 10,316

100% 49% 51%

1,908

Source: U.S Census, Center for Economic Studies, 2013; BAE, 2013.

Population, Household and Employment Projections, 2010-2035 The Regional Plan adopted by the TRPA Governing Board authorizes a relatively small number of new development allocations, while simultaneously incentivizing transfers of development rights and removing obstacles to redevelopment. According to Table 50.4.1 of the TRPA Code of Ordinances, the Regional Plan will make available a total of 2,714 residential allocations, 1,474 residential bonus units, 583,579 square feet of commercial floor area (CFA) and 342 tourist bonus units. The rate of growth for the number of housing units is limited by Regional Plan policy that calls for a maximum of 130 residential allocations be released annually; however, the actual number of housing units constructed can increase beyond 130 per year, if residential bonus units are allocated to incentivize transfers or for the development of affordable housing. The Draft Environmental Impact Statement (EIS) for the Regional Plan Update provided projections of the increased Tahoe Region population, housing, and employment from 2010 through 2035, for the different Regional Plan Alternatives, including Alternative 3, which was the basis for the Regional Plan ultimately adopted by the TRPA Governing Board. The projections were based on land use and transportation modeling conducted for the Regional Plan Update and the Regional Transportation Plan/Sustainable Community Strategy. The adopted Regional Plan includes the same quantity of new development commodities that would have been provided under Alternative 3; however, the adopted Regional Plan prohibits the release of the 200,000 square feet of new Commercial Floor Area (CFA) until the 383,579 square feet of CFA remaining from the 1987 Regional Plan is exhausted, and also restricts the use of the 600 new residential bonus units to sites within Centers.

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Table 12 presents the Draft EIS’ projections of new development through 2035, under Alternative 3. 5 The EIS projections estimated that the Tahoe Region would add approximately 4,160 new housing units, of which 1,904 would be occupied by permanent resident households, increasing the Tahoe Region’s full-time population by 5,900. The EIS projected that the use of CFA and tourist bonus units would translate into approximately 1,200 new jobs by 2035. Because of this new growth and development, the Draft EIS projected that the regional jobs-housing ratio would decline from 0.48 to 0.46. However, when controlled to account for the Region’s high vacancy rate, the jobshousing ratio for permanent occupied housing units shows a decline from 1.02 to 0.99. Table 12: Population, Employment, and Housing, Tahoe Region, 2010 and 2035 (Proj.)(a)

Population Households Housing Units Payroll Employees (b) Commercial (Sq. Ft.) Tourist Units Jobs/Housing Ratio Jobs/Households Ratio (c)

2010 54,473 22,147 47,392 22,605 6,500,000 12,399 0.48 1.02

2035 (Proj.) 60,365 24,051 51,552 23,804 7,047,000 12,746 0.46 0.99

Absolute Change 5,892 1,904 4,160 1,199 547,000 347 (0.02) (0.03)

Percent Change 10.8% 8.6% 8.8% 5.3% 8.4% 2.8% -4.2% -2.9%

Average Annual Change 0.4% 0.3% 0.3% 0.2% 0.3% 0.1% -0.2% -0.1%

Notes: (a) Figures reported are from Table 3.12-2 of the Regional Plan Draft EIS for Alternative 3. (b) Excludes w orkers employed by businesses w ith tw o or few er employees. (c) Equal to the jobs/housing ratio, excluding housing left vacant for seasonal or recreational use. Sources: TRPA, Regional Plan Update Final EIS, 2012; BAE, 2014.

The Final EIS found that the adopted Regional Plan would delay the development of new CFA in some areas, compared to what would have been expected under Alternative 3 without the restriction on using new CFA until the remaining CFA from the 1987 Regional Plan is exhausted first. The Final EIS also found that the restriction on the use of the 600 new residential bonus units to sites within Centers only would promote concentration of new housing in Centers. 6 Lake Vista Apartments, Stateline, NV Located within the Kingsbury Town Center

5

TRPA Regional Plan Update Draft EIS, Table 3.12-2.

6

TRPA Regional Plan Update Final EIS – Volume 1, page 2-2.

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HOUSING STOCK CONDITIONS The following section details the housing conditions in the Tahoe Region and compares the existing conditions to those present in the Tahoe Area Counties. Data sources used for the analysis include the 2000 and 2010 Census, the 2007-2011 ACS, the California Department of Finance (DoF), U.S. Department of Housing and Urban Development (HUD), the California Department of Housing and Community Development (HCD), Claritas, Inc., and Dataquick, a private real estate transactions data vendor. BAE staff collected information regarding local multifamily rental market conditions directly from a sampling of area multifamily property owners and managers.

Blackwood Apartments, South Lake Tahoe, CA

Housing Stock Characteristics Table 13 reports the number of housing units by type in the Tahoe Region and Tahoe Area Counties. Single-family housing units are clearly more prevalent in the Tahoe Region than are multifamily housing units. Single-family homes, both attached and detached, accounted for 78 percent of the total housing stock in 2013, equal to roughly 37,700 total units. This represents an increase of two percentage points from 2000 levels. Multifamily housing units accounted for 20 percent of the housing stock, which equals 9,710 units. This is down one percentage point from 2000. In prior years, there was a relatively even split between multifamily housing units with two to four units, compared to those with five or more. However, the data suggest that the Region has gained roughly 920 new multifamily units in smaller complexes that have between two and four housing units. The region has likewise lost more than 900 multifamily units in larger complexes, with five or more units. Because of this re-shuffling, the Region has reportedly gained a net of only 20 new multifamily housing units since the year 2000. Mobile home units represent only a small percentage of the total housing stock in the Region, accounting for only 2.2 percent of all housing units. Single-family housing units, both attached and detached, accounted for 75 percent of the total housing stock in Tahoe Area Counties. This equals nearly 361,540 total units. Multifamily housing accounts for around 20 percent of the total housing stock in this larger area, representing 98,925

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housing units. This overall distribution suggests that the distribution of the housing stock, by type, in the Tahoe Region is generally consistent with broader regional trends. One notable difference, however, is that the portion of the housing stock that is made up of mobile home units. In 2013, roughly 22,500 mobile home units were present in the Tahoe Area Counties, representing 4.8 percent of the total housing stock. In the Tahoe Region, there are only around 1,000 mobile home units, representing only 2.2 percent of the regional housing stock. These data suggest that the region may be somewhat underrepresented in this housing type, one that is considered one of the primary forms of affordable housing in many rural communities throughout California and Nevada. However, due to the Region’s alpine climate, where snow loading and other factors are an issue, mobile and manufactured homes may not be the most suitable form of housing. Table 13: Housing Stock Characteristics, 2000 and 2013 Tahoe Region (a) 2000 Units in Structure Detached Single Family Attached Single Family 2 to 4 units 5 or more units Mobile Homes Boats, RV's, Vans, Other Total Housing Units (c)

Number 31,701 3,204 4,638 5,058 1,250 29 45,880

2013 Percent 69.1% 7.0% 10.1% 11.0% 2.7% 0.1% 100%

Number 35,363 2,343 5,558 4,152 1,051 78 48,545

Percent 72.8% 4.8% 11.4% 8.6% 2.2% 0.2% 100%

Tahoe Area Counties (b) 2013 2000 Percent Percent Number Number 342,682 70.7% 240,828 66.4% 4.3% 18,855 3.9% 15,585 6.6% 29,426 6.1% 23,994 15.4% 69,499 14.3% 55,732 4.8% 23,499 25,795 7.1% 0.2% 803 843 0.2% 484,764 100% 362,777 100%

Notes: (a) The Tahoe Region is defined based on 2000 and 2010 Census Tracts, to approximate the area encompassed w ithin the jurisdiction of the Tahoe Regional Planning Compact. For a complete listing of the included Census Tracts, please refer to Appendix A. (b) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. (c) The 2000 total unit count differs from that reported in Table 13 due to the use of data from Summary File 3 versus Summary File 1. Sources: Census 2000, 2013; Claritas, Inc., 2013; BAE, 2013.

Skylark RV and Mobilehome Park, South Lake Tahoe, CA

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Overcrowding The U.S. Census Bureau defines overcrowded housing units as those with more than one person per room. Table 14 reports Census estimates of overcrowding in the Tahoe Region and Tahoe Area Counties. Please note that the information provided is from the 2000 Census, as well as the 20072011 ACS, which reflects the average trend over a five-year period. According to these data, the incidence of overcrowding decreased since 2000 in both study areas. In the Tahoe Region, 3.4 percent of owner households and 16.2 percent of renter households experienced overcrowding in 2000. This decreased to 2.2 percent among owner households and 10.2 percent among renter households between 2007 and 2011, with a total of 1,232 households experienced overcrowding. In Tahoe Area Counties, 3.0 percent of owner households and 12.4 percent of renter households experienced overcrowding in 2000. This dropped to 1.3 percent among owner households and 6.2 percent among renter households between 2007 and 2011, which equaled around 11,650 households. Table 14: Overcrowding by Tenure, 2000 and 2007-2011 Tahoe Region (a) 2000 2007-2011 (c) Number Percent Number Percent

Tahoe Area Counties (b) 2000 2007-2011 (c) Number Percent Number Percent

14,448 287 135 93 14,963

96.6% 1.9% 0.9% 0.6% 100%

12,064 171 86 15 12,336

97.8% 1.4% 0.7% 0.1% 100%

209,046 4,014 1,759 801 215,620

97.0% 1.9% 0.8% 0.4% 100%

265,759 2,682 529 304 269,274

98.7% 1.0% 0.2% 0.1% 100%

Renter Occupied Units 1.00 Person or Less 1.01 - 1.50 Persons 1.51 - 2.00 Persons 2.01 Persons or More Subtotal: Renter-Occupied

8,749 688 520 480 10,437

83.8% 6.6% 5.0% 4.6% 100%

8,480 578 259 123 9,440

89.8% 6.1% 2.7% 1.3% 100%

92,299 5,686 4,510 2,862 105,357

87.6% 5.4% 4.3% 2.7% 100%

123,489 5,971 1,815 352 131,627

93.8% 4.5% 1.4% 0.3% 100%

Total Households

25,400

Persons Per Room Ow ner Occupied Units 1.00 Person or Less 1.01 - 1.50 Persons 1.51 - 2.00 Persons 2.01 Persons or More Subtotal: Ow ner-Occupied

21,776

320,977

400,901

Notes: (a) The Tahoe Region is defined based on 2000 and 2010 Census Tracts, to approximate the area encompassed w ithin the jurisdiction of the Tahoe Regional Planning Compact. For a complete listing of the included Census Tracts, please refer to Appendix A. (b) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. (c) Data for the period from 2007 to 2011 are American Community Survey (ACS) five year estimates. (d) The 2000 total households figure differs from Table 1 due to the use of data from Summary File 3 versus Summary File 1. Sources: 2007-2011 American Community Survey, 2013; Claritas, Inc., 2013; BAE, 2013.

Housing Cost Burden Tables 15 and 16 present data on housing cost burden for owner and renter households in the Tahoe Region and Tahoe Area Counties, by income category. The data are from the same 20062010 CHAS data set described earlier for Tables 6 and 7. As noted previously, the Census Bureau collects the data via a multi-year survey and estimates therefore should be interpreted with caution. BAE aggregated estimates for the Tahoe Region from Census Tract level data, which are known to lack statistical reliability in certain cases. Therefore, these estimates should only be considered as a

35

rough indicator and should not be interpreted as precise estimates. Figures reported for the Tahoe Area Counties are based on county level data, and provide improved statistical reliability, compared to tract-based estimates. 7 As discussed above, household income categories are defined in relation to the HUD Area Median Family Income, or HAMFI. HUD estimates monthly housing cost burden as a share of a household’s monthly income. As discussed previously, the measure of an excessive cost burden for housing is one that exceeds 30 percent, but is less than 50 percent, of a household’s monthly income. A severe cost burden is one that exceeds 50 percent of the monthly household income. For renters, housing cost burden includes rent plus utility charges. For owners, utility charges are not included, but mortgage principal, interest, property taxes, and insurance (PITI) are included in the cost burden calculation. All Income Levels. Among households of all incomes in the Tahoe Region, 45 percent had housing cost burdens greater than 30 percent of income. Owner households with excessive or severe cost burdens accounted for 46 percent of the total owner households, while renters with excessive or severe cost burdens accounted for 44 percent of all renter households. Extremely Low-Income Households. The overall percentage of extremely low-income households in the Tahoe Region that experienced excessive or severe housing cost burdens was 90 percent. In this income category, 89 percent of owner households experienced excessive or severe housing cost burdens, as did 91 percent of renter households. The majority of households in this income category that experienced high housing cost burdens (i.e., 74 percent of owner households and 78 percent of renter households) had estimated cost burdens equal to greater than 50 percent of the household income. Very Low-Income Households. The overall percentage of very low-income households in the Tahoe region with excessive or severe housing cost burdens was 10 percentage points less than for extremely low-income households, but was still equal to 80 percent of all very low-income households. Among all very low-income households, 70 percent of owner households, and 86 percent of renters, experienced excessive or severe cost burdens. Low-Income Households. Moving up the income ladder, the prevalence of excessive or severe housing cost burdens for low-income households was less, compared to extremely low- and very lowincome households in the Tahoe Region. In this income category, the rate of overpayment decreased, with 53 percent of low-income households paying greater than 30 percent of income for housing. The rate of overpayment was slightly higher among low-income owner households at 57 percent, compared to 49 percent among low-income renter households.

7

While aggregation can improve reliability, a lack of information regarding covariance makes the margins of

error for derived estimates unreliable, when aggregating more than four geographies. In the absence of reliable margin of error estimates, the relative reliability of derived estimates cannot be determined.

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Moderate and Above Income Households. The percentage of moderate- and above-moderate income households in the Tahoe Region with excessive or severe housing cost burdens was significantly less than for lower-income households, at 27 percent. Within this income category, the percentage of households with excessive or severe cost burdens were 30 percent and 14 percent, among owner and renter households, respectively. Overall within the Tahoe Region, the proportion of households in the lower-income categories (i.e. extremely low-, very low-, and low-income) that reported experiencing excessive or severe housing cost burdens was significantly higher, compared to households in the moderate- and abovemoderate income category. Renter households among the lower income categories were slightly more likely to overpay for housing. Conversely, in the moderate- and above-moderate income category, owner households were notably more likely to over pay for housing. These trends generally coincide with the housing cost burden trends identified in Table 16, for the Tahoe Area Counties. In aggregate, renter households in the Tahoe Region were less likely to experience a high housing cost burden, compared to renter households in the Tahoe Area Counties. With higher than average regional housing costs, the lower prevalence of excessive or severe cost burdens among renter households is most likely associated with a higher prevalence of overcrowding, as reported in Table 14. Despite this, owner households and extremely low-income renter households in the Region are still more likely to overpay for housing, compared to the Tahoe Area Counties.

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Table 15: Household Cost Burden, Tahoe Region, 2006-2010 (a)

Ow ner Households With ≤ 30% Housing Cost Burden With > 30%, but ≤ 50% Housing Cost Burden With > 50% Housing Cost Burden Not Computed (No or Negative Income) Subtotal: Ow ner-Occupied Households

All Incom e Levels (a) Percent Number of Total 6,914 54.2% 2,954 23.2% 2,845 22.3% 40 0.3% 12,755 100%

Extrem ely Low -Incom e (≤ 30% of HAMFI) Percent Number of Total 105 10.5% 115 11.5% 735 73.5% 40 4.0% 1,000 100%

Very Low -Incom e (> 30% ≤ 50% of HAMFI) Percent Number of Total 265 30.1% 185 21.0% 430 48.9% 0 0.0% 880 100%

Low -Incom e (> 50% ≤ 80% of HAMFI) Percent Number of Total 884 43.3% 469 23.0% 690 33.8% 0 0.0% 2,043 100%

Moderate and Above (> 80% of HAMFI) Percent Number of Total 5,660 64.1% 2,185 24.7% 990 11.2% 0 0.0% 8,830 100%

Renter Households With ≤ 30% Housing Cost Burden With > 30%, but ≤ 50% Housing Cost Burden With > 50% Housing Cost Burden Not Computed (No or Negative Income) Subtotal: Renter-Occupied Households

5,134 1,979 2,003 95 9,211

55.7% 21.5% 21.7% 1.0% 100%

150 120 1,319 95 1,685

8.9% 7.1% 78.3% 5.6% 100%

220 770 514 0 1,494

14.7% 51.5% 34.4% 0.0% 101%

830 630 160 0 1,620

51% 39% 10% 0% 100%

3,934 459 10 0 4,409

89.2% 10.4% 0.2% 0.0% 100%

All Households With ≤ 30% Housing Cost Burden With > 30%, but ≤ 50% Housing Cost Burden With > 50% Housing Cost Burden Not Computed (No or Negative Income) Total Households (b)

12,048 4,933 4,848 135 21,980

54.8% 22.4% 22.1% 0.6% 100%

255 235 2,054 135 2,685

9.5% 8.8% 76.5% 5.0% 100%

485 955 944 0 2,374

20.4% 40.2% 39.8% 0.0% 100%

1,714 1,099 850 0 3,663

46.8% 30.0% 23.2% 0.0% 100%

9,594 2,644 1,000 0 13,239

72.5% 20.0% 7.6% 0.0% 100%

Notes: (a) CHAS data reflect HUD-defined household income limits. (b) Figures may not sum to totals due to rounding. Sources: HUD, 2006-2010 CHAS, 2013; BAE, 2013.

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Table 16: Household Cost Burden, Tahoe Area Counties, 2006-2010 (a) Extrem ely Low -Incom e (≤ 30% of HAMFI) Percent Number of Total 1,445 11.5% 12.8% 1,605 8,375 66.7% 9.0% 1,125 12,550 100%

Very Low -Incom e (> 30% ≤ 50% of HAMFI) Percent Number of Total 6,235 34.4% 4,030 22.2% 43.5% 7,885 0 0.0% 18,130 100%

Ow ner Households With ≤ 30% Housing Cost Burden With > 30%, but ≤ 50% Housing Cost Burden With > 50% Housing Cost Burden Not Computed (No or Negative Income) Subtotal: Ow ner-Occupied Households Renter Households With ≤ 30% Housing Cost Burden With > 30%, but ≤ 50% Housing Cost Burden With > 50% Housing Cost Burden Not Computed (No or Negative Income) Subtotal: Renter-Occupied Households

64,960 32,405 28,630 1,585 127,580

50.9% 25.4% 22.4% 1.2% 100%

2,870 2,170 16,200 1,585 22,835

12.6% 9.5% 70.9% 6.9% 100%

3,085 9,950 8,630 0 21,665

14.2% 45.9% 39.8% 0.0% 100%

11,615 13,355 3,165 0 28,135

41.3% 47.5% 11.2% 0.0% 100%

47,390 6,930 635 0 54,960

86.2% 12.6% 1.2% 0.0% 100%

All Households With ≤ 30% Housing Cost Burden With > 30%, but ≤ 50% Housing Cost Burden With > 50% Housing Cost Burden Not Computed (No or Negative Income) Total Households (b)

232,675 93,945 69,660 2,710 398,995

58.3% 23.5% 17.5% 0.7% 100%

4,315 3,775 24,575 2,710 35,385

12.2% 10.7% 69.5% 7.7% 100%

9,320 13,980 16,515 0 39,795

23.4% 35.1% 41.5% 0.0% 100%

25,500 21,470 13,365 0 60,335

42.3% 35.6% 22.2% 0.0% 100%

193,540 54,720 15,205 0 263,470

73.5% 20.8% 5.8% 0.0% 100%

Notes: (a) CHAS data reflect HUD-defined household income limits. (b) Figures may not sum to totals due to rounding. Sources: HUD, 2006-2010 CHAS, 2013; BAE, 2013.

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Low -Incom e (> 50% ≤ 80% of HAMFI) Percent Number of Total 43.1% 13,885 8,115 25.2% 10,200 31.7% 0 0.0% 32,200 100%

Moderate and Above (> 80% of HAMFI) Percent of Total Number 70.1% 146,150 47,790 22.9% 14,570 7.0% 0 0.0% 100% 208,510

All Incom e Levels (a) Percent Number of Total 167,715 61.8% 61,540 22.7% 41,030 15.1% 1,125 0.4% 271,410 100%

Age of Housing Stock The housing stock in the Tahoe Region, as reported in Table 17 and Figure 5, is significantly older than in the Tahoe Area Counties more broadly. Only around 3,300 housing units, or 6.8 percent of the total housing stock, were built in the Tahoe Region prior to 1950. Between 1950 and 1989, the Region added nearly 38,440 housing units, which is equal to more than 79 percent of the current housing stock. Since 1990, the rate of development has slowed substantially, with 4,792 units constructed through 1999, equal to 9.9 percent, and around 2,000 unit constructed since 2000, representing only 4.1 percent of the current housing supply. In the Tahoe Area Counties, the bulk of the housing stock was constructed between 1970 and 2004. Nearly 20 percent of the housing stock was built prior to 1970, while more than 72 percent was constructed between 1970 and 2004. Since 2004, this larger area has added more than 39,740 new housing units, equal to 8.2 percent of the current stock. Figure 5: Percent of Housing Stock by Year Built 40.0% 30.0% 20.0% 10.0% 0.0%

2005 or Later

2000 to 2004

1990 to 1999

1980 to 1989

1970 to 1979

Lake Tahoe Region

1960 to 1969

1950 to 1959

1940 1939 to or 1949 Earlier

Tahoe Area Counties

Sources: Census 2000, 2013; Claritas, Inc., 2013; BAE, 2013. Table 17: Housing Stock by Year Built Units in Structure Built 2005 or Later Built 2000 to 2004 Built 1990 to 1999 Built 1980 to 1989 Built 1970 to 1979 Built 1960 to 1969 Built 1950 to 1959 Built 1940 to 1949 Built 1939 or Earlier Total Housing Units

Tahoe Region (a) Number Percent 548 1.1% 1,457 3.0% 4,792 9.9% 8,031 16.5% 16,635 34.3% 8,887 18.3% 4,886 10.1% 1,800 3.7% 1,509 3.1% 48,545 100%

Tahoe Area Counties (b) Number Percent 39,741 8.2% 79,124 16.3% 95,844 19.8% 83,571 17.2% 91,087 18.8% 42,246 8.7% 27,029 5.6% 11,696 2.4% 14,426 3.0% 484,764 100%

Notes: (a) The Tahoe Region is defined based on 2010 Census Tracts, to approximate the area encompassed w ithin the jurisdiction of the Tahoe Regional Planning Compact. For a complete listing of the included Census Tracts, please refer to Appendix A. (b) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. Sources: Claritas, Inc., 2013; BAE, 2013.

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Occupancy Rates As presented in Table 18 above, the Census Bureau recorded a residential vacancy rate of 45 percent in the Tahoe Region in 2000, compared to only 12 percent in Tahoe Area Counties. This was almost entirely attributable to the high number of units left vacant “for seasonal, recreational, or occasional use.” Of the 20,249 housing units reported as vacant in 2000, nearly 89 percent were vacant due to seasonal or recreational use. Subtracting these units from the vacant units total gave an eight percent vacancy rate for the Tahoe Region and a five percent vacancy rate for Tahoe Area Counties, which more appropriately reflects the vacancy rate in 2000 for homes intended for yearround occupancy. Typically, a vacancy rate between four and six percent is an indicator of a healthy housing market, which makes a variety of housing options available to households. According to the 2007-2011 ACS, the average vacancy rate in the Tahoe Region was around 55 percent. Of the 23,181 housing units reported as vacant, approximately 87 percent were vacant due to seasonal or recreational use, which is 1.7 percentage points decrease in the share of recreation units, compared to 2000. However, as a percentage of the total housing stock, the prevalence of seasonal and recreational units has increased from nearly 40 percent in 2000 to 48 percent between 2007 and 2011. This increase from 18,200 seasonal units to 23,200 seasonal units, accounts for the vast majority of the increase in the overall vacancy rate since 2000. Subtracting these units from the total vacant units figure, the vacancy rate drops to 13 percent, which is still high compared to the year 2000. This rate is a function of an increase in the number of units that are vacant due to being listed for rent or for-sale, which increased as a percentage of the total housing stock by 0.9 and 0.6 percentage points, respectively. Also, the “other vacant” category increased as a share of the total housing stock by 0.9 percentage points. This category represents ancillary housing types, such as units occupied by a caretaker or janitor, and those held vacant for personal reasons. However, units held vacant for seasonal and recreational uses increased by 8.3 percentage points, vastly outpacing growth in all of the other vacancy categories.

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Table 18: Housing Occupancy and Vacancy Status, 2000 and 2007-2011

Occupancy Status Occupied Housing Units Vacant Housing Units For rent For sale only Rented or sold, not occupied For seasonal or occasional use For migrant workers Other vacant (d) Total Housing Units (e)

Tahoe Region (a) 2000 2007-2011 (c) Number Percent Number Percent 25,390 55% 21,776 45% 20,449 45% 26,576 55% 1,044 2.3% 1,540 3.2% 322 0.7% 622 1.3% 346 0.8% 293 0.6% 18,184 39.7% 23,181 47.9% 15 0.0% 0 0.0% 538 1.2% 940 1.9% 45,839 100% 48,352 100%

Tahoe Area Counties (b) 2000 2007-2011 (c) Number Percent Number Percent 320,977 88% 400,901 85% 41,800 12% 68,547 15% 7,996 2.2% 12,801 2.7% 3,405 0.9% 7,334 1.6% 1,781 0.5% 3,011 0.6% 25,004 6.9% 34,305 7.3% 93 0.0% 39 0.0% 3,521 1.0% 11,057 2.4% 362,777 100% 469,448 100%

Notes: (a) The Tahoe Region is defined based on 2000 and 2010 Census Tracts, to approximate the area encompassed w ithin the jurisdiction of the Tahoe Regional Planning Compact. For a complete listing of the included Census Tracts, please refer to Appendix A. (b) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. (c) Data for the period from 2007 to 2011 are American Community Survey (ACS) five year estimates. (d) If a vacant unit does not fall into any of the classifications specified above, it is classified as "other vacant." For example, this category includes units held for occupancy by a caretaker or janitor, and units held by the ow ner for personal reasons. (e) The 2000 total unit count differs from that reported in Table 9 due to the use of data from Summary File 1 versus Summary File 3. Sources: 2007-2011 American Community Survey, 2013; Claritas, Inc., 2013; BAE, 2013.

Housing Units by Size and Tenure Table 19 reports the number of housing units by unit size (defined by the number of bedrooms), household tenure, and vacancy status. As discussed above, the majority of vacant units reported by the Census Bureau were held vacant for seasonal or occasional use. As such, these units were not available for year-round occupancy. For the purposes of this analysis, only those units reported as renter occupied were considered part of the existing rental housing stock. About 14 percent of the Tahoe Region’s permanently occupied housing units are one-bedroom units or studio type units. However, according to the data presented in Table 20, about 30 percent of the permanent resident households have just one person, and another 38 percent have two persons. This suggests that there may be a mismatch between the Region’s housing stock, which is biased towards larger units, and the Region’s households, of which more than two-thirds include only one or two people. Assuming that households may have a need for up to one bedroom per household member, then one- and two-person households might need units with up to two bedrooms. In the Tahoe Region, there are 15,057 one- or two-person households, but only 9,003 permanently-occupied housing units with zero, one, or two bedrooms. This means that a relative scarcity of smaller housing units may be contributing to up to about 6,000 Tahoe Region households living in larger housing units than necessary. This mismatch may be exacerbated if the Region follows national trends towards increases in the proportion of households without children and people living alone. The data indicate that between 2007 and 2011, around 85 percent of renter households lived in units with one- to three-bedrooms. Table 20 reports households by tenure and household size, during the same. These data suggest more than 88 percent of renter households had between oneand four-persons, while 64 percent had only one or two residents. Comparison between the two sets

42

of figures suggests that there was a shortfall of small housing units, most appropriate to accommodate single-person households. In particular, there were only 2,629 reported studio and one-bedroom units, but an estimated 3,239 single-person households. This difference suggests that an estimated 610 single-person households were likely forced into rental housing that was larger than would otherwise be necessary. The data suggest that there was a surplus of larger housing units with two or more bedrooms, which was equal to the shortfall identified among studio and onebedroom units. Table 19: Housing Units by Size, Tenure, and Vacancy Status, 2007-2011 (a)

Unit Size No Bedroom 1-Bedroom 2-Bedrooms 3-Bedrooms 4-Bedrooms 5-Bedrooms or More Total Units, All Sizes

Ow ner Occupied Number Percent 76 0.6% 426 3.5% 2,210 17.9% 6,517 52.8% 2,485 20.1% 622 5.0% 12,336 100%

Tahoe Region (b) Renter Occupied Vacant Number Percent Number Percent 770 8.2% 637 2.4% 1,859 19.7% 1,997 7.5% 3,662 38.8% 5,983 22.5% 2,487 26.3% 10,725 40.4% 487 5.2% 5,543 20.9% 175 1.9% 1,691 6.4% 9,440 100% 26,576 100%

All Housing Units Number Percent 1,483 3.1% 4,282 8.9% 11,855 24.5% 19,729 40.8% 8,515 17.6% 2,488 5.1% 48,352 100%

Unit Size No Bedroom 1-Bedroom 2-Bedrooms 3-Bedrooms 4-Bedrooms 5-Bedrooms or More Total Units, All Sizes

Ow ner Occupied Number Percent 858 0.3% 4,857 1.8% 43,861 16.3% 129,524 48.1% 71,302 26.5% 18,872 7.0% 269,274 100%

Tahoe Area Counties (c) Renter Occupied Vacant Number Percent Number Percent 5983 4.5% 2,902 4.2% 29953 22.8% 8,135 11.9% 51045 38.8% 18,879 27.5% 34090 25.9% 23,658 34.5% 8726 6.6% 11,315 16.5% 1830 1.4% 3,658 5.3% 131,627 100% 68,547 100%

All Housing Units Number Percent 9,743 2.1% 42,945 9.1% 113,785 24.2% 187,272 39.9% 91,343 19.5% 24,360 5.2% 469,448 100%

Notes: (a) Data for the period from 2007 to 2011 are American Community Survey (ACS) five year estimates. (b) The Tahoe Region is defined based on 2000 and 2010 Census Tracts, to approximate the area encompassed w ithin the jurisdiction of the Tahoe Regional Planning Compact. For a complete listing of the included Census Tracts, please refer to Appendix A. (c) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. Sources: 2007-2011 American Community Survey, 2013; BAE, 2013.

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Table 20: Households by Size, 2007-2011 (a)

Household Size 1-Person 2-Persons 3-Persons 4-Persons 5-Persons 6-Persons 7-Persons or More Total Units, All Sizes

Ow ner Households Percent Number 27.3% 3,366 45.5% 5,608 13.6% 1,672 9.6% 1,180 2.2% 274 1.4% 169 0.5% 67 100% 12,336

Household Size 1-Person 2-Persons 3-Persons 4-Persons 5-Persons 6-Persons 7-Persons or More Total Units, All Sizes

Ow ner Households Percent Number 21.0% 56,425 40.5% 109,177 39,916 14.8% 40,066 14.9% 5.8% 15,688 1.8% 4,851 3,151 1.2% 100% 269,274

Tahoe Region (b) Renter Households Percent Number 34.3% 3,239 30.1% 2,844 13.4% 1,265 10.6% 1,005 7.6% 720 3.2% 303 0.7% 64 100% 9,440 Tahoe Area Counties (c) Renter Households Number Percent 34.6% 45,532 37,886 28.8% 19,146 14.5% 12.2% 16,104 8,199 6.2% 2.3% 3,043 1.3% 1,717 131,627 100%

All Households Percent Number 30.3% 6,605 38.8% 8,452 13.5% 2,937 10.0% 2,185 4.6% 994 2.2% 472 0.6% 131 100% 21,776

All Households Number Percent 101,957 25.4% 147,063 36.7% 14.7% 59,062 56,170 14.0% 6.0% 23,887 2.0% 7,894 4,868 1.2% 400,901 100%

Notes: (a) Data for the period from 2007 to 2011 are American Community Survey (ACS) five year estimates. (b) The Tahoe Region is defined based on 2000 and 2010 Census Tracts, to approximate the area encompassed w ithin the jurisdiction of the Tahoe Regional Planning Compact. For a complete listing of the included Census Tracts, please refer to Appendix A. (c) The Tahoe Area Counties includes the Counties of El Dorado and Placer in California, and Douglas and Washoe in Nevada, as w ell as Carson City, but does not include Alpine County. Sources: 2007-2011 American Community Survey, 2013; BAE, 2013.

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REGIONAL HOUSING MARKET CONDITIONS This section assesses the current housing market conditions in the Tahoe Region. This information is critical for evaluating the ability of the private housing market to accommodate the housing needs of local residents. The for-sale housing prices reflect single-family and condominium units sold in all areas of the Tahoe Region between December 2012 and May 2013. BAE identified rental rates for multifamily housing units through a telephone survey of property management companies and representative housing complexes located throughout the Region. An effort was made to report rates from different geographic areas, in order to provide a more nuanced perspective on rental affordability in different parts of the Tahoe Region. Affordable home purchase prices and affordable rental rates are discussed, relative to adopted HUD income limits and area median household incomes.

Foreclosures and Distressed Mortgages Like much of the nation, the national economic downturn and the foreclosure crisis heavily affected the Tahoe Region. However, in recent months, with home prices on the rise in California and Nevada, the Region has seen a dramatic reduction in the number of foreclosures and bank owned home sales throughout the Region. As of July 1, 2013, the South Lake Tahoe Multiple Listing Service showed only 18 bank owned properties. 8 The service listed another 27 residential properties as short-sales in the South Lake Tahoe area. Only one bank owned property was listed for-sale in Tahoe City, while as of June 14, 2013, there were two bank owned condominium properties listed in Incline village. 9 Overall, what these data suggest is that the effects of the national foreclosure crisis, as experienced in the Tahoe Region, are abating. As the number of short sales and bank owned properties has diminished, the regional housing market has stabilized, and both asking and sales prices have begun to creep upwards. While this will have an impact on the relative affordability of the Region’s for-sale housing stock, the data discussed below regarding forsale home prices suggest that some areas are likely to remain affordable to area residents, while others will cater more toward the higher priced second home market.

For-Sale Housing Table 21 reports average and median sales prices for single-family homes and condominiums sold in the Tahoe Region over a six-month period ending in May of 2013. According to Dataquick, there were 992 home sales in the Tahoe Region, with an average sales price of $708,845 and an average unit size of 1,887 square feet. The median sales price was somewhat lower at $362,498, with a median unit size of 1,597 square feet. The average price per square foot in the region was $376,

8

South Lake Tahoe Association of Realtors. July 1, 2013. Multiple Listing Services. Available at:

http://www.staor.org/search-properties/. 9

Tahoe Reno Property Group. June 14, 2013. Incline Village Short Sale and REO Listings. Available at:

http://www.tahoerenopropertygroup.com/blog/wp-content/uploads/2013/06/Incline-Village-Short-Sale-BankOwned-Listings-41.pdf.

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compared to a median of $227. The average lot size was nearly 19,000 square feet, or just over 0.4 of an acre, while the median was closer to 11,400 square feet, or one quarter of an acre. More than twice as many home sales occurred on the California side of the lake compared to the Nevada side. In total, 673 homes sold on the California side, compared to 319 sales on the Nevada side. Home sales in California were notably less expensive, with a median sales price of $312,500, compared to $530,000 in Nevada. The median living area was also smaller for sales that occurred in California, at 1,473 square feet, compared to 1,918 square feet in Nevada. The median price per square foot reflects these trends, with a value of $212 in California and $276 in Nevada. Overall, the majority of the home sales that occurred on the California side occurred in El Dorado County, with 453 total home sales, compared to 220 in Placer County. Within El Dorado County, 420 home sales occurred in South Lake Tahoe, compared to only seven in Meeks Bay, and 25 in Tahoma. The median sales price for Tahoe homes in El Dorado County was less than the median sales price for homes on the California side as a whole. The median living area was roughly on par with that of other home sales on the California side. Home sales in South Lake Tahoe were priced on the lower end for El Dorado County and the Tahoe Region, with a median of $275,250. The median sales price for units in Tahoma was slightly higher than the median for El Dorado County and the California side at $347,000. The median sale price in Meeks Bay was significantly higher at $688,000. Unit sales in the Placer County portion of the Tahoe Region were priced somewhat higher than in El Dorado County, and the California side more generally. The median price for units sold in Placer County communities in Tahoe was $378,500. Kings Beach and Tahoe City experienced the highest volume of home sales in Placer County. The median sales prices in these communities were $422,500 and $267,000, respectively. Despite a lower volume of total sales, the communities of Carnelian Bay, Homewood, and Tahoe Vista had higher median sales prices, ranging from $367,500 to $487,500. With only three total sales, the portion of Tahoma located in Placer County had a median sales value of $1,650,000. Washoe County accounted for the majority of the sales on the Nevada side, with a total of 250 home sales, compared to Douglas County, with a total of 69 home sales. The median sale prices in these two portions of the Region were $575,000 and $460,000, respectively. All of the home sales reported in the Washoe County occurred in Incline Village. These units showed an average value of $1,188,809, an average living area of 2,421 square feet, and a median living area of 1,931 square feet. The median sales price per square foot was notably at the higher end of what could be expected in the Region at $298. Within the Douglas County portion of the Region, sales were evenly split between Stateline and Zephyr Cove, with around 30 sales each. Nine additional sales occurred in the Glenbrook area. The median sales price in the Stateline area was $329,000, with a median living area of 1,746 square feet. In Zephyr Cove, the median sales price was significantly higher at $608,000, with a median living area of 2,026 square feet. Home sales in Glenbrook were significantly higher in value and size compared to the rest of the Region, with a median price of nearly $2.96 million, and a median living area of 2,751 square feet.

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Table 21: Single-Family Home Sales, Tahoe Region, December 2012 to May 2013

Location (a) Placer County Carnelian Bay Homewood Kings Beach Tahoe City Tahoe Vista Tahoma (c) El Dorado County Echo Lake Meeks Bay South Lake Tahoe Tahoma (c)

Transactions Number Percent 220 22.2% 37 3.7% 18 1.8% 64 6.5% 78 7.9% 20 2.0% 3 0.3%

Lot Square Average 26,384 33,686 n.a. 4,271 30,056 11,761 n.a.

Footage Median 14,375 24,829 n.a. 4,271 15,464 12,197 n.a.

Square Footage of Living Area Average Median 1,657 1,440 1,682 1,440 2,181 1,784 1,350 1,263 1,759 1,488 1,660 1,526 2,050 2,266

Price Per Square Foot of Living Area Average Median $387 $263 $358 $255 $500 $273 $264 $211 $408 $284 $439 $256 $919 $728

Sales Price (b) Average Median $640,951 $378,500 $602,595 $367,500 $1,090,446 $487,500 $356,401 $267,000 $718,563 $422,500 $728,884 $391,090 $1,883,333 $1,650,000

Average Bedroom s 2.8 2.9 3.1 2.5 2.9 2.5 3.0

453 1 7 420 25

45.7% 0.1% 0.7% 42.3% 2.5%

13,680 43,996 64,904 11,333 65,454

8,625 43,996 64,904 8,160 22,367

1,622 786 2,349 1,603 1,770

1,476 786 2,110 1,467 1,478

$251 $132 $694 $222 $525

$192 $132 $326 $188 $235

$407,037 $104,000 $1,630,071 $356,253 $929,887

$284,000 $104,000 $688,000 $275,250 $347,000

4.0 2.0 3.1 4.1 3.0

Douglas County Glenbrook Stateline Zephyr Cove

69 9 31 29

7.0% 0.9% 3.1% 2.9%

25,370 62,872 28,060 11,506

11,979 6,970 11,762 12,197

2,217 2,779 1,746 2,547

1,908 2,751 1,508 2,026

$527 $1,530 $238 $399

$241 $1,077 $218 $300

$1,167,755 $4,251,167 $415,292 $1,015,190

$460,000 $2,962,500 $329,000 $608,000

n.a. n.a. n.a. n.a.

Washoe County Incline Village

250 250

25.2% 25.2%

19,675 19,675

16,618 16,618

2,478 2,478

1,931 1,931

$480 $480

$298 $298

$1,188,809 $1,188,809

$575,000 $575,000

3.3 3.3

California Side Nevada Side

673 319

67.8% 32.2%

15,311 20,608

10,000 13,939

1,633 2,421

1,473 1,918

$296 $489

$212 $276

$483,502 $1,184,255

$312,500 $530,000

3.6 2.6

Tahoe Region

992

100%

18,888

11,437

1,887

1,597

$376

$227

$708,845

$362,498

3.3

Notes: (a) Sales locations are approximate, based on reported street address data. (b) Excludes records w ith no reported sales price and those sales valued at less than $100,000. (c) Home sales in Tahoma that occurred in the 96141 ZIP Code are reported as part of Placer County, w hile sales in the 96142 ZIP Code are reported as part of El Dorado County. Sources: DataQuick.com, 2013; BAE, 2013.

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HUD Income Limits for Section 8 and HOME Programs Two of the most widely implemented affordable housing programs are the HOME program and Housing Choice Voucher Program, or Section 8. Both are programs of the HUD, but are administered by state and local public housing agencies. Eligibility for programmatic aid is based on annual gross income and household size, as well as other considerations, such as citizenship. For Section 8 housing, a family’s income typically may not exceed 50 percent of the median income for the county, or metropolitan area, where the household resides. Median income estimates are published annually by HUD and are accompanied by associated income limits for the HOME and Section 8 programs. Table 22: HUD Income Limits, Fiscal Year 2013 Sacram ento-Arden-Arcade-Roseville, CA MSA Median Fam ily Incom e:

$70,900

Income Level Extremely Low -Income (30% MFI) Very Low -Income (50% MFI) Low -Income (80% MFI)

One $15,200 $25,350 $40,550

Num ber of People Per Household Tw o Three Four Five $17,400 $19,550 $21,700 $23,450 $28,950 $32,550 $36,150 $39,050 $46,350 $52,150 $57,900 $62,550

Six $25,200 $41,950 $67,200

Num ber of People Per Household Tw o Three Four Five $16,300 $18,350 $20,350 $22,000 $27,200 $30,600 $33,950 $36,700 $43,450 $48,900 $54,300 $58,650

Six $23,650 $39,400 $63,000

Num ber of People Per Household Tw o Three Four Five $18,800 $21,150 $23,450 $25,350 $31,300 $35,200 $39,100 $42,250 $50,050 $56,300 $62,550 $67,600

Six $27,250 $45,400 $72,600

Reno-Sparks, NV MSA Median Fam ily Incom e:

$65,200

Program Extremely Low -Income (30% MFI) Very Low -Income (50% MFI) Low -Income (80% MFI)

One $14,250 $23,800 $38,050

Douglas County, NV Median Fam ily Incom e:

$78,200

Program Extremely Low -Income (30% MFI) Very Low -Income (50% MFI) Low -Income (80% MFI)

One $16,450 $27,400 $43,800

Sources: HUD, 2013; BAE, 2013.

Table 22 reports the HUD income limits that apply to households located in various parts of the Tahoe Region. For Tahoe Region households residing in El Dorado or Placer Counties in California, HUD guidelines require the use of income limits estimated for the Sacramento-Arden ArcadeRoseville MSA. This is because the U.S. Census Bureau includes both of these counties in the definition for this larger metropolitan area for statistical purposes associated with the Census. Similarly, low-income households that seek assistance with housing located in Incline Village would be matched with income limits estimated for the Reno-Sparks MSA. For residents of Stateline, and elsewhere on Nevada’s south shore, income limits estimated for Douglas County would apply. The downside to using these income limits to estimate the affordable housing gap in the Tahoe Region is that they are based on median family income estimates that differ from that of the Tahoe Region in 2013.

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Based on 5-Year ACS data for the distribution of incomes among family households in the Tahoe Region, BAE estimates that median family income (MFI) between 2006 and 2011 was approximately $69,900. Because HUD utilized MFI data from the 2006-2010 ACS, adjusted to 2011 dollars using the CPI, this estimate can be roughly compared to the MFI figures used by HUD to generate the income limits reported in Table 22. Overall, the MFI in the Tahoe Region was $8,300 lower than the MFI for Douglas County, and $1,000 lower than the MFI for the Sacramento MSA. The Tahoe Region MFI was $4,700 higher than in the Reno-Sparks MSA.

Affordable Home Purchase Prices To identify income limits that would be more representative of households in the Tahoe Region, BAE identified other communities throughout the nation with comparable MFI estimates. Using HUD derived income limits for these communities, BAE calculated income limits for extremely low-, very low-, low-, and moderate-income households in the Region. The figures reported in Table 23 reflect the estimated sales price for housing that would be affordable to these lower income households. Similar to HUD, BAE assumes that a household can comfortably spend up to 30 percent of its gross household income on housing. These include monthly principal and interest payments, mortgage insurance, property taxes, and property insurance costs for homeowners. Mortgage assumptions are based on industry standard loan terms for first-time homebuyers, obtaining a mortgage insured by the FHA, and are as follows: • • • • • • •

Down Payment: 3.5 Percent Annual Interest Rate: 4.5 Percent Loan Term: 30 Years Prepaid Mortgage Insurance: 1.75 Percent of Loan Amount Annual Mortgage Insurance: 1.35 Percent of Loan Amount Annual Property Tax Rate: 1.25 Percent of Purchase Price Annual Hazard Insurance Rate: 0.40 Percent of Home Value

In the case of a typical three-person household, the sales price for a single-family residential unit that could be considered affordable ranges from only $65,300 for extremely low-income households, to $108,800 for very low-income households, $173,900 for low-income households, and $260,600 for moderate income households. Note that the income limits increase with family size. For example, a unit deemed affordable to a four-person household would range from only $72,400 for an extremely low-income household, to $120,700 for a very low-income household, $193,000 for a low-income household, and $298,600 for a moderate income household. The sales price for a unit deemed affordable to a five-person household ranges from $78,200 for an extremely low-income household, to $130,400 for a very low-income household, $208,500 for a low-income household, and $312,800 for a moderate-income household. Based on a comparison with the median sales prices reported in Table 21, it is clear that only moderate- and above moderate-income households could afford a median priced home in most Tahoe area communities, without exceeding the 30 percent cost burden. For example, a five-person household of moderate-income could reasonably

49

afford to pay up to $312,800 to purchase a home. Yet this value is only slightly higher than the median sales price for single-family homes sold on the California side. This amount is also well below the median sales prices in other areas, such as on the Nevada side, where the median sales price was $530,000. Table 23: Affordable For-Sale Housing Prices, Tahoe Region, 2013 2013 Incom e Lim its (a) Extremely Low Very Low Income Low Income Moderate Income

3-Persons $18,900 $31,500 $50,350 $75,480

Household Size 5-Persons 4-Persons $22,650 $20,950 $37,750 $34,950 $60,400 $55,900 $83,880 $90,600

3-Person Household Extremely Low Very Low Income Low Income Moderate Income

Am ount Avail. Principal & for Housing Interest $314 $473 $788 $522 $835 $1,259 $1,887 $1,251

Property Insurance $22 $36 $58 $87

Property Mortgage Total Monthly Dow nAffordable Insurance Paym ent Paym ent Hom e Price Taxes $65,315 $473 $3,429 $68 $70 $108,813 $5,713 $788 $113 $116 $173,852 $1,259 $9,127 $181 $185 $260,571 $1,887 $13,680 $278 $271

4-Person Household Extremely Low Very Low Income Low Income Moderate Income

Am ount Avail. Principal & for Housing Interest $524 $347 $874 $579 $927 $1,398 $2,097 $1,390

Property Insurance $24 $40 $64 $97

Property Mortgage Total Monthly Dow nAffordable Paym ent Paym ent Hom e Price Insurance Taxes $3,799 $72,358 $524 $75 $77 $6,336 $120,689 $129 $874 $126 $193,046 $10,135 $201 $206 $1,398 $15,202 $289,570 $309 $2,097 $302

5-Person Household Extremely Low Very Low Income Low Income Moderate Income

Am ount Avail. Principal & Interest for Housing $566 $375 $944 $626 $1,001 $1,510 $2,265 $1,502

Property Insurance $26 $43 $70 $104

Property Mortgage Total Monthly Dow nAffordable Taxes Insurance Paym ent Paym ent Hom e Price $78,158 $566 $4,103 $81 $83 $944 $6,844 $130,355 $139 $136 $208,512 $217 $222 $1,510 $10,947 $2,265 $16,420 $312,768 $326 $333

Ow nership Cost Assum ptions % of Income for Housing Costs Dow n payment Annual interest rate Loan term Upfront mortgage insurance Annual mortgage insurance Annual property tax rate Annual hazard insurance (b)

30% 3.5% 4.5% 30 1.75% 1.35% 1.25% 0.40%

of gross annual income of home value fixed years of home value of mortgage of home value of home value

Note: (a) Income limits are based on the 2006-2010 ACS data and a median family income of $69,900 ($2011). (b) Based on an average of quoted insurance premiums from the Homeow ners Premium Survey, published by the California Department of Insurance, for a home valued at $300,000. Sources: HUD, 2013; California Department of Insurance, Homeow ners Premium Survey, 2013; BAE, 2013.

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Rental Housing The rental housing market in the Tahoe Region is comprised of a number of multifamily housing complexes, mostly concentrated on the south shore, and single-family homes that are independently owned, and rented out by local property management companies. Table 24 provides information for an assortment of multifamily apartment complexes throughout the Tahoe Region which recently had apartment units available for rent. Research suggests that most of the multifamily housing units in the Region are concentrated in the vicinity of South Lake Tahoe and Stateline. BAE collected detailed information Sierra Pines Motel and Apartments, South Lake Tahoe, on unit characteristics for three apartment complexes in South Lake Tahoe, with a total of 133 units. These units ranged in size from studios to two-bedroom apartments. Studios ranged in size from 320 to 600 square feet, priced between $500 and $750 per month. One-bedroom units ranged in size from 625 to 1,000 square feet, priced between $750 and $1,100 per month. Two bedroom units ranged in size from 800 to 1,250 square feet, priced between $850 and $1,350. On a rent per square foot basis, units in the South Lake Tahoe and Stateline areas were asking between $0.81 and $1.56. BAE was able to collect detailed unit characteristics for only one apartment complex on the north shore. This reflects the small supply of multifamily housing units in that area. The Tahoe Incline Apartments complex is located in Incline Village, on the Nevada side. It offers both two and three bedroom units, ranging in size from 780 square feet to 1,500 square feet. Monthly rental information was unavailable for the three bedroom units, but the two bedroom units rent for $975 per month. This equals an average rent per square foot figure of $1.25. Table 25 reports detailed unit characteristics collected on 69 independently owned single-family housing units that listed for-rent in the Tahoe Region in June 2013. Of these, 31 were located on the north shore, while 38 were located on the south shore. Of these units, 48 were located on the California side, while 21 were on the Nevada side. A total of 14 units were small studios, averaging around 300 square feet, with a median rental rate of $525 per month. Another 10 units were listed as one-bedrooms, averaging 650 square feet, renting for a median of $675 per month. Twobedroom units rented for $1,100 per month, with a total of 17 units currently available at an average of 1,120 square feet. The seven largest units were four-bedrooms, averaging 1,900 square feet, and renting for $1,850 per month. Most of the areas surveyed had an assortment of unit sizes, ranging from studios to three bedrooms, with four bedroom units being rented sporadically throughout the Region.

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Table 24: Selected Apartment Rental Rates, Tahoe Region, 2013 Com plex Nam e South Lake Tahoe Area

Address

City/State

State

Num ber of Units

Beds

Baths

Sq. Ft

Rent/ Month

Rent/ Sq. Ft

California Side Sierra Vista Apartments

1821 Lake Tahoe Blvd.

S. Lake Tahoe

CA

94

1 2

1 1

625 800

$750-$855 $850-$955

$1.3 $1.1

The Ski Haus

977 Park Ave.

S. Lake Tahoe

CA

17

0 1 2

1 1 2

400-600 700-1000 1,250

$500-$700 $850-$1100 $1250-$1350

$1.20 $1.15 $1.04

Tahoe Village Apartments

399 Cedar Ave.

S. Lake Tahoe

CA

11 11

0 1

1 1

500 700

$775 $895

$1.55 $1.28

Nevada Side Aspen Grove Apartments

172 Michelle Dr.

Stateline

NV

n.a. n.a. n.a.

0 2 2

1 1 1

800 900 1,100

$750 $850 $895

$0.94 $0.94 $0.81

Nevada Royale Apartments

149 Kahle Dr.

Stateline

NV

2 21 15

0 1 2

1 1 1

320 640 840-900

$500 $600 $800

$1.56 (a) $0.94 $0.92

786 Southw ood Blvd.

Incline Village

NV

n.a.

2 3

1 2

780 1,500

$975 n.a.

$1.25 n.a.

North Lake Tahoe Area Nevada Side Tahoe Incline Apartments

Note: (a) Utilities included in rent. Sources: Property ow ners and managers, 2013; Online apartment listings, 2013; BAE, 2013.

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Table 25: Selected Private Rental Rates, Tahoe Region, 2013 (Page 1 of 2)(a) Address

City/State

State

Beds

Baths

Sq. Ft.

Rent/ Month

Rent/ Sq. Ft.

Unit Type

North Lake Tahoe Area California Side Unknow n 2225 West Lake #5 235 Alpine Meadow s 2815 Lake Forest Rd #4 7020 8th Avenue 7219 4th Avenue 990 Snow Show Drive 3101 Lake Forest Rd. 3115 North Lake Boulevard #3 3890 Summit Road 655 Raw hide Drive 414 Deer Avenue 1335 North Lake Boulevard 3115 North Lake Boulevard #42 3115 North Lake Boulevard 7041 Placer Unknow n 415 Nightingale 7278 Timber Wolf Drive 1310 Common Wealth Drive 492 Club Drive

Homew ood Tahoe City Tahoe City Tahoe City Tahoma Tahoma Tahoe City Tahoe City Tahoe City Carnelian Bay Tahoe City Tahoma Tahoe City Tahoe City Tahoe City Tahoma Agate Bay Carnelian Bay Tahoma Kings Beach Tahoe City

CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA

0 0 0 0 0 0 2 2 2 3 3 3 3 3 3 3 4 4 4 4 4

1 1 1 1 1 2 1 1.5 2.5 2 2 2 2.5 2.5 3 3 2 2 2 2.5 3

n.a. n.a. 370 250 n.a. 400 n.a. n.a. 1,144 1,552 1,100 1,300 n.a. 1,440 n.a. n.a. 1,300 1,556 n.a. n.a. 2,000

$950 $750 $650 $475 $900 $990 $1,250 $1,600 $1,500 $1,695 $1,800 $1,500 $1,900 $1,500 $1,650 $2,000 $1,600 $1,850 $1,800 $2,400 $2,400

n.a. n.a. $1.76 $1.90 n.a. $2.48 n.a. n.a. $1.31 $1.09 $1.64 $1.15 n.a. $1.04 n.a. n.a. $1.23 $1.19 n.a. n.a. $1.20

Studio/Apartment Studio/Apartment Studio/Apartment Studio/Cabin Studio/Cabin Studio/ Furnished Apartment n.a. Condominium n.a. Single-Family Single-Family Single-Family Condominium Condominium n.a. Single-Family Single-Family Single-Family Single-Family Single-Family

Nevada Side 889 Tahoe Boulevard 989 Tahoe Boulevard #91 801 Northw ood Boulevard 811 Tahoe Boulevard 870 Southw ood Blvd Oriole at Tanager 120 Country Club Drive Titlist at Golfers Pass Lynda Court at Winding Way 321 Ski Way

Incline Village Incline Village Incline Village Incline Village Incline Village Incline Village Incline Village Incline Village Incline Village Incline Village

NV NV NV NV NV NV NV NV CA NV

0 1 2 2 2 2 2 2 3 3

1 1 1.5 1.5 1.5 1.5 2 2.5 1 2.5

n.a. n.a. 1,050 n.a. n.a. 1,000 1,575 n.a. n.a. n.a.

$700 $800 $1,050 $1,200 $1,095 $1,100 $1,275 $1,200 $1,600 $1,250

n.a. n.a. $1.00 n.a. n.a. $1.10 $0.81 n.a. n.a. n.a.

Condominium Condominium Apartment Condominium Condominium Condominium Condominium Fourplex Single-Family Condominium

Tahoe Valley S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe

CA CA CA CA CA CA CA CA

0 0 0 0 0 0 1 1

1 1 1 1 1 1 1 1

200 200 200 300 300 300 500 700

$485 $485 $490 $525 $485 $525 $600 $650

$2.43 $2.43 $2.45 $1.75 $1.62 $1.75 $1.20 $0.93

Studio Studio Studio Studio Studio Studio Condominium Studio

South Lake Tahoe Area California Side 950 Lakeview Dr. 3514 Faw n Way #6 3780 Stew art Way #5 1029 Reno Ave. #5 1029 Reno Ave. #7 1029 Reno Ave. #9 776 Tallac Ave. #1 3780 Stew art Way #1 - Continued Note: (a) Units listed as private rentals are independently ow ned, but most often are leased through a property management company. Sources: Property ow ners and managers, 2013; online apartment listings, 2013; BAE, 2013.

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Table 25: Selected Private Rental Rates, Tahoe Region, 2013 (Page 2 of 2)(a) Address

City/State

State

Beds

Baths

Sq. Ft.

Rent/ Month

Rent/ Sq. Ft.

Unit Type

South Lake Tahoe Area (Cont'd) 1180 Herbert #3 3809 Stew art Way #11 1087 Dedi Ave. 918 Florance Ave. #2 3716 Paradise #1 3748 Ruby Way #1 1238 Lester St. #B 1068 Ski Run Blvd. 1390 Ski Run Blvd. #3 695 Tehama 3717 Alder #2 946 Cave Rock Ave. 764 Sonoma Ave. N. Upper Truckee Rd. 1200 Wildw ood #34 602 Wintoon Dr. 2264 Wagon Train Tr. 635 Lake Tahoe Blvd. 760 Sonoma Ave.

S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe Tahoe Valley S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe Meyers S. Lake Tahoe S. Lake Tahoe S. Lake Tahoe Tahoe Valley S. Lake Tahoe

CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA

1 1 1 1 1 2 2 2 2 2 2 2 2 3 3 3 3 3 4

1 1 1 1 1 1 1 1 2 2 2 2 2.5 2 2 2 2 2 2

600 500 900 n.a. n.a. 900 900 n.a. 1,000 1,400 n.a. n.a. n.a. 1,000 1,200 1,500 1,600 1,700 n.a.

$700 $650 $1,095 $525 $650 $900 $900 $750 $895 $1,450 $1,000 $1,000 $1,400 $1,300 $995 $1,350 $1,595 $1,650 $1,400

$1.17 $1.30 $1.22 n.a. n.a. $1.00 $1.00 n.a. $0.90 $1.04 n.a. n.a. n.a. $1.30 $0.83 $0.90 $1.00 $0.97 n.a.

Condominium Condominium Single-Family Fiveplex Duplex Duplex Duplex Triplex Condominium Single-Family Duplex Single-Family Single-Family Single-Family Condominium Single-Family Single-Family Single-Family Single-Family

Nevada Side 615 Hw y 50 #50 617 Hw y 50 #4 111 Tramw ay 231 South Benjamin 161 Michelle Drive 745 Boulder Ct 711 Kingsbury 127 Tramw ay 131 Cypress Lane 132 Kahle Drive 186 Myron Drive

Zephyr Cove Zephyr Cove Stateline Stateline Stateline Kingsbury Low er Kingsbury Stateline Low er Kingsbury Stateline Zephyr Cove

NV NV NV NV NV NV NV NV NV NV NV

0 1 1 2 2 2 2 2 3 3 4

1 1.5 2 1 1 2 2 2 3 3 3

450 n.a. 695 1,000 n.a. 800 1,080 1,200 2,222 2,000 2,700

$500 $850 $800 $875 $975 $1,150 $945 $900 $1,850 $1,350 $2,600

$1.11 n.a. $1.15 $0.88 n.a. $1.44 $0.88 $0.75 $0.83 $0.68 $0.96

Studio/Apartment Condominium Condominium Condominium Duplex Condominium Duplex Condominium Single-Family Condominium Single-Family

Note: (a) Units listed as private rentals are independently ow ned, but most often are leased through a property management company. Sources: Property ow ners and managers, 2013; online apartment listings, 2013; BAE, 2013.

Affordable Rental Rates Similar to the affordable purchase prices, affordable rental rates are calculated using HUD derived income limits for extremely low-, very low-, low-, and moderate-income households in the Tahoe Region. Table 26 reports these affordable rates by income category, household size, and unit size. The reported affordable rents assume a 30 percent cost burden and account for anticipated utility costs based on the Placer County utility allowance for the Tahoe area. 10 Utilities are assumed to

10

The Placer County utility allowances are based on an altitude of 3,500 or higher and are assumed to be

primarily representative of the south Lake Tahoe area. Because the majority of available rental units are

54

include natural gas for space heating, cooking, and water heating, as well as other electric, such as lighting, refrigeration, and other small appliances. Based on these calculations, rental rates that are affordable to extremely low-income households would range from $332 to $460 per month, depending on household composition and unit size. Rents that would be affordable to very low-income households range between $577 and $838 per month. Rents that would be affordable to low-income households range from $943 to $1,404 per month. Moderate-income households could reasonably afford monthly rents of $1,431 to $2,159. With median rental rates for studio and one-bedroom units in the range of $525 and $675 per month, rental housing is unlikely to be affordable to many extremely low- and very low-income households. The remaining low-, moderate-, and above moderate-income households are most likely able to afford market rate housing, without incurring excessive housing costs.

Inventory of Affordable Rental Units Table 27 provides an inventory of subsidized affordable housing within the Tahoe Region, including information regarding the number of units by size (where available) and subsidy levels. To compile the inventory, BAE contacted various regulatory agencies and property owners/managers for the respective complexes. For a sampling of subsidized properties, BAE conducted brief interviews with the property owners and managers to ascertain occupancy patterns, tenant characteristics, and other factors that help provide a better understanding of how the existing affordable housing supply helps to meet regional housing needs. As of August 2013, there were 13 subsidized affordable rental housing complexes in operation in the Tahoe Region. Nearly all of them were located on the south shore, with only the Kings Beach Housing Now offering subsidized affordable housing units for rent on the north shore. In all, these complexes account for 594 total housing units. This listing excludes two multifamily properties in the Incline area which were subdivided and sold as individual affordable ownership units and the facility at Sierra Nevada College that provides affordable dormitory space for students. The majority of the listed projects offer one- and two-bedroom units, with some three-bedroom and very few fourbedroom units available. All of the listed complexes contacted were constructed utilizing HOME Partnership Program funds and are restricted to low- and very-low income households. Three of the complexes are age-restricted to persons aged 62 and over. These include Kelly Ridge Apartments and Tahoe Senior Plaza project. One complex, Sky Forest Acres, is restricted to individuals with qualifying disabilities. One new project, called The Aspens at South Lake Tahoe will add an additional 56 units, bringing the total number of subsidized units in the City of South Lake Tahoe to more than 300. The new units will be fairly evenly distributed between one-, two, and three-bedroom floor plans. Under the best-case scenario, the developer anticipates completion of the project, and the first lease signings, to occur in late spring 2014.

located in South Lake Tahoe, and because all lake level rental units would be located at an altitude greater than 3,500 feet, BAE assume that the provided utility allowance estimates are generally representative.

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Table 26: Affordable Rents, Tahoe Region, 2013 Year/Incom e Category (a) Median Family Income: $69,900 Extremely Low Income Very Low Income Low Income Moderate Income

Affordable Rents (b) Extrem ely Low Incom e 1-Person 2-Person 3-Person 4-Person 5-Person Very Low Incom e 1-Person 2-Person 3-Person 4-Person 5-Person Low Incom e 1-Person 2-Person 3-Person 4-Person 5-Person Moderate Incom e 1-Person 2-Person 3-Person 4-Person 5-Person Included Utilities (c)

1 Person

2 Person

Incom e Lim its/Household Size 3 Person 4 Person 5 Person 6 Person

7 Person

8 Person

$14,700 $24,500 $39,150 $58,680

$16,800 $28,000 $44,750 $67,080

$18,900 $31,500 $50,350 $75,480

$26,000 $43,350 $69,350 $104,040

$27,700 $46,150 $73,800 $110,760

Studio

$332

$577

$943

$1,431

$105

$20,950 $34,950 $55,900 $83,880

$22,650 $37,750 $60,400 $90,600

$24,350 $40,550 $64,850 $97,320

Unit Size 1-Bedroom 2-Bedroom 3-Bedroom 4-Bedroom 5-Bedroom

$317 $369

$562 $649

$928 $1,068

$1,416 $1,626

$106

$356 $409

$636 $724

$1,055 $1,195

$1,613 $1,823

$108

$395 $446

$710 $796

$1,181 $1,320

$1,809 $2,019

$110

$432 $474

$460

$782 $852

$838

$1,306 $1,418

$1,404

$2,005 $2,173

$2,159

$114

$117

Notes: (a) Income limits are based on the 2013 HUD limits for a median family income of $69,900. (b) Affordable rents equal to 30 percent of gross monthly income, minus a utility allow ance. The utility allow ance is derived based on the 2012 figures published by Placer County for the Tahoe Area. Utility allow ance estimates assume that all heating, cooking, and w ater heating w ould be done using natural gas. Other electricity usage is also included, accounting for lighting, refrigeration, and small appliances. (c) Included utilities represents utility costs normally included in rent, such as w ater, sew er and trash collection. Sources: HUD, 2013; Placer County, 2013; BAE, 2013.

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Many of the subsidized affordable rental complexes contacted for this research identified a lull in the demand for subsidized units in recent years as many lower-income households relocated to areas outside of the Region in order to find better employment and housing opportunities. More recently, the existing vacancies have been absorbed and nearly all of the complexes interviewed have come up to full occupancy. For example, the Tahoe Valley Townhomes experienced a sustained vacancy rate of around three units up until February of 2013, when the last remaining vacant unit was rented to a qualified household. They have since resumed their normal turnover rate of five to seven units per year. This was described as being a little above average for the Region, since this particular complex has a high percentage of The Aspens, South Lake Tahoe, CA seasonal employees. Most complexes carry a waiting list of ten households or less, with the exception of the Kings Beach Housing Now project, which has a waiting list of 150 households. The majority of demand for subsidized affordable housing is reportedly coming from area employees, many of whom are seasonal workers or are employed year-round at one of the casinos. Property managers indicated that market demand for affordable units is deepest for one- and two-bedroom units; however, due to lower numbers, complexes with subsidized three- and four-bedroom units report strong demand, also.

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Table 27: Affordable Rental Complexes, Tahoe Region, 2013 Com plex Nam e South Lake Tahoe Area

Address

City/State

State

Num ber of Units

Beds

Baths

Level of Affordability

California Side Bijou Woods Apartments

3421 Spruce Ave.

S. Lake Tahoe

CA

92

1 2 3 4

1 1 2 2

Low -Income; Very-Low Income

Evergreen Apartments

1342 Melba Dr.

S. Lake Tahoe

CA

25 1

2 3

1 1

Low -Income; Very-Low Income

Kelly Ridge Apartments

1447 Herbert Ave.

S. Lake Tahoe

CA

30 2

1 2

1 1

Very-Low Income; Age 62 and Older

Sierra Garden Apartments

1801 Lake Tahoe Blvd.

S. Lake Tahoe

CA

76

1 2

1 1

Low -Income; Very-Low Income

Sky Forest Acres

750 Emerald Bay Rd.

S. Lake Tahoe

CA

16 1

1 2

1 1

Very-Low Income; Disabilities

Tahoe Pines Apartments

3431 Spruce Ave.

S. Lake Tahoe

CA

23 3

2 3

1 1

Low -Income; Very-Low Income

Tahoe Senior Plaza

1101 3rd St.

S. Lake Tahoe

CA

45

1

1

Very-Low Income; Age 62 and Older

Tahoe Valley Tow nhomes

1055 Tata Ln.

S. Lake Tahoe

CA

12 44 14

1 2 3

1 2 2

Low -Income; Very-Low Income

Nevada Side Lake Vista I

129 Market St.

Kingsbury

NV

12 12

1 2

1 1

Low -Income; Very-Low Income

Lake Vista II

129 Market St.

Kingsbury

NV

8 32

1 2

1 1

Low -Income; Very-Low Income

Meadow brook Apartments

134 Kahle Dr.

Stateline

NV

16 14

2 3

1 2

Low -Income; Very-Low Income

Aspen Grove Apartments

172 Michelle Dr.

Stateline

NV

39

0 2 2

1 1 1

Low -Income; Very-Low Income

204 Chipmunk St.

Kings Beach

CA

North Lake Tahoe Area California Side Kings Beach Housing Now

6

0

1

Low -Income;

34

1

1

Very-Low Income

2

2

1

35

3

1

Sources: Property ow ners and managers, 2013; Online apartment listings, 2013; BAE, 2013.

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LOCAL JURISDICTION HOUSING NEEDS, GOALS & POLICIES Research for this study included a scan of the housing needs assessments goals and policies adopted by local jurisdictions within the Tahoe Region. This information is useful for developing an understanding of regional housing issues, through the lens of individual jurisdictions, which focus on local concerns and identify local priorities. As noted below, some of the resource documents predate data used in the preparation of prior chapters of this report; thus, more recently available data discussed in prior chapters may supersede some of the local jurisdictions’ findings regarding local needs.

Background Following the passage of California Senate Bill 375, counties and cities in California are required to prepare Housing Element updates in staggered eight-year cycles by region, starting in 2013. The new timeframe is intended to match the planning schedule for the Long Range Transportation Plan that is prepared by each Metropolitan Planning Organization (MPO) in California. As of the writing of this report, both El Dorado and Placer Counties had produced Draft Housing Element Updates for the 2013 – 2021 planning period. The City of South Lake Tahoe issued a Draft Housing Element Update in December 2013. In Nevada, counties are required to adopt a Master Plan, and in counties where the population is 100,000 or more, the Master Plan must include a Housing Element. Douglas and Washoe Counties each adopted updated Master Plans in 2012 and 2010, respectively. Even though Douglas County’s population was less than 100,000, the County included a Housing Element in its Master Plan.

Housing Needs Goals and Policies by Jurisdiction El Dorado County, California El Dorado County released the Draft 2013 – 2021 Housing Element of the County General Plan in March 2013. An update of the 2008 – 2013 Housing Element that was adopted in 2009. The Draft Housing Element Update documents the housing needs, conditions, and policies of the County’s unincorporated areas, and includes specific discussion of the Tahoe Region portion of the county, also referred to as the East Slope, to a limited extent. Housing Needs Assessment The county’s Tahoe Region population (including the City of South Lake Tahoe) was approximately 36,072 people in 2010, comprising about 20 percent of the total county population. However, the Draft highlights that the Region’s population fluctuates seasonally due to the high concentration of vacation and second home properties. Though the Draft does not include population projections for the Tahoe Region, it does anticipate an 18 percent increase from 2010 to 2025 for the county as a whole. With a few exceptions, the portion of the Draft dealing with existing housing needs and conditions does not specify data for the Tahoe Region. The Housing Stock section reports 7,777 seasonal,

59

recreational, and occasional use housing units in the unincorporated areas of the county and highlights that such units pose a particular housing challenge to the Tahoe Region, which has the greatest concentration of unavailable units and a relatively high demand for lower cost housing stock. In the unincorporated portion of the county, there were 13 government-assisted properties containing 819 housing units in 2012, and none of these were located in the Tahoe Region. The Draft did not indicate how many of the apartment complexes in the unincorporated County were in the Region. Housing Allocation, Supply, and Constraints The Housing Element reports the County’s allocation for new housing production under the Sacramento Area Council of Government’s (SACOG) Regional Housing Needs Plan adopted for the 2013 – 2021 period, and distinguishes between West Slope and East Slope, or Tahoe Region, allocations. Of the 4,428 allocated to the County’s unincorporated areas, 480 are allocated to Tahoe, comprising 10.8 percent of the total. Of these, nearly half (46.9 percent) are designated for low- and very low-income households. An additional 18.5 percent are allocated to moderate-income households, and 34.6 percent for above moderate-income households. Vacant land available for residential development in the East Slope was estimated to be sufficient to accommodate an estimated 3,724 units, while the number of new units that could be achieved on land that is already entitled for development or is underutilized was not divided into East and West Slope figures. The Draft also estimates that land values range between $75,000 and $1.1 million per acre in the unincorporated County, but up to $1.5 million per acre in the Tahoe Region. As reported in the Draft Housing Element, governmental constraints to development include an annual housing allocation determined by TRPA and provided to jurisdictions located in the Tahoe Region. For 2013, there was a maximum allocation of 130 residential units, including 109 units in parts of the four unincorporated counties and, more specifically, 49 new residential units in El Dorado County. Though TRPA currently allows affordable housing developments to obtain a waiver from the housing allocation requirement, property owners must reapply when seeking to convert the unit to market rate, which discourages developers from taking advantage of this incentive. The Draft cites other TRPA regulations that pose an impediment to development, and particularly to affordable housing. These regulations include standards for density, land coverage, excavation, and scenic impacts, as well as compliance with best management practices (BMPs) all of which increase development costs and may discourage rehabilitation and renovations of existing properties. Housing Goals, Policies, and Programs The Draft spells out a number of specific policies for meeting the identified housing needs in the Tahoe Region, including working with TRPA and the California Department of Housing and Community Development (HCD) to strengthen the existing incentive program for affordable housing production, identify existing unpermitted residential units in the Tahoe Region and developing an amnesty program to legalize such units, and to develop a program to track the approval and status of employee housing.

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Two implementation measures are proposed to advance these policies in the Tahoe Region. First, the County proposes to participate in a working groups with TRPA when the Tahoe Regional Plan and TRPA Code of Ordinances are being updated to encourage efforts that will facilitate construction of affordable and workforce housing in the Tahoe Region. These efforts include: • • • • •

• • •

Relaxing TRPA development codes for affordable housing developments and second residential units; Expanding the exemption for affordable housing developments from the requirement to secure development rights; Providing special incentives to assist in the development of housing for extremely low-income households; Increasing the density bonus for affordable housing developments to make them more financially feasible; Applying flexibility in the October to May building ban to rehabilitation of affordable housing, such as low-income households served in the Community Development Block Grant (CDBG) program; Ensuring long-term affordability covenants for affordable units; Allowing bonus units for affordable housing to be assigned from a basin-wide pool; and Developing an amnesty program for existing unpermitted units that would serve extremely low-, very low- and low-income households.

Second, the County proposes to support a legislative platform to facilitate the development of affordable housing, especially in the Tahoe Region, including the following items: • • •

Revision of federal and state statutes and regulations to allow dormitories to be considered housing for resort workers; Expand the TRPA’s urban limit line where opportunities to provide affordable housing exist, such as surplus school sites; Grant the Tahoe Region entitlement status for CDBG funds.

City of South Lake Tahoe, California In 2011, the City of South Lake Tahoe adopted a 2030 General Plan that included a Housing Element adopted in 2008. The City is currently in the process of updating its housing element for the 2014-2022 time period and highlights of the Draft Housing Element Update, issued in December 2013, are summarized below. Adoption of the Final Housing Element Update by the City of South Lake Tahoe is expected by March 2014. Housing Needs Assessment The Draft Housing Element update indicates that the 2012 population of South Lake Tahoe was 21,460 in 2012, a decline from the 2007 population reported in the City’s prior Housing Element, when the population was estimated at 23,700 people. There were an estimated 8,929 households, down from 9,600 households, even though the number of housing units had increased to 15,105 by 2012, compared to 14,300 housing units in 2007. This suggests a trend of increased usage of

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housing units for purposes other than year round occupancy. The Draft Housing Element found that 54.5 percent of South Lake Tahoe’s housing stock is used for seasonal housing. The Draft Housing Element acknowledged that motel rooms are a source of rental housing for some individuals and families and that while weekly motel rental rates may actually be more expensive than rental costs for apartments or houses in some cases, some residents are forced to choose motels due to a lack of sufficient savings to pay for security deposits or poor credit history, while others may choose motel rooms for lifestyle reasons or due to disabilities. Overcrowding is particularly acute in rental units, where over 14 percent of units were overcrowded, including 5.2 percent that were “extremely” overcrowded, with 1.51 or more persons per habitable room. Nevertheless, this represented a decline from 2000, when over 20 percent of rental units were overcrowded. The Housing Element Update referenced a 2002 survey of housing conditions that identified 771 mobile homes, RVs, travel trailers, and campers located within the City, which found that 44 percent required rehabilitation and 17 percent needed to be demolished or replaced. The Housing Element Update noted that since 2002, three of the City’s mobile home parks have closed and one has redeveloped. The Draft Housing Element Update states that housing rents have increased more quickly than workers’ incomes and very low-income households cannot afford market rate rentals in the City, but that low- and moderate-income households can afford rents. Meanwhile, most homes for sale within the City would only be affordable to households with above-moderate incomes. In addition to workers in the recreation and tourism industries, students represent another group of lower-income residents within the City, due to the presence of Lake Tahoe Community College, which serves 400 full-time and 2,200 part-time students. The Draft Housing Element further identified certain professionals, such as police officers, teachers, firefighters, and nurses, as having difficulty affording appropriating housing in the area. The Draft Housing Element Update indicates that there are six multifamily rental properties in South Lake Tahoe that provide subsidized housing and, of these, there are three projects with 185 units that are at risk of conversion to market rates within the next 10 years. Housing Allocation, Land Supply, and Constraints For the period 2013 to 2021, the SACOG assigned a regional housing need allocation of 336 new homes to South Lake Tahoe, including 27 units for extremely low-income households, 27 for very low-income households, 38 for low-income households, 68 for moderate-income households, and 181 for above moderate-income households. These figures represent the City’s share of projected increases in regional housing needs for the period.

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The City of South Lake Tahoe has a total of 912 undeveloped lots that are eligible for residential development if they obtain residential allocations. Single-family dwellings are allowed on 652 parcels, and multifamily dwellings are allowed on 254 parcels. Only 25 of the vacant lots are larger than one acre in size, meaning that they are eligible for a secondary residential unit. The Housing Element estimates that available residential land has potential for approximately 207 multifamily units, and available commercial land that will also allow residential development cold accommodate an additional 70 multifamily units. While it has a substantial supply of vacant residential land, TRPA’s housing allocation system constraints the City’s ability to produce new housing units. According to the Housing Element Update, the City has an approximately six to eight year waiting list for both single-family and multifamily allocations. The Draft Housing Element Update states that South Lake Tahoe is the only jurisdiction in the Tahoe Region that establishes a “set-aside” exclusively for multifamily units (including condominiums) from the housing unit allocations that TRPA grants the City. This helps to assure that there the City will consistent add to its multifamily housing stock. The Draft Housing Element Update concluded that in addition to TRPA’s permit allocation system, TRPA’s land coverage limitations, water quality requirements, height standards, design standards, fees and mitigation costs, permit processing and procedures, limitations on second units, and limitations on density bonuses for affordable housing, all represent constraints to the development of housing. Motel, Condominium, and Timeshare Conversions The Draft Housing Element noted that motel conversions are an option to assist the City in meeting affordable housing needs, but notes that due to city regulations, about one-third of the City’s motels are ineligible for conversion due to their locations, and noted that motel conversions are difficult, due to TRPA regulations, combined with health and safety standards, which limit the feasibility of many motel conversion projects. The City’s condominium conversion regulations allow “condominiumization” of multifamily properties with 10 or fewer units, but only with a stipulation that a portion of the units are deed restricted for low- and moderate-income households, and the remaining units must be deed-restricted for owneroccupancy at sale prices that do not exceed the maximum allowed under the City’s First-Time Homebuyer Program. The City also prohibits the conversion of existing residential dwellings to timeshares, and the City currently has a moratorium on converting existing visitor lodging uses to timeshares.

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Housing Goals, Policies, and Programs To address the City’s additional housing targets and unique housing challenges, the Draft Housing Element’s policy document establishes eight goals calling for the provision of housing to residents of all income levels and residents with special needs through housing construction, rehabilitation, and conservation. To advance these goals, the Element specifies a number of policies and programs ranging from traditional affordable housing tools, to development linkage fees, to employer-assisted housing for seasonal workers and student housing to be provided by Lake Tahoe Community College. A number of these policies and programs specifically address the role of TRPA regulation in housing development including efforts to work with TRPA to modify TRPA regulations to remove barriers and facilitate mixed-use development, affordable housing development, workforce housing development, second units, transitional and supportive housing, and emergency shelters. The City also seeks to work with TRPA to create a simple process for conversion of TAUs to Residential Units of Use, and for conversion of motels to single-room occupancy properties offering long-term rentals.

Placer County, California Placer County published a Draft Housing Element update in January 2013, covering the 2013 – 2021 planning period. The Housing Element is composed of a Background Report documenting existing housing needs and conditions and a Policy Document establishing housing goals, policies, and programs. As of this writing, HCD had found the Final Housing Element in substantial compliance with California housing law, and it was adopted October 8, 2013. Housing Needs Assessment According to the Background Report, in 2010, there were 108,100 people in unincorporated Placer County, comprised of 41,300 households living in 55,900 housing units. Of these, only five percent were in buildings with five or more units and 16 percent of households lived in rental housing. The growth rate in the County has been slowing each year since 2000, and was slower in the unincorporated portions of the County than in the incorporated cities. Population projections for the unincorporated County anticipated a 1.33 percent annual average rate of growth, reaching 36,900 people in 2020 and 49,500 residents in 2035. Population data contained in the Background Report for the unincorporated portions of the County in the Tahoe Region were incomplete. The total 2010 population for six Tahoe Region communities listed was 12,400 people, though this tally did not include Tahoe City and other Tahoe communities. Remaining demographic data did not identify data for the Tahoe Region portions of the County. The last Housing Conditions Survey conducted in Placer County was in 1995. This survey concluded that in the Tahoe Region the housing stock in Kings Beach was in the greatest need of special attention and rehabilitation. Other housing conditions data were current as of 2010, but mostly did not specify data for the Tahoe Region. Median home sales prices in 2012 for six Tahoe communities were listed, ranging from $275,000 in Kings Beach to $581,000 in Tahoe City. A total of 278 unsheltered homeless residents were identified in the Tahoe in a 2004 survey and a number of homeless shelter facilities in the County were listed, though none appeared to be in the Tahoe

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Region. Among all unincorporated County households, nearly 40 percent were paying more than 30 percent of their monthly income for housing costs in 2010. Two-thirds of households whose incomes were less than 80 percent of MFI had excessive housing cost burdens, accounting for roughly onethird of all unincorporated County households. Housing Allocation, Supply, and Constraints The SACOG 2013 – 2021 Regional Housing Needs Allocation for the Tahoe Region portion of Placer County is 328 new units, making up six percent of the total 5,031 new units allocated to the unincorporated County overall. Of the unincorporated County total, roughly 46.6 percent of units were designated for very low- and low-income households, and 34.8 percent were designated for above moderate-income households. A breakdown for new Tahoe Region units, by targeted affordability level, is available in the SACOG Regional Housing Needs Plan (RHNP). Of 370 publicly-assisted affordable rental units in the unincorporated County, 77 were located in the Tahoe Region at a single complex in Kings Beach. In addition, as of July 2012, several resorts in and immediately surrounding the Region provided or had approvals to construct employee housing totaling at least 302 units. An inventory of vacant parcels in the Tahoe Region conducted in September 2012 identified a total of 33 acres of vacant and developable land for multifamily housing at 13 sites in the Tahoe City, North Tahoe, and West Shore areas. These parcels could accommodate an estimated 480 affordable units. According to the Background Report, constraints on the development of more affordable housing included land acquisition and construction costs, with the cost of raw land at around $800,000 per acre in the Tahoe Region, Kings Beach Housing Now, Kings Beach, CA compared to $100,000 per acre for ready-to-build lots in other areas of the unincorporated County. Construction costs for residential development in the Region were also higher than the county average of $100 to $135 per square foot, ranging from $125 to $175 per square foot, not including fees and entitlement costs that are also higher in Tahoe. Governmental constraints identified in the Background Report included mitigation fees required by TRPA and Placer County and TRPA restrictions on the construction of second units depending on lot size, and land coverage restrictions for both single-family and multifamily housing development. TRPA density limitations of 15 units per acre for multifamily projects and 18.75 units per acre for affordable multifamily projects impact the financial feasibility of rental housing development. According to the Background Report, the TRPA affordable housing incentives program does assist developers in the production of new affordable rental housing developments, but total density limits

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and the requirement for affordable deed restrictions in perpetuity remain a challenge. The Report concluded that zoning classifications under the Community Plan Areas established in the Tahoe Regional Plan did not act as a significant restriction to the development of adequate new housing. Housing Goals, Policies, and Programs The Placer Housing Element Policy Document specifically addresses housing in the Tahoe Region. Several policies focus on working with TRPA to modify existing TRPA policies and restrictions regarding the affordable housing incentives program and second unit development restrictions. The document also continues the employee housing program, which requires resorts to provide housing equivalent to 50 percent of the increased housing demand generated by their projects through onsite or off-site housing construction, dedication of land, or payment of in-lieu fees. Finally, the document details a legislative platform to facilitate the development of affordable housing in the Tahoe Region, including the following items: • • •

Revision of federal and state statutes and regulations to allow dormitories to be considered housing for resort workers; Expand TRPA’s urban limit line where opportunities to provide affordable housing exist, such as surplus school sites; and Grant the Tahoe Region entitlement status for CDBG funds.

Douglas County, Nevada Douglas County adopted an updated Master Plan, including a Housing Element, in March of 2012. The Plan covers a planning period of 20 years and is divided into two volumes. Volume I includes goals, policies, and actions for each of the Master Plan elements, and Volume II contains technical information on existing conditions. There are three Census Designated Places (CDP) in the Tahoe Region portion of unincorporated Douglas County: Kingsbury, Stateline, and Zephyr Cove/Round Hill. Housing Needs Assessment In 2010, there were roughly 5,200 residents in the Tahoe Region portion of unincorporated Douglas County. This population was concentrated in three unincorporated communities that contained 4,300 residents, a 20 percent decrease from 2000. The Technical Report attributes this decrease in permanent residents to the surge in vacation rentals and second homes in the Region during that time, with nearly 400 active vacation rental permits as of 2012. Population forecasts for the County anticipate an annual growth rate of 1.4 percent. Though no forecast is provided for the Tahoe Region, the Report states that the permanent resident population will be unlikely to grow in the near future without initiatives to increase the supply of affordable housing. Apartment rents in the Tahoe Region ranged from $550 for a one-bedroom to $1,100 for a threebedroom, while rental rates for single-family dwellings ranged from $850 for a one-bedroom to $2,000 for a four-bedroom unit, slightly higher than rental rates in the rest of the County. The median sales price for a single-family home in the Region in 2010 was substantially higher, at $600,000, than the median of $210,000 in other unincorporated communities in the County. Finally, the Report indicated that roughly one-third of households had some form of housing problem,

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defined as substandard amenities, overcrowding, or cost burden. Among renter households, this figure was 40 percent.

Housing Allocation, Supply, and Constraints In the Tahoe Region portion of Douglas County, there were just over 5,600 total housing units, 450 of which were in multifamily buildings. There were 133 affordable housing units in Douglas County’s portion of the Tahoe Region, of 412 total affordable units in the whole County in 2011. The Housing Element notes that there are currently no affordable senior housing facilities and limited access to transitional and supportive housing facilities in Douglas County. As identified by the Housing Element, governmental constraints to increased housing production in the Tahoe Region include TRPA residential allocation maximums and TRPA regulations that only allow developments with 100 percent of units affordable to households at below 80 percent of median family income (MFI) to qualify for exemptions from the allocation requirements or earn the affordable housing density bonus. Housing Goals, Policies, and Programs The Housing Element establishes a goal of increasing the availability of affordable housing in the Tahoe Region, specifically. This goal is supported by policies focused on changing the TRPA Code of Ordinances to allow all mixed-income affordable housing developments and units for moderateincome households making up to 120 percent MFI to qualify for existing TRPA affordable housing incentives. The Element also calls for greater coordination with Tahoe employers to accommodate workforce housing needs in the Region.

Washoe County, Nevada In 2010, Washoe County adopted an updated Master Plan, including a Housing Element and a Tahoe Area Plan (this is not an Area Plan developed pursuant to Chapter 13: Area Plans in the TRPA Code of Ordinances). Housing Needs Assessment The Tahoe Region portion of the County had a year 2000 population of just under 10,000 residents and is expected to reach approximately 11,300 residents by 2020. The bulk of the demographic and housing conditions information in the Housing Needs Assessment appendix of the Housing Element does not specify information for the Tahoe. As of 2010, there were no assisted rental housing units in the Tahoe portion of the County and 35 percent of renter households in the unincorporated County were paying more than 30 percent of monthly income on housing costs. Average rents in the Incline Village and Crystal Bay communities were between 20 and 50 percent higher than in other unincorporated areas, across all unit types. An estimated 7,000 Washoe County residents had either experienced or were at risk of homelessness in 2010 and there were a total of 1,025 emergency, transitional, and permanent supportive housing beds available in the County, with none located in Tahoe.

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Housing Allocation, Supply, and Constraints According to the Housing Element, land costs in the Tahoe portions of the County can be dramatically higher than in the rest of the County, according to a small selection of vacant land developable for single-family use as of 2007. One 0.4 acre property in Incline Village was selling for a per acre price of over $2 million, while a 0.2 acre parcel in Crystal Bay was on the market for nearly $4 million per acre, as compared to a range in the rest of the County from $1,000 to $360,000 per acre. The land costs, coupled with a low amount of available land in Tahoe present an impediment to multifamily and affordable housing development. Other non-governmental constraints in Tahoe include steep slopes, wetlands, and flooding hazards. The Plan states that there were only 300 buildable lots as of 1999 in the Incline Village and Crystal Bay communities. The governmental constraints section in the Housing Element did not address any TRPA regulations or land use controls specific to Tahoe. The Plan does mention TRPA land capability designations and development restrictions in SEZs as governmental constraints on housing development, but states that the limiting factor in Incline Village and Crystal Bay is the small amount of remaining buildable lots. Housing Goals, Policies, and Programs The Housing Element does establish a number polices to promote greater production of new multifamily and affordable housing, and rehabilitation of existing affordable housing, but does not specify any goals or policies for Tahoe. The Plan does establish a policy of altering the zoning code to allow time-sharing only in tourist commercial designated areas.

Workforce Housing Needs Assessment of Incline Village and Crystal Bay The Washoe County Department of Community Development received a report assessing workforce housing needs in the Incline Village and Crystal Bay communities in December 2009. The report provides a series of demographic, employment, and housing data for the Tahoe communities, highlighting that the population experiences a seasonal fluctuation of roughly 50 percent, with a peak summer population projection of 16,086 people in 2010. The report also notes the widening gap between the area MFI and average wages for typical jobs in the area. While MFI increased by 70 percent from 1990 to 2000, and was $70,400 in 2009, due to the in-migration of wealthy retirees and second home owners, the average hourly wage in the entertainment, accommodation, and food service industry was $14.61 per hour. This wage was the lowest of any industry in the area, though the industry accounts for over 40 percent of all employment in Incline Village and Crystal Bay. The report estimated that between 30 and 60 percent of employees commute from outside the area, depending on the season and that only 32 percent of rental housing was serving year-round residents. Affordable housing projects identified in the area included former rental housing projects that were converted and sold as individual affordable units, plus a dormitory facility that provides housing for students of Sierra Nevada College. Production of new housing units has slowed in recent years, as well. From 1990 to 2000, there was a net increase of over 20 percent, compared to a 4 percent increase from 2000 to 2008. At the same time, rents increased substantially, with roughly 40 percent of both owner and renter

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households paying more than 30 percent of monthly income on housing costs in 2000. Based on these and other demographic data, the report made the following key findings: • • • • •

Housing is out of reach for most of the Incline Village/Crystal Bay workforce Housing production has not kept pace with demand Year-round rental housing has been lost or converted Few rent-restricted housing units are available in the area About half the local workforce, on average, commutes from outside of the Basin

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CONSTRAINTS TO AFFORDABLE HOUSING DEVELOPMENT This section presents a summary of existing and potential barriers to the production and preservation of affordable housing in the Tahoe Region. These barriers, constraints, and disincentives were identified through telephone interviews conducted in 2013 with regional housing stakeholders, including TRPA staff, local government representatives, affordable housing developers, professional associations, and non-profit housing advocates. The interviews were structured around basic questions about barriers and constraints to affordable housing, but allowed for interviewees to share their thoughts on related topics. For a complete list of interview participants, please refer to Appendix C. Because other portions of this analysis specifically address TRPA policies and programs as potential constraints, these discussions focused primarily on other factors that inhibit the potential for development and preservation of affordable housing units. Despite this focus, some policies associated with TRPA, and other agencies that provide discretionary approvals, were highlighted during the discussions and are summarized below.

Costs for Land and Marketable Development Rights The majority of individuals interviewed, both private and public sector, identified the relative scarcity and high cost of land as the primary barrier to affordable housing development in the Tahoe Region. Meea Kang, President and co-founder of Domus Development, indicated that there were six different attempts to construct affordable housing in the Kings Beach area, prior to initiation of the Kings Beach Housing Now project. Due to an apparent lack of available redevelopment opportunities, those prior efforts involved previously undeveloped land, which was not reportedly zoned for residential use. One of the reasons cited for the success of the Domus effort, was that it took a different approach to site selection, identifying five non-contiguous redevelopment sites, previously developed with residential and tourist accommodation units. Shallen Rodriguez, Project Manager with Pacific West Communities, also cited land costs and land availability as primary barriers to successful development of an affordable housing project in South Lake Tahoe. A major challenge in that case was the need to purchase sufficient coverage, although the site already possessed the development rights and zoning necessary to accommodate the units. While the developer considered purchasing coverage from multiple sources, the potential complexity and cost associated with the transaction proved prohibitive. While the project utilized some coverage purchased from the California Tahoe Conservancy, the amount was significantly less than was needed. The remainder was secured through an option on coverage controlled by a single private party, which added additional cost and uncertainty to the process. With strict limitations on sales prices and rental rates, subsidized low-income housing projects, such as these, have a limited capacity to absorb such costs. Both of the development projects described above were reportedly made possible due to the political support and financial contributions of local government agencies, such as the City of South Lake Tahoe.

Uncertainty and Risk Associated with Discretionary Approvals Process Another barrier identified by stakeholders is the complexity of the regional discretionary approvals process, which often functions as a disincentive toward affordable housing development in the

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Region. It was commonly indicated that most developers need to hire local planning consultants and civil engineers who have tacit knowledge of the regional policy framework (e.g. coverage requirements, residential allocations, BMPs, etc.). While the direct costs may be similar to those normally paid for comparable services, working with firms with whom a developer has limited or no prior experience adds to the complexity, uncertainty and stress associated with a proposed project. Stakeholders also described the discretionary approvals process as a “pay-to-play” experience, through which each agency has an opportunity to require mitigations and place conditions on approval. Negotiations occur directly between the developer and each participating agency, with little oversight or perceived understanding of the cumulative cost. The time necessary to complete the approvals process in Tahoe was described as comparable to most urbanized areas, but significantly longer than what is otherwise required in most rural communities. There is an overall sense that the evaluation process is not sufficiently standardized, and that the process changes depending on which planners are assigned (both for TRPA and other local agencies). While some portions of the review process are fairly well defined, such as the viewshed analysis, the process has a tendency to break down on other issues. For example, one project required an assessment of coverage on a neighboring parcel. The developer reportedly offered to hire an independent surveyor to assess the covered area, but the permitting agency preferred to dispatch planning staff to measure the site. The perception is that this approach was likely less precise. There is also a perception that this approach was not sufficiently sensitive to the developer’s time constraints, as it took significantly longer to schedule and complete the assessment, therefore delaying receipt of necessary approvals. Interview participants provided suggestions for ways that TRPA and other participating agencies could improve the process and reduce uncertainty. These focused on ways to streamline the process, but also included options for building in additional flexibility. For example, both private and public sector participants suggested developing prototype project specifications, design templates, or process guides, for both single-family and multifamily housing, that represent best-practices and the preferred form of development. The logic is that projects adhering to these pre-approved project templates could receive expedited review, as well as a fee waiver or reduction. These preapproved project prototypes, or templates, could be limited to specific criteria and presented as a menu of preferred design/project components. As Theresa May Duggan of the Tahoe-Truckee Community Foundation put it, “don’t tell me how I can’t do it, tell me how I can.” Another option would be to rely more heavily on other participating agencies, providing clear guidance on how to meet TRPA requirements, but allowing local governments to play a more prominent role in the approvals process. Multiple stakeholders also indicated that developing a more systematic process would be helpful, including tools like a timeline that establishes strict deadlines for review completion. Private sector representatives suggested that better synchronization between agencies regarding conditions of approval could help ease some of the burden on applicants. For example, standardization of affordable housing deed restriction requirements with those of major funding institutions could help to alleviate some of the administrative costs associated with project compliance. One option would be to institute a 55-year deed restriction requirement, which would match the term currently required by the California Department of Housing and Urban Development, under the HRP Program. By

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adjusting TRPA requirements to match industry standards, the builder could provide TRPA with a copy of the compliance documents already required under other state and federal funding programs. Another approach to address the cumbersome discretionary approvals process is to build in greater flexibility that can allow developers to address issues as they arise. For example, one of the more streamlined aspects of the review process is the parking analysis, except that during the review of development applications for the Chipmunk site of the Kings Beach Housing Now project, the analysis relied on industry standard assumptions about trip generation and parking demand. The developer argues that they could have significantly reduced the total coverage required for the project if given the opportunity to assess parking demand based on the site’s density, location, and proximity to transit.

Need for More Nuanced or Flexible Mitigation Policies A frequently cited barrier is the assessment of impact and services fees based on a flat rate per parcel or unit, rather than on a per building square foot basis. The perception is that a flat fee provides a disincentive to construct or rehabilitate smaller housing units, such as those that would be affordable to local wage earners. In order to ensure an acceptable return on investment, developers are more inclined to build larger, higher priced units that can better offset costs. By providing an option to pay on a per-square foot basis, developers could choose the unit size that best balances unit amenities, marketability, and service costs. Another main impediment is the perception that many required infrastructure upgrades benefit the broader community and are not commensurate with anticipated project impacts. The most frequently cited examples involve the installation of BMPs intended to better manage runoff and water quality. For two of the more recent projects, BMPs were required that provided excess capacity necessary to accommodate additional runoff from neighboring parcels. While neighborhood-wide BMPs may be an efficient and necessary way to manage water quality basinwide, the perception is that this can place undue burden on the owner of an individual site, if only new developments are required to contribute toward funding of the improvements. One suggested solution would be to continue the transition toward outcomes based water quality management and to require a broader neighborhood wide assessment. Even for smaller projects that are required to construct site specific BMPs, actions taken on neighboring parcels can heavily influence the reliability and function of water quality improvements. Therefore, a community wide, communityfunded approach may be desirable to some property owners and prospective developers. Such a policy, on the other hand, would be of less benefit to long-time property owners, many of whom would prefer not to be subject to additional assessments.

Workforce Housing and the Residential Allocation System One of the more frequently cited governmental constraints to housing development was that individuals interested in building a home that would be affordable to moderate-income households must go through the same process to obtain residential permit allocations as do developers of other market rate units. Both Brandy McMahon, Senior Planner with Douglas County, and Lyn Barnett of

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the St. Joseph Community Land Trust, indicated that moderate-income households act as the Region’s primary resident workforce, many of whom are relocating outside the Region due to the high cost of housing. To help address this issue, interview participants recommended the waiver of allocation requirements for housing units sold or rented to households with verified incomes greater than 80 percent, but less than 120 percent of the area median income (i.e. moderate-income category). Under such a program, receipt of an allocation waiver could be contingent upon establishment of an affirmative use covenant that ensures that each unit is occupied by an owneroccupant, rather than used as income-property. Long-term deed restrictions to limit resale prices so that they are affordable to moderate-income households may be more controversial. As described by Pat Davison of the Contractors Association of Truckee-Tahoe, deed restrictions may limit the marketability of some units, since the restrictions limit the ability of property owners to realize the full value of their property upon resale. While located outside of the Lake Tahoe Region, the Spring Creek subdivision in the Town of Truckee provides a fairly recent example. The project proposed to construct 66 housing units, 30 of which were to be deed restricted for occupancy by moderateincome households. As of 2012, 14 of the deed restricted affordable units were constructed, but only three had been sold at below market rates. The remaining 11 units were either sold at market rates or converted to rental housing. 11 Lessons learned from this and other below market rate housing programs include the need for qualifying income ranges that are broad enough to ensure a sufficiently number of potential buyers; and below market sale prices that are low enough to offset restrictions on the equity that buyers can retain upon resale.

Determining TRPA’s Appropriate Role in Housing Matters While most interview participants identified possible programs and code changes that would increase TRPA’s role in regional housing policy, both government representatives and private individuals have questioned the broader need for intervention by TRPA in the regional housing market. For example, at the February 2013 meeting of the TRPA Governing Board, Marsha Berkbigler, Washoe County Commissioner and Governing Board member, commented that “affordable housing should be the responsibility of local and state governments, not of an agency whose sole purpose, initially, was the clarity of the lake.” 12 Despite these objections, TRPA staff and others often cited the interrelationship between housing cost/availability and vehicle miles travelled, referring to workers who are employed in the region, but who commute from the Carson Valley, Reno, or Truckee, due to the availability of lower cost housing outside of the Lake Tahoe Region. An additional rationale for the involvement of TRPA in housing issues is the perceived impact of TRPA regulations on the ability of property owners and local governments to provide a variety of affordable housing choices. As a result, Tim Carlson, Presidential Appointee to the Governing Board, and others expressed a perceived obligation on TRPA’s part to work with state and local governments to address

11

Town of Truckee. (2012). Community Development Annual Report. Available at:

http://laserfiche.townoftruckee.com/weblink/0/doc/59041340/Page1.aspx. 12

TRPA. March 27, 2013. Governing Board Packet. Available at: http://www.trpa.org/wp-

content/uploads/March_gb_2013_packet1.pdf.

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affordable housing issues. 13 Nevertheless, Lyn Barnett of the Saint Joseph Community Land Trust acknowledged in an interview with BAE staff that a lack of enforcement of existing affordable housing policies by TRPA is one rationale for limiting TRPA’s intervention in the housing market. Mr. Barnett indicated that, from his understanding, the lack of enforcement arises from the inadequacy of the penalties, compared to the financial benefit associated with violating the established policies. During a stakeholder meeting with local government officials, one participant suggested that TRPA could take on the role of providing affordable housing target numbers for local jurisdictions. While the California jurisdictions do receive targets for affordable housing production through their statemandated periodic Housing Element Update process, Nevada jurisdictions to not have similar targets. TRPA could incorporate a performance standard regarding production of affordable housing units as a factor in determining whether jurisdictions will receive their maximum potential allocations of housing construction permits; however, TRPA staff has acknowledged a sensitivity to creating additional layers of requirements with which local governments must comply. Others also argued that housing within the Tahoe Region does, in fact, function as a regional market, thus necessitating regional intervention. As Lyn Barnett and Peter Maurer described it, the regional vacation rental and second home market is driving up prices for long-term rental and for-sale housing, breaking the link between housing prices and employee wages. Prices and rental rates are dictated more by the economic vitality of the San Francisco Bay area, than on the spending power of the local workforce. The result, according to Mr. Barnett, is “not a housing shortage, but a housing availability shortage.” The subsequent loss of yearround residents is disrupting neighborhoods and threatening the viability of some residential services, most notably area schools. The profusion of singlefamily rental units has also affected the market for motel and hotel units, suppressing rates and removing the incentive to redevelop or otherwise improve existing properties. Many of the older motel The Aspens, South Lake Tahoe, CA complexes have reverted into de facto single-roomoccupancy facilities, many of which are sub-standard or without complete facilities (e.g. cooking appliances). Some argued in favor of a moratorium on conversion of single-family residential units into vacation rentals. Others simply suggested the

13

Ibid.

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creation of a registry, as is already in place in South Lake Tahoe, which would monitor vacation rentals and ensure the collection of Transient Occupancy Taxes (TOT). Other arguments in favor of TRPA’s continued involvement in housing issues include the need to balance the need for housing with the realization that housing is an environmental issue. Due the lack of housing affordable to workers employed in the Tahoe Region, many commute to Carson City and Reno for housing. These activities have environmental impacts that could be mitigated through the provision of additional workforce housing. Another housing related issue that could be appropriate for TRPA intervention is the method by which the regional median household income is calculated for use in determining eligibility for affordable housing programs. At current, the median household income estimate for the California portion of the Region is calculated as part of the larger Sacramento Metropolitan Statistical Area (MSA). Use of these estimates provides a distorted view of the affordable housing need within the Region, and does not accurately illustrate the high need for subsidized affordable units. This not only has an impact on the analysis of affordable housing need, but also limits the availability of financing for subsidized affordable projects.

PRIORITY POLICY AND PROGRAM EVALUATION On October 23, 2013, the Local Government Committee (LGC) of the Tahoe Regional Planning Agency (TRPA) Governing Board provided comments on a preliminary list of program and policy options designed to address existing housing needs within the Tahoe Region. The LGC meeting was in follow-up to the August 28th meeting of the Governing Board, at which the members provided some discussion, but did not endorse or eliminate any of the presented policy options. At the meeting, the LGC expressed support for further analysis of the five staff recommended policy priorities described below. These include the evaluation of: 1) Policies/a program for removing barriers to the redevelopment/transfer of old tourist accommodation units (TAUs) into low- and moderate-income housing; 2) Policies/a program for removing barriers to the redevelopment/transfer of mobile home parks into low- and moderate-income housing; 3) The effects of allowing second residential units on lots less than one acre in size within 1/4 mile of designated Centers; 4) Expanding the TRPA Code of Ordinances provisions to encourage the construction of low- and moderate-income housing for the Region’s workforce; and 5) The opportunity to remove other barriers and streamline the TRPA permitting process. The remainder of this report describes the outcomes associated with BAE and TRPA’s technical analysis of the recommend policy priorities. BAE and TRPA evaluated each policy, where appropriate, in terms of:

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1) Practicality of implementation; 2) Potential magnitude of low-and moderate-income housing production, if implemented; 3) Economic and/or fiscal feasibility; 4) Geographic applicability and effectiveness within the Tahoe Region; and 5) Effectiveness in addressing the needs of low- and moderate-income households.

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Policy #1: Remove Barriers to TAU Conversion

Motel 6, South Lake Tahoe, CA

Under the 1987 Regional Plan, TRPA created an inventory of land use commodities that regulate growth and development in the Tahoe Region. The commodities define and regulate the nature of the land use in question. For example, each subdivided residentially-zoned lot originally possessed, upon adoption of the 1987 Regional Plan, one development right. A development right and residential allocation are required to construct a residential unit. TRPA also created two types of non-residential land use commodities. These include Commercial Floor Area (CFA) and Tourist Accommodation Units (TAUs). The commodities known as TAUs primarily represent hotel and motel units, but also some condominium units that are professionally managed and function as temporary rental accommodations (i.e., 30 days or less). TAUs are important because TAUs represent a form of temporary housing, which is convertible to other commodities, under the TRPA Code of Ordinances (refer to TRPA Code of Ordinances, Section 50.10: Election of Conversion of Use). There is also an oversupply of poorly maintained and underperforming motel properties primarily concentrated in South Lake Tahoe, some of which are being used for long term housing. If some of those properties were removed and converted to equivalent residential units (ERUs), the resulting land use commodities could be used to support affordable and workforce housing development. TRPA staff identified two ongoing processes, in addition to the TRPA housing program, that will influence the way existing TAU units are converted to alternative uses. Both will aid with implementation of the Regional Plan and Regional Transportation Plan/Sustainable Communities Strategy. These processes include: 1) Development of the Tahoe Region Economic Incentives Strategy (TREIS) by AECOM’s Economics and Planning Group. The TREIS will evaluate the current supply and distribution of lodging throughout the region and address questions of TAU consolidation and transfer

77

within the region. The TREIS will also address the allocation process and procedures for the transfer and conversion of development rights. 2) Establishment of the Tahoe Livable Communities Program (TLCP) by the California Tahoe Conservancy (CTC), which is a proposal to refocus the CTCs land acquisition and marketable rights transfer activities toward acquisition and restoration of developed properties on environmentally sensitive lands utilizing cap-and-trade auction revenue and other public and private sources. The program proposal includes the acquisition of 230 motel/hotel rooms (or TAUs). The TAUs could be retired or converted to another commodity, such as CFA or ERUs, and could then be transferred to Centers to help facilitate redevelopment and the development of multi-family housing. The details of this program are still being developed.

Existing Policy Framework Under the existing TRPA Code of Ordinances, Section 50.10: Election of Conversion of Use, conversion between land use commodities is permissible, but is subject to certain restrictions. The current conversion provisions in Section 50.10: Election of Conversion of Use of the TRPA Code of Ordinances are as follows: 50.10.2. Conversions to Multi-family Units A pilot program is created under this subsection that allows for the conversion of no more than 200 TAUs to ERUs for multi-unit projects, subject to the following conditions: A. Each TAU can be used for a maximum of 1,250 sq. ft. of residential floor area; B. The conversion must happen on the same parcel; and C. TRPA shall monitor the impacts to thresholds of pilot program. This provision was added to TRPA Code of Ordinances as a result of the Regional Plan Update BiState Negotiations. The group supported “the creation of a pilot program allowing the conversion of a limited number of TAUs to ERUs for multi-unit projects. Each TAU can be used for a maximum of 1,250 s. f. of residential floor area on the same parcel.” 14 While this provision provides an opportunity to convert TAUs to multifamily housing (low-, moderate-, above moderate-, or mixedincome), it restricts the conversion to the same parcel from which the units were removed, which may not be a parcel where development is desired. In order to better implement the Regional Plan, this Code provision could be expanded to allow for the conversion to take place on the same parcel, or for the units to be banked and transferred to Centers. 50.10.3. Transfer from Sensitive Lands Conversion of an existing residential or tourist accommodation unit to a residential, tourist, or commercial use may be permitted when a residential or tourist unit is transferred from a parcel classified as land capability districts 1, 2, 3, or 1b (Stream Environment Zone), and the parcel is restored.

14

California-Nevada Consultation Regional Plan Update Recommendations, July 25, 2012.

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This provision was developed to facilitate the removal of older “legacy” development from Stream Environment Zones (SEZ) and transfer development to areas where it would be more appropriate. It also provides an opportunity to convert TAUs to residential units. The TAUs can be converted to ERUs for the purpose of constructing low-, moderate-, above moderate-, or mixed-income housing within Centers or other areas designated as suitable for development within Area Plans. As discussed below, TAUs removed from SEZs can also be transferred to Centers at a ratio of 1:3. Thus, removing older motels/hotels from SEZs and converting the resulting TAUs to ERUs and transferring the commodities to Centers provides an excellent opportunity to meet the Region’s housing needs, while helping with attainment of the Soil and Water Quality Thresholds and implementation of the Goals and Policies of the Regional Plan. The major constraint to developers taking advantage of this provision and constructing housing in Centers is the cost of purchasing older motels/hotels and restoring sites. Therefore, programs funded by public entities, such as the CTC’s proposed Tahoe Livable Communities Program (TLCP), by which older motels/hotels within sensitive lands will be purchased, should be encouraged to convert a portion of the acquired TAUs to ERUs and make them available for no or very little cost to developers willing to build projects resulting in the construction of low-, moderate-, or mixed-income housing within Centers. 50.10.4. Removal of a Nonconforming Use Conversion of an existing residential or tourist accommodation unit to a residential, tourist, or commercial use may be permitted in conjunction with a project approval if the conversion results in the elimination of the unit of nonconforming use. The structures containing the converted use shall meet TRPA standards for new construction. Under this provision, if an older motel/hotel is located in a Plan Area Statement or zoning district established with a Area Plan that prohibits motel/hotel uses, the TAUs could be converted to ERUs and developed on-site, if multifamily residential development is allowed, or transferred to a more suitable location, such as a Center. 50.10.5. Uses Modified to Meet Development Standards for New Projects Conversion of an existing residential unit of use to a tourist or commercial use or an existing tourist accommodation unit of use to a commercial use, or a residential use when it is certified to meet the local jurisdiction health and safety standards for residences, not to include single family residential, may be permitted onsite or for transfer in conjunction with a project approval if all structures and uses within the project area are modified to meet the TRPA standards applicable for a project proposed on an undeveloped project area. This provision allows for the conversion and transfer of TAUs for a multi-residential development proposed as part of a new project on an undeveloped project area.

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50.10.6. Uses Linked to an EIP Project Conversion of residential unit of use to a tourist or commercial use or an existing tourist accommodation unit of use to a commercial use or a residential use when it is certified to meet the local jurisdiction health and safety standards for residences, not to include single family, may be permitted onsite or for transfer if the converted use is included as part of a project that has linked status pursuant to Chapter 15: Environmental Improvement Program. This provision allows for the conversion and transfer of TAUs to multifamily housing if it is part of a project that has linked status pursuant to Chapter 15 of the Code of Ordinances. 50.10.7. Uses to Provide Deed-Restricted Affordable Housing Projects Conversion of existing tourist accommodation units of use to residential may be permitted onsite if the converted units will be used for deed-restricted affordable housing, the converted units are certified by the local jurisdiction that they meet their public health and safety standards for residences, and the project area meets TRPA standards applicable for modifications on a developed project area. This Code provision allows for motels/hotels, some of which are being used as long term housing, to be converted into deed restricted affordable (low-income) housing onsite. The primary issue with this is that the motels/hotels were not originally designed as living units with adequate living space and kitchens, and many lack common open space. Due to the age of many motels/hotels (the majority were built before 1986), they may also have issues such as lead-based paint or mold, which are public health concerns. This code provision also allows for motels/hotels to be torn down and replaced with an affordable housing project onsite, which is much more desirable because the units would be required to be built to current building code energy efficiency standards, reducing greenhouse gas emissions and resulting in energy cost savings for residents; would be required to meet TRPA Scenic Requirements and local jurisdictions development standards and guidelines; and would require the installation of water quality improvements. The one constraint identified with this provision is that the conversion must take place onsite and the site might not be a desirable location for development. In order to better implement the Regional Plan, it should be amended to allow for conversions to take place onsite, or allow the ERUs converted from TAUs to be transferred to Centers for the purpose of developing affordable housing. Consideration should also be given to amending this provision to apply it to moderate-income, as well as low-income, deed restricted multi-family housing. The TRPA Code of Ordinances, Chapter 51: Transfer of Development includes the procedures by which land use commodities can be transferred between parcels and, where permissible, across jurisdictional lines. Pursuant to Section 51.5.3: Transfer of Existing Development to Centers; Bonus Unit Incentive, existing development, including TAUs, can be transferred to Centers based on the land capability district of the sending parcel and the distance of the sending parcel from a Center and from primary transit routes. Transfers are eligible to receive bonus units if the sending parcel is restored. Bonus units received pursuant to this section are not required to obtain a residential allocation to construct a residential unit. As summarized below from Table 51.5.3 -1 of the Code of

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Ordinances, TAUs can be transferred at a ratio of 1:3 if the sending parcel is in an SEZ and 1:2 if the sending parcel is on other sensitive lands. This is one of the primary incentives included in the Code to incentivize the transfer of older “legacy development” in sensitive lands to Centers and promote the environmental redevelopment of Centers. Sending Parcel

Transfer Ratio

SEZ

1:3

Other Sensitive Lands

1:2

Non-Sensitive Lands

1:1

Source: TRPA Code of Ordinances, Table 51.5.3-1: Transfer of Existing Development to Centers

Transfers of existing development can occur only in conjunction with project approval by TRPA and the affected local governments. 15 16 17 TRPA can assign residential bonus units earned pursuant to this section. With the transfer of existing development, structures associated with the sending parcel must be removed and the land restored to a natural state. 18 Bonus units received pursuant to this section are not required to obtain an allocation to construct a residential unit. As provided in Table 50.4.1-1: Allocation and Development Rights Accounting of the TRPA Code of Ordinances, 874 residential bonus units remain from the 1987 Regional Plan and 600 new residential bonus units to be used only in Centers were added with the 2012 Regional Plan Update. Chapter 52: Bonus Unit Incentive Program limits the use of 200 residential bonus units to support the development of moderate-income housing. As with bonus units derived from the transfer of existing development, residential bonus units used for deed-restricted affordable housing do not require allocations for construction. 19 20 However, multifamily residential bonus units used for moderate-income housing do require an allocation. For a project to be eligible for moderate-income bonus units, 21 a local jurisdiction must also have a certified moderate-income housing program.

Location and Performance of Existing TAUs

15

Ibid., Subsection 51.2.

16

Ibid., Subsection 51.5.2.

17

Ibid., Subsection 51.3.5.

18

Ibid., Subsection 51.6.

19

TRPA. (December 12, 2012). Code of Ordinances, Subsection 52.3.2.C. Available at:

http://www.trpa.org/wp-content/uploads/TRPA_Code_of_Ordinances.pdf. 20

Subsection 90.2 of the Code of Ordinances defines “Affordable Housing” to include units reserved for low-

income households, with incomes not in excess of 80 percent of the county median income, and very lowincome households, with incomes not in excess of 50 percent of the respective county’s median income. 21

Subsection 90.2 of the Code of Ordinances defines “Moderate-Income Housing” to include units reserved for

households with incomes above 80 percent, but not more than 120 percent, of the county median income.

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To identify the number of existing TAUs that might be candidates for conversion to low- and moderate-income housing, above-moderate, or mixed-income housing, BAE sought to quantify the existing pool of TAUs and, where possible, evaluate their relative performance as income-generating properties. This assumes that hotel and motel properties with relatively healthy occupancy levels, and revenues, would represent unlikely candidates for conversion. Likewise, many of the properties that are nearing the end of their functional lifespan, with low occupancy rates and slackening revenues, may represent the most likely candidates for conversion. The relative prevalence of underperforming hotel and motel properties may also influence the pricing of marketable TAUs, as would the availability of new TAUs through TRPA. According to the Final Environmental Impact Statement (FEIS) for the Tahoe Regional Plan Update, approximately 12,341 hotel and motel units existed in the Basin prior to adoption of the 1987 Regional Plan. 22 Since then, an additional 58 tourist bonus units were permitted by the TRPA. Around 90 tourist accommodation bonus units are currently reserved or allocated to projects that have entered the permitting process, while another 252 await allocation under varying provisions. 23 No additional TAU commodities were created under the updated Regional Plan. An analysis of Assessor’s parcel data indicates that a greater number of TAUs were removed from use since 1987, than were created through the allocation of new units, decreasing the total number of TAUs in use to 11,974, as of 2012. 24 Table 3-15 of the Final EIS illustrates the number of TAUs by jurisdiction and agency, as well as by land capacity district and land use district. Those data are summarized in Table 28 below, showing that the largest number of TAUs are located in the City of South Lake Tahoe, with other large concentrations of units in Douglas County and Placer County. As of publication of the EIS, the City of South Lake Tahoe was in possession of 18 banked TAUs, as a result of prior redevelopment activities. Of the existing TAUs, there were approximately 1,000 units located on sensitive lands, and 1,530 units located outside of designated community plan areas and Centers. 25 As noted earlier, the transfer of TAUs from sensitive lands, and into Centers, would make the owner of the TAU eligible to receive bonus unit allocations. This could make these units priority candidates for conversion, where appropriate and feasible, given the performance and condition of the properties. To supplement this information, BAE collected data on occupancy and revenue for motel/hotel properties in the region, but found that data was not readily available for the unincorporated part of

22

The Draft Environmental Impact Statement (DEIS) estimated the existing inventory of TAUs at approximately

12,399 units, based on the number of units that existed prior to adoption of the 1987 Regional Plan, plus the 58 tourist accommodation bonus units allocated since 1987. 23

As reported in Table 50.4.1-1 of the TRPA Code of Ordinances, adopted December 12, 2012.

24

Generated using Geographic Information Systems (GIS) analysis of county assessor’s parcel data, as

described in the FEIS, subsection 3.3.1, Master Response 9. Excludes approximately 42 banked TAUs. 25

Note that these numbers are not mutually exclusive. These TAUs could be located on both sensitive lands,

as well as outside the identified plan areas, centers, and districts.

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El Dorado County. The following subsections report the available data for the remaining four Tahoe jurisdictions, which represent approximately 99 percent of the total stock of TAUs in the region. Table 28: Existing and Banked Tourist Accommodation Units, Tahoe Region, 2012 Estim ated Existing TAUs Percent Jurisdiction/ Agency California Side City of South Lake Tahoe El Dorado County Placer County California Tahoe Conservancy Nevada Side Douglas County Washoe County Nevada Division of State Lands Total, All

Existing 8,479 7,026 113 1,340 n.a. 3,468 2,651 817 n.a. 11,947

Banked 48 18 0 6 24 0 0 0 0 48

Total 8,527 7,044 113 1,346 24 3,468 2,651 817 0 11,995

of Total 71% 59% 1% 11% 0% 29% 22% 7% 0% 100%

Notes: (b) Estimated TAUs based on a GIS query of county assessor's data for parcels coded as tourist use. (c) Banked units remaining from the former Redevelopment Agencies of Placer County and the City of South Lake Tahoe. The CTC has 24 banked ERUs that w ere available for use as TAUs, as of publication of the Final EIS. Sources: TRPA, Regional Plan Update Final EIS, 2012; BAE, 2013.

City of South Lake Tahoe, California The majority of the TAU stock is concentrated in the City of South Lake Tahoe. According to transient occupancy tax (TOT) data, there were 5,794 TAUs reported on the city tax rolls between December 2012 and November 2013. 26 This represented roughly 1,230 fewer units than are reported in Table 29, below. The remainder are assumed to be timeshare units that are categorized as TAUs, per TRPA Code, but which are not subject to transit occupancy taxes (TOT) in California. 27 The TAUs reported on the tax rolls were located on 111 different properties. Seven properties report no rented units, no gross receipts, and no taxable rents. This suggests that these properties were not in operation. If so, the 219 TAUs associated with properties that had no record of income could represent opportunities for conversion. Another 15 properties, representing 247 units, reported gross receipts, but no nightly rentals, and no taxable rents. This suggests that the units likely rented for periods greater than 30 days, which would exempt them from TOT collections. Anecdotal evidence indicates that units such as these function as a primary source of affordable housing. As such, these units represent important targets for conversion, which would formalize their use as affordable and moderate-income housing, and better ensure the long-term availability of the units.

26

These figures reflect only those properties with an assigned business identification number that were

reported on the Transient Occupancy Tax rolls between December 2012 and November 2013. 27

California Revenue and Taxation Code, Section7280-7283.51. Available at: http://www.leginfo.ca.gov/cgi-

bin/displaycode?section=rtc&group=07001-08000&file=7280-7283.51

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The remaining 89 properties, representing 5,328 TAUs, were functioning hotel and motel properties that rented units on a nightly basis and reported taxable rents, subject to TOT collections. Average annual occupancy for these properties was 27 percent, which was significantly lower than the average occupancy of other resort-oriented mountain communities, such as Mammoth Lakes, Summit County, Utah, and Summit County, Colorado. 28 The average daily rate (ADR), or nightly rental rate, for the South Lake Tahoe properties was $125 per night. Large hotels with 100 or more rooms commanded the highest ADR, at approximately $127 per night. Properties with fewer than 25 rooms, had the next highest ADR, at $105 per night rented. 29 Hotels and motels in the two middle categories had the lowest ADR. Hotels with 25 to 49 rooms averaged $71 per night rented, while those with 50 to 99 rooms averaged $91 per night rented. BAE evaluated the relative performance of the city’s operating hotel and motel properties based on taxable revenue per available room night, or RevPAR. The average RevPAR value was $34, with a median of $17. 30 This average value represents a decline from the 2011 average of $44, reported in the South Shore Vision Economic Impact Study. Table 29 reports the number of properties, and associated TAUs, by quartile, based on RevPAR performance. According to these estimates, roughly 42 percent of the city’s TAUs were located in the 21 top performing properties, representing the upper 25 percent of RevPAR values. Roughly 58 percent of the city’s TAUs, around 3,105, were located in properties with RevPAR values equal to, or less than, the average (i.e. $34 or less). Around 37 percent of the city’s TAUs were located in the 44 lowest performing properties (i.e. the bottom 50 percent of RevPAR values). These properties underperformed the rest of the market and may represent the most likely candidates for conversion. Table 29: Taxable Revenue Per Available Room Night, December 2012 to November 2013 Category Fourth Quartile (100%) Third Quartile (75%) Second Quartile (50%) First Quartile (25%) Total

Max. RevPAR 123 34 17 7

Average RevPAR 61 24 12 3

Num ber of Properties 21 23 20 24 88

Num ber of Units 2,207 1,162 1,228 715 5,312

Percent of Total Units 42% 22% 23% 13% 100%

Note: (a) Excludes one property w ith an abnormally high average daily rate. Sources: City of South Lake Tahoe, TOT and TID Collected, 2013; BAE, 2013.

28

Strategic Marketing Group. South Shore Vision: Destination Economic Impact Analysis. Available at:

http://tahoesouth.com/ltva/docs/STAR_South_Shore_Vision_4_0.pdf 29

The calculation excludes one outlier, which had an average rental rate of $1,140 per night.

30

These estimates excluded properties assumed to be leased on a long-term basis (e.g. more than 30 days),

as well as those that are assumed to be non-operational.

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Douglas County, Nevada According to the available room tax collections data, there were 2,997 TAUs in operation in the Douglas County portion of the region during the 2012-2013 fiscal year. Roughly 2,414 rooms were located within existing casino developments, representing around 80 percent of the total inventory. The remaining 584 units, around 20 percent of the total, were located in smaller hotel and motel operations. Average occupancy for the casino properties was approximately 61 percent, while occupancy among the non-casino properties was closer to 40 percent. The data suggest that the ADR for casino-based hotel rooms was around $65. The ADR for non-casino hotel and motel rooms was approximately $167. 31 The estimated RevPAR value for the casino properties was around $40, while the non-casino properties achieved an average RevPAR of $66 for the fiscal year. Combined, the Douglas County hotel and motel properties achieved an average occupancy rate of nearly 58 percent, with an ADR of $79, and a RevPAR value of $45. In general, hotel and motel properties located in Douglas County represent unlikely candidates for the conversion, given their relatively strong performance compared to properties in South Lake Tahoe. TAUs associated with existing casino developments also represent unlikely candidates for conversion, since property owners would be more likely to reserve units for future resort development, or sell the associated development rights for conversion to ERUs. Placer County, California There is only limited data available for hotel and motel properties in the Placer County portion of the basin. Information provided by the North Lake Tahoe Resort Association (NLTRA) typically refers to an area ranging from Donner summit, south to Tahoma, and east to the Nevada border. According to one report made available through the NLTRA, there are approximately 2,000 hotel and motel rooms located in this “North Lake Tahoe” area. 32 These units reportedly averaged 60 percent occupancy in 2012. 33 Data for the 2012-2013 fiscal year indicate that the TOT collections for the North Lake Tahoe area totaled approximately $11.3 million. Roughly 30 percent of TOT collections were generated in Squaw Valley, while another 27.2 percent were generated by the resort accommodations at Northstar. Hotel and motel properties in the portion of Placer County located within the Tahoe Region accounted for roughly 46 percent of the total, with revenues of around $4.6 million. Based on a current TOT rate of ten percent in the North Lake Tahoe Transient Occupancy Tax Area, as defined by Placer County, 34 gross receipts in the basin were equal to $46.3 million.

31

ADR estimates are only rough approximations based on the available estimates of net revenues and rooms

sold. 32

Dean Runyan Associates. (2013). The Economic Significance of Travel to the North Lake Tahoe Area: 2003-

2012 Detailed Visitor Impact Estimates. Available at: http://nltra.org/documents/pdfs/FinalReport(2012).pdf 33

Ibid.

34

Placer County. (2013). Uniform Transient Occupancy Tax Ordinance of the County of Placer. Section

4.16.030.B. Available at: http://www.placer.ca.gov/~/media/adm/adm%20%20%20revenue%20 services%20division/documents/TOTBooklet.pdf

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The distribution of TOT revenues within the Placer County portion of the region suggests concentrations of TAUs along the west shore, and in the communities of Carnelian Bay, Tahoe Vista, and Tahoe City. While a complete inventory was unavailable, a partial listing prepared for the Tahoe Basin Community Plan identified 21 establishments, with 735 rooms, in the communities of Kings Beach, Tahoe City, and Tahoe Vista. 35 The greatest number of units were identified in Tahoe City, which showed nine properties offering a total of 289 units. Kings Beach, which generates a much smaller share of the regional TOT revenues, showed five properties offering a total of 231 units. Tahoe Vista had seven properties offering 215 units. Overall, the existing stock of TAUs on the north shore of Lake Tahoe is quite limited. Anecdotal evidence suggests that many of these properties are relatively dated and in need of substantial improvement. Nevertheless, the relative shortage of tourist accommodations in the area makes it unlikely that these units would become available for conversion, but rather would be recycled to accommodate new tourist accommodations. While competition from other nearby communities, such as the Village at Squaw Valley and Northstar at Tahoe, may somewhat moderate future demand for tourist accommodations in the area, proximity to the lake will help to ensure long-term demand for tourist accommodations on the north shore.

35

Economic and Planning Systems, Inc. (2013). Tahoe Basin Community Plan Economic and Market Analysis.

Available at: http://www.placer.ca.gov/~/media/cdr/Planning/CommPlans/TahoeBasinCPUpdate/Appendix-FEconomic-Market-Analysis-Report.pdf

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Washoe County, Nevada According to representatives from the Reno-Sparks Convention and Visitors Authority (RSCVA) there are only six hotel properties, with 781 rooms, located in the Washoe County portion of the Tahoe Region. Two are located in Incline Village, while the remainder are located in Crystal Bay. The largest properties include the Hyatt Regency Lake Tahoe Resort, which offers 422 rooms, the Cal Neva Resort, which offers 199 rooms, and the Tahoe Biltmore Lodge and Casino, which offers 92 rooms. 36 The smaller properties include the Parkside Inn at Incline, with 38 rooms, the Crystal Bay Motel, with 21 rooms, and the Border House at Crystal Bay, with nine rooms. 37 In all of 2012, these properties saw 122,315 occupied room nights, with an average occupancy rate of nearly 47 percent, and an ADR of $179. 38 This ADR value is substantially higher than the countywide average of $76, indicating that properties in north Lake Tahoe perform at a fairly high level. Given the relative scarcity of lodging in the area, these units represent unlikely candidates for conversion.

Pricing and Demand Trends for TAUs The process for purchasing transferable development rights (TDRs) is similar to that used for real property. The availability of commodities for purchase and transfer is sometimes recorded by the Multiple Listing Services (MLS), or in public advertisements in area newspapers. Established networks of brokers work to coordinate private transactions. During the preparation of this report, there was no central clearinghouse for the purchase and sale of commodities. Although TRPA does approve transfers of marketable rights, it does not monitor or track pricing or demand trends. While TRPA staff is working on implementation of a public TDR exchange, the voluntary online platform would function like a voluntary online notice board, similar to Craigslist. Its primary purpose will be only to connect willing buyers and sellers, while providing improved information on ongoing market trends. There are also two TRPA-designated land banks in Tahoe, both of which operate programs focused on the transfer of coverage and marketable development rights from environmentally sensitive lands. These include the land banks managed by the CTC and the Nevada Division of State Lands (NDSL). As noted earlier, the CTC is evaluating a proposed program that would focus on the acquisition of up to 230 TAUs that would be retired or converted and transferred to Centers. As part of that work, CTC staff collected information on recent sales of TAUs, which is summarized below. The Tahoe Resource Team for the NDSL operates a similar land bank. Unfortunately, the NDSL land bank program has never participated in a TDR transaction involving TAUs, and thus could not provide information on pricing or demand for TAUs on the Nevada side of the lake. While TRPA limitations on the transfer of commodities across jurisdictional lines (such as the requirement for approval of affected jurisdictions) may create minor disparities in regional pricing and demand for TAUs, pricing

36

B. Rivers, Reno-Sparks Convention and Visitors Authority, Personal Communication, December 20, 2013.

37

Ibid.

38

Reno-Sparks Convention and Visitors Authority. (2013). Hotel Statistics 2007 through November 2013.

Available at: http://www.visitrenotahoe.com/docs/5a_-_11.13_-_Room_Stats_-_Calendar__Fiscal_with__of _Occupancy_though_November_2013.pdf

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trends on the California side of the lake still provide a reasonable indication of the price that would be required to purchase TAUs throughout the region. Due to the large supply of TAUs in the City of South Lake Tahoe, there is a general expectation that the price and availability of those units would essentially set the market for the region as a whole, at least to the degree that the affected jurisdictions would approve transfers. The CTC currently has 53 banked ERUs that are available for purchase. These are generally the highest priced tradable commodities; therefore, we assume that the highest-priced TAU would not exceed the price of the highest-valued ERU. According to the CTC, there are 21 units available in the City of South Lake Tahoe at a price of $35,000 39, two units available in El Dorado County for $17,000, and 30 units available in Placer County for $17,000. Two recent sales of ERUs in Douglas and Washoe counties indicate current market prices between $38,500 and $50,000. 40 While only limited information exists on historic TAU transactions, data provided by the CTC suggests that the price paid for TAUs during the peak construction boom of the mid-2000’s was on the order of $65,000 per unit. The most recent transaction involving TAUs occurred in 2010, with the purchase of the C&M Lodge at an estimated price of only $16,000 per TAU. 41 While there were six additional purchases involving TAUs since the time of the C&M purchase, all six properties were purchased as operating hotel or motel properties. Based on reported assessor’s parcel values, these properties had per unit values of $6,818 to $18,643. These values likely overstate the value of the TAU rights, since they include bundled assets (e.g. land improvements, development rights, etc.). These prices do not reflect the cost of demolition or restoration of the site, which would be required prior to banking or transfer of the existing development rights. When questioned regarding the estimated market value of TAUs in the current market, three area real estate brokers and appraisers estimated the current value of TAUs between $20,000 and $25,000 per unit.

Summary and Recommendations Overall, the existing conversion and transfer provisions in the TRPA Code of Ordinances provide an opportunity to remove old legacy “motel/hotel development” and construct more low-, moderate-, and mixed-income housing. However, there are some areas of the Code that could be revised to make the process simpler to better facilitate the implementation of the Goals and Policies of the Housing Subelement in the Regional Plan. In addition, when TAUs are acquired using public funds in order to restore sensitive lands, it would be beneficial if at least a portion of the acquired TAUs were

39

In addition to the reported price per ERU, buyers purchasing units located in the City of South Lake Tahoe

are required to pay the TRPA transfer fee ($618), the City transfer fee ($160 per unit), the Conservation transaction fee ($800), and an escrow fee ($200 per unit), increasing the minimum cost by $1,778. 40

Note that the sale that defines the high end of this range was recorded at a time when Placer County had no

more residential allocations to distribute, which was reflected in the high market price for ERUs. 41

This transaction included the transfer of approximately 50 units from the C&M Lodge in South Lake Tahoe to

support the Edgewood project in Douglas County, Nevada. The total price paid was approximately $800,000. Seller paid to demolish existing structures, restore the site, and construct a children’s park and playground.

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converted to ERUs and made available for no or very little cost to developers willing to build projects resulting in the construction of low-, moderate-, or mixed-income housing within Centers. In order to improve the economic feasibility of TAU-to-affordable housing conversion, TRPA should consider revisions to the existing TRPA Code of Ordinances that would facilitate and streamline the TAU conversion process, as discussed above, such as modifying Section 50.10.2 to allow TAUs converted to multifamily housing under the pilot program to be developed on the same site or transferred to a Center. This would not only further implementation of the SCS, but would allow developers to more easily qualify for residential bonus units, which would improve the economic feasibility of proposed projects. TRPA should also consider modifying Section 50.10.7 to allow conversion of TAUs to deed-restricted affordable housing for low- and moderate-income households onsite or to allow the units to be transferred to Centers. An additional barrier that should be considered for removal or modification is the requirement that a developer acquire allocations in order to construct deed restricted multifamily moderate-income housing in Centers. This requirement means that prospective builders must compete with developers of market-rate singlefamily units, who have a greater financial incentive and wherewithal to persevere through the administrative process necessary to obtain an allocation. This makes prospective moderate-income housing developers less likely to pursue a project. Lastly, the allocation of ten or more residential bonus units requires review by the full TRPA Governing Board per Section 2.2.2.B.1. The allocation of between three and nine bonus units only requires review by the Hearings Officer, while the allocation of up to two bonus units can be administratively approved. This stipulation represents a disincentive to pursue larger projects, which may otherwise be more economically viable, since review by the full Governing Board would represent a more lengthy process with a greater degree of uncertainty and risk. Thus, the Code should be modified to allow for a greater number of residential bonus units to be allocated administratively by TRPA staff. These changes, if implemented, would greatly improve the potential effectiveness of TAU conversion in addressing the housing needs of low-and moderate-income households. While the potential magnitude of housing that could be produced through the conversion of existing TAUs is difficult to ascertain, the Regional Plan FEIS identified approximately 1,000 TAUs located on sensitive lands, and 1,530 TAUs located outside of designated Community Plans, Town Centers, the Regional Center, or the High Density Tourist District 42. Under the existing policy framework, TAUs that fall into both categories would theoretically be eligible for the greatest number of bonus units, if transferred from sensitive lands to Centers and used for housing. These properties, therefore, represent the best strategic targets for conversion. However, existing hotel and motel properties would be unlikely to offer TAUs for conversion, if the existing properties are high performing. Therefore, TRPA should work with regional stakeholders, such as the CTC, to identify and encourage acquisition of underperforming properties on sensitive lands that are outside of Centers. Given the large concentration of existing TAUs on the south shore, the policy would be most effective if geographically oriented to target underperforming properties located in the City of South Lake Tahoe.

42

Table 3-15, Lake Tahoe Regional Plan Update Final EIS – Volume 1.

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This might include any of the 44 lowest performing properties, which contain upwards of 1,900 TAUs. That is not to say that such efforts would not be geographically applicable to properties located elsewhere in the region. While the CTC may choose to retire some or all of the acquired TAUs, it would be in the interest of TRPA to partner with the CTC to help make converted TAUs available for higher density, transit-oriented development in Centers, which would help to further implement the Sustainable Communities Strategy (SCS) in the Regional Transportation Plan. If the CTC makes such TAU commodities available for developers to convert into affordable housing at low or no cost, this would represent a useful source of subsidy to help improve feasibility. This discussion has focused on conversion of TAUs to facilitate the construction of more multifamily residential units in Centers to address the housing needs for year round households and the region’s workforce. However, due to the seasonal nature of much of the employment in the Tahoe Region, the creation of non-standard housing types, such as dormitory facilities, cooperative housing facilities, and single-room occupancy (SRO) complexes, targeted to seasonal/temporary employees and students, may be an appropriate use for converted TAUs, particularly since some existing TAU properties may already be used for similar purposes. Thus, the legal establishment of such uses could be used to help formalize the existing land use and ensure that facilities meet a minimum standard of housing quality. In order to accomplish this, TRPA should consider revisions to existing Code provisions to allow the reuse of existing hotel and motel properties with non-standard housing types.

Policy #2: Remove Barriers to Mobile Home Conversion In many communities throughout the nation, manufactured housing and its predecessor, the mobile home, represent one of a limited number of options for affordable home ownership. However, due to the prevailing winter weather conditions, these units are somewhat less suitable for long-term use in the Tahoe Region. Also, data suggest that roughly 56 percent of the regional mobile home stock was manufactured between 1960 and Tahoe Shores Mobile Home Park, Douglas County, NV 1979, with another 33 percent manufactured between 1980 and 43 44 As such, many of existing units are reaching the end of their functional life and are in need 99. of replacement. Therefore, the TRPA Governing Board expressed interest in removing barriers to the

43

U.S. Census Bureau (2013). 2008-2012 American Community Survey, Table B25127. Available at:

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml

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replacement of existing mobile and manufactured home units, not with new manufactured housing, but with conventionally built multifamily housing units, which would provide improved energy efficiency, weather resistance, and a longer functional life. To the degree that existing units are replaced with new construction, the replacement would trigger environmental upgrades, such as the installation of contemporary BMPs, potential coverage reduction, and substantial scenic improvements, and would therefore improve environmental quality. However, recognizing the role of existing mobile and manufactured homes as a critical component of the regional inventory of affordable housing, proposed policy changes should discourage the displacement of existing lowand moderate-income residents, while ensuring that replacement units remain affordable to existing residents and members of the regional workforce.

Existing Policy Framework Under the current TRPA Code of Ordinances, mobile and manufactured home sites are considered residential land use commodities, the establishment of which requires possession of a residential development right and allocation. 45 Once established, the mobile or manufactured housing pad, with associated utilities hookups, becomes an ERU. The term “mobile home” specifically refers to: “A home built entirely in the factory on a non-removable steel chassis that is transported to the building site on its own wheels and was installed prior to June 15, 1976, when the Federal Manufactured Home Construction and Safety Standards (commonly known as the HUD Code) went into effect.” 46 The modern equivalent is a manufactured home, which is defined as: “A home built entirely in the factory on a non-removable steel chassis that is transported to the building site on its own wheels and installed under a federal building code administered by the U.S. Department of Housing and Urban Development, according to the Federal Manufactured Home Construction and Safety Standards (commonly known as the HUD Code) that went into effect June 15, 1976.” 47 According to TRPA staff, the mobile and manufactured housing units themselves do not constitute valid land use commodities, under the TRPA Code of Ordinances. 48 Rather, the associated land use

44

Note that the reported Census estimates include mobile and manufactured housing units, as well as boats,

RVs, vans, and other miscellaneous housing types. 45

TRPA. (December 12, 2012). Code of Ordinances, Subsection 50.5.1.A. Available at:

http://www.trpa.org/wp-content/uploads/TRPA_Code_of_Ordinances.pdf. 46

Ibid., Subsection 21.4.

47

Ibid.

48

T. Avance, Tahoe Regional Planning Agency, Personal Communication, January 17, 2014.

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commodities rest with the legally established mobile home pads, upon which the units sit. 49 Under subsection 2.3.7.A.4., the replacement of existing mobile home units, that are located on legally established pads, does not constitute a change in use, or a change in land coverage. As such, mobile home units can be replaced with modular or conventionally built single-family structures, if the replacement occurs on the same parcel. When land use commodities associated with mobile home pads are transferred off site, those commodities are restricted for use in multifamily developments of five or more units only. 50 The code also specifies that the creation, elimination, or conversion of ten or more mobile home units requires review and approval by the Governing Board. 51 The maximum allowable density for a mobile and manufactured home park is eight dwelling units per acre. If converted to single-family units, the maximum allowable density would drop to one dwelling unit per parcel, except where the parcel is one acre or larger, in which case TRPA could authorize construction of a second unit. 52 Since the Code specifies single-family densities on a per parcel basis, existing mobile home parks can be reconfigured and subdivided into individual parcels. This allows individual mobile home units to be sited on individually owned lots. When organized in such a way, multiple single-family structures can be sited at densities greater than one dwelling unit per acre. Multifamily development, by comparison, is permitted at a maximum density of 15 dwelling units per acre outside of Centers. 53 When units are legally designated as affordable housing, densities may be increased above the established maximum by up to 25 percent. 54 However, in order to qualify for the affordable housing density bonus, the project must satisfy a demonstrated need and the additional density must be demonstrated to be consistent with that of the surrounding area. One major constraint that exists to conversions is that some of the mobile home parks in the region have been subdivided into individual parcels and sold off to individual property owners. They are going to be the most challenging to convert to conventional multifamily housing because all of the property owners within the park are going to have to agree to the conversion, or bought out. Therefore, parks that are under the ownership of one entity will likely be easier to covert to conventional affordable multifamily housing.

49

Legally established mobile home pads must include all necessary utility hookups.

50

T. Avance, Tahoe Regional Planning Agency, Personal Communication, January 17, 2014.

51

TRPA. (December 12, 2012). Code of Ordinances, Subsection 2.2.2.B.1. Available at:

http://www.trpa.org/wp-content/uploads/TRPA_Code_of_Ordinances.pdf. 52

Ibid., Subsection 31.3.2.

53

Ibid.

54

Ibid., Subsection 31.4.1.

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Inventory of Existing Mobile and Manufactured Units According to data collected from the U.S. Census Bureau and Claritas, Inc., the Tahoe Region contained approximately 1,250 mobile home units as of the year 2000. 55 This number fell to an estimated 1,051 units by the year 2013, representing a loss of 199 units, or 16 percent since 2000. According to Census Tract data from the 2008-2012 American Community Survey (ACS), there were three tracts on the California side of the lake that had concentrations of greater than 100 mobile home units. Two of the tracts are located in the “Y” area of South Lake Tahoe, near where State Routes 89 and 50 intersect. Together, the two tracts had an estimated 380 mobile and manufactured housing units. The remaining Census Tracts located along the lake, ranging from Tahoma, southward to the state line, had between 25 and 65 mobile or manufactured housing units, likely representing one or two mobile home parks in each area. There was another large concentration of roughly 110 mobile and manufactured housing units in the Kings Beach area. On the Nevada side, the data indicates a concentration of 135 mobile units in the Zephyr Cove-Round Hill Village area. The tract located east of U.S. Highway 50 in Stateline had roughly 30 mobile units, while the tract extending from Zephyr Cove to Glenbrook had around 12 mobile units. In the Incline Village area, there were two Census Tracts that included roughly 30 mobile and manufactured housing units. Note that the above estimates may, or may not, include mobile home units that are in the process of being converted to alternative uses, such as those associated with the Beach Club and Cave Rock projects. For additional detail regarding the distribution of mobile and manufactured housing units, as reported by the U.S. Census Bureau, please refer to Appendix D. Records maintained by the California Department of Housing and Community Development indicate that there are currently 16 certified mobile home and RV parks, with 569 mobile home spaces, in operation on the California side of the lake. 56 Of these, nine are located in El Dorado County and offer 440 mobile home spaces. The remaining seven are located in Placer County and offer 129 mobile home spaces. Additional data provided by the City of South Lake Tahoe indicate that there are another 11 properties located within the city limits that are designated as mobile home parks in the El Dorado County parcel records. The absence of these properties on the list of state-certified mobile home parks may indicate that these properties are no longer in operation. If so, they may represent prime candidates for conversion to permanent multi-family housing. The number of active mobile home parks located on the Nevada side of the lake remains unclear. While assessor’s parcel records were unavailable via Douglas and Washoe Counties, a Google Maps search identified three mobile home parks in Stateline, and one in Glenbrook. The three properties in the Stateline area include the Kingsbury Manor Park, Ponderosa Park, and Tahoe Shores. Kingsbury Manor offers 32 mobile home spaces. It was not possible to determine number of spaces available at Ponderosa Park. The Tahoe Shores Mobile Home Park is slated for removal and will be replaced by a new high-end condominium development called the Beach Club. The fourth property is

55

See footnote 36.

California Department of Housing and Community Development. Mobile Home and RV Parks Search. Available at: https://ssw1.hcd.ca.gov/ParksListing/

56

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called Cave Rock Junction, which once offered 19 mobile home pads and is in the process of being converted to market rate single-family homes. In Incline Village, internet records identified only one mobile home park at 800 College Drive. This property, known as the College Mobile Home Park, reportedly offers 89 total spaces, which is significantly larger than the 22 reported mobile units identified in the Census data. As such, this property may also represent an opportunity for redevelopment.

Feasibility of Mobile/Manufactured Home Conversion To identify barriers to, and assess the economics of the conversion of existing mobile home parks to permanent housing, BAE conducted research into the two most recent cases that were approved by TRPA, including the Beach Club on Lake Tahoe (Beach Club) and the Cave Rock Junction (Cave Rock) projects. These projects help to demonstrate that the conversion of existing mobile home parks into permanent housing may be feasible, under the right conditions. They also highlight the two most likely approaches that developers could use to convert mobile units, under existing TRPA policies. The Beach Club on Lake Tahoe The Beach Club project received final approval through TRPA on August 27th, 2008. Construction has not yet begun, but will include removal of 155 existing mobile home units. The units are part of the Tahoe Shores Mobile Home Park, which covers 19.63 acres on the south shore of Lake Tahoe, in Douglas County, Nevada. The new development will consist of 143 high-end condominium units, in 13 buildings, with a 43,000 square foot beachfront clubhouse. According to the analysis presented in the project’s Draft Environmental Impact Statement (DEIS), TRPA staff concluded that none of the existing mobile home units represented affordable housing, as defined under the TRPA Code of Ordinances (i.e., serving residents with incomes of 80 percent of the county median or less). Under project Alternative A, staff concluded that 54 of the existing units qualified as moderate-income housing and therefore required mitigation. This determination included an evaluation of the relative obsolescence of the existing units. Staff concluded that most had long since reached the end of their functional lifespan and did not qualify for mitigation under applicable state law. Mitigation for the loss of 54 qualifying moderate-income units included the purchase of 39 units at the existing Aspen Grove apartment complex. These units were deed-restricted as affordable housing, as defined by the TRPA Code of Ordinances. An additional 15 moderate-income units will be provided, either on- or off-site, before the final phase of construction. The options provided for provision of the remaining 15 deed-restricted moderate-income units included: 1) on site, forsale condominium units; 2) off-site rental units; and 3) off-site, for-sale condominium units. Aspen Grove Apartments, Douglas County, NV Given constraints on land availability for multifamily development, the third option was deemed infeasible.

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Under the TRPA Code of Ordinances, the 15 deed-restricted moderate-income units will qualify for multifamily residential bonus units. The developer also requested that the 39 existing units located at Aspen Grove be considered for bonus unit allocation, since they will be deed restricted for affordable housing. Because the Aspen Grove property currently exceeds the maximum density allowed by the Plan Area Statement (PAS), staff determined that the property was not eligible for a bonus unit allocation. However, pursuant to the density bonus provisions laid out in the TRPA Code of Ordinances, the applicant opted to set aside two adjacent acres that will be legally consolidated with the Aspen Grove parcel, such that it will comply with the density limit. This will allow the deed restricted units at the Aspen Grove Property to qualify for bonus units that could be used for the main project. In a separate study conducted for TRPA in May of 2012, BAE tested the economics of the transfer ratios provided by the Regional Plan Transfer of Development Incentive Program. 57 The analysis determined that in most cases, the bonus units provided under the program were sufficient to augment the economic cost of purchasing and transferring development rights. In those cases where the transfer ratios were insufficient to offset the cost of purchasing land use commodities, an increase in anticipated project income (i.e., rents or sales prices) was generally sufficient to produce a feasible project. In the case of the Beach Club project, the majority of the development is proposed for construction on-site, so the transfer ratios do not apply. However, due to the provision of deed-restricted affordable and moderate-income housing, the project does qualify for bonus units. The bonus units can be built as market rate housing, and can offset units that would otherwise be developed using existing ERUs (i.e., those associated with the 155 existing mobile home pads). Any unused ERUs may then be banked, or sold, to offset other project costs. Cave Rock Junction The existing Cave Rock Junction Mobile Home Park is no longer in operation. The site is located approximately one half mile to the south of the Cave Rock Tunnel, between Sadie Lane and Lyons Avenue. According to the available documentation, 58 the site historically hosted 19 mobile home pads, with six additional conventionally built cabins, and one commercial building. The current property owner is proposing to redevelop the site with 20 single-family units and a new commercial structure fronting on Highway 50. The proposed project includes consolidation of the existing site with five vacant residential parcels located nearby. The consolidated site underwent a boundary line adjustment and was subdivided into 21 individual parcels (i.e., one per unit, plus one communal). A grading permit was approved in June 2013, which authorized removal of all existing structures, including mobile home pads and hookups. It also authorized tree removal, revegetation, and the

57

BAE Urban Economics. (2012). Financial Feasibility Analysis of the Regional Plan Transfer of Development

Incentive Program. Available at: http://media.wix.com/ugd/7796e8_f5d4aef89d4a4d0ca2e6bdb06615de3 c.pdf 58

Tahoe Regional Planning Agency. (June 27, 2013). TRPA, TMPO, and TRPA Committee Meetings.

Available at: http://www.trpa.org/wp-content/uploads/June_gb_2012_packet1.pdf

95

installation of on-site utilities and BMPs for storm water drainage. Upon removal of the existing development, the 25 associated ERUs, as well as five residential development rights, and 1,752 square feet of commercial floor area, will be banked for future use, or transferred off-site. Under the existing policy framework, conversion of the 19 mobile home pads and six cabins does not constitute a transfer of development rights, or a change of use. Therefore, conversion of existing mobile home pads to single-family housing units is permitted. If the units were transferred off-site, the associated ERUs would be restricted for use in multifamily development projects only. Under the TRPA Code of Ordinances, the elimination of ten or more mobile home units, including through conversion of use, requires review and approval by the Governing Board. The primary concern expressed by staff with regard to the proposed project was the elimination of mobile home units that would typically constitute an important source of affordable and moderate-income housing. At the time of approval, subsection 39.2.3.B of the TRPA Code of Ordinance required the use of a five-year rental history to determine whether or not the units constituted affordable or moderate-income housing. In this case, the property owner was able to provide documentation that the pads, and any associated mobile home units, had been vacant since 2003, and therefore did not have a 5-year rental history. The property owner was therefore not required to mitigate the loss of affordable or moderate-income housing units.

Summary and Recommendations According to current estimates, there are upwards of 1,000 existing mobile and manufactured housing units located in the Tahoe Region. This figure generally represents the upper limit of the potential yield of affordable or moderate-income units that could be produced through the conversion of existing mobile home parks; that is, if all existing units are converted to deed-restricted housing. There are a number of reasons why it is unlikely that this upper limit would ever be reached. The first is the fact that many of the existing units are functionally obsolete under applicable state laws. Many of the existing mobile home parks are also no longer operational. In both instances, prospective developers may not be required to mitigate for the loss of existing units, if they no longer meaningfully function as affordable or moderate-income housing. In such cases, property owners can utilize ERUs associated with mobile home parks for on-site, market rate, singlefamily development. The property owner can also legally bank the ERUs, or transfer them off-site to support market rate, multifamily development. The only incentive to preserve the affordability of converted mobile home units is the availability of bonus units. Simply providing bonus units in exchange for deed restriction is an insufficient incentive to preserve affordability. As evidenced in the Beach Club project, the developer may claim bonus units in cases where mitigation is required. However, because converted mobile home pads represent valid ERUs, the developer has a greater financial incentive to construct market-rate single-family housing using the existing rights, or to transfer the rights for use in a higher-end multifamily condominium project. By orienting the resulting real estate product toward higher-income households, the developer minimizes the need for bonus units, and side steps the issue of preserving the affordability of converted units altogether. As it currently stands, the TRPA Code of Ordinances allows existing manufactured or mobile home units to be relatively easily removed or redeveloped in favor of more lucrative types of projects. This

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makes these units vulnerable to loss from the regional affordable housing supply. To ensure that proposed conversion projects mitigate for the loss of existing mobile home pads, TRPA could consider revisions to the TRPA Code of Ordinances that would define a mobile or manufactured home pad as an affordable or moderate-income housing unit, by default. As an alternative, TRPA could revise the methodology used to determine whether conversion of existing mobile home pads would require mitigation as a loss of affordable or moderate-income housing. Rather than evaluating whether existing units presently are used as affordable or moderate-income housing, an updated methodology should evaluate whether the existing pads could reasonably be used to provide affordable or moderate-income housing, through the replacement of existing units, in a way that would be financially feasible for the property owner. Considering that ERUs associated with mobile and manufactured units are tied to the presence of an established pad, with necessary utility hookups, the presence of a vacant mobile home pad, or an obsolete mobile home unit, should not represent grounds to dismiss the prospective affordability of the mobile home space. 59 This is because the space, by definition, might reasonably be occupied by an affordable or moderateincome unit, if such a unit was moved in, or an existing unit replaced. The above policy change would ensure that converted mobile home pads would require mitigation if they currently represent affordable or moderate-income housing opportunities, but it would also remove much of the existing market incentive to redevelop mobile home parks that may be in poor condition. However, the policy change would increase the importance of the existing residential bonus unit and transfer ratio provisions and put a focus on the incentive to transfer of existing mobile home park development away from sensitive lands and into Centers. Implementation of the above recommendations would ensure that existing mobile home pads, including those that are no longer in operation, so long as they provide affordable housing opportunities, would be replaced by deed-restricted units (either through direct replacement, or mitigation). Given that the greatest number of mobile units are located in South Lake Tahoe, this area represents the area of greatest potential impact. The changes would help to ensure that the existing stock of affordable and moderate-income housing is preserved, to the greatest degree possible. As such, the proposed policy changes would primarily benefit existing mobile home park residents. The changes would, nonetheless, benefit other households in need of affordable and workforce housing, including singles, non-family and family households, and permanent participants in the local labor force. This type of policy change would not as effectively address the needs of seasonal workers, since these individuals would be better served through dormitory or higher density multifamily development. Another strategy, and a probably less controversial one, would be increase the inventory of quality multifamily housing in Centers, which would help to reduce the need and demand for mobile home units. In the development of Area Plans, local jurisdictions may also want to consider including mobile home parks in Centers where additional density and height is allowed to encourage the conversion of mobile home parks to affordable housing. Douglas County is planning

59

Notwithstanding subsection 51.5.4.B that states that “transfers of units of use shall not be permitted for

development that has become derelict.”

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to include the entire Kingsbury Manor Mobile Home Park in the Kingsbury Town Center with their second Area Plan.

Policy #3: Allow Second Units on Small Lots Near Centers

Second Unit, Lakeview Dr., South Lake Tahoe, CA

Secondary dwelling units typically represent selfcontained living quarters, with independent cooking, eating, sleeping, and sanitary facilities. These units are either attached to a primary residential structure, or can represent independent detached units. Second units are an important source of affordable and workforce housing in many communities, since their construction does not require the purchase of additional land. Second units that are developed as rental housing can also provide an important source of income for homeowners, such as elderly households living on fixed incomes or moderateincome households whose ability to afford home ownership could be enhanced by the ability to generate rental income from a second unit. In addition, second units are typically located in neighborhoods with less through-traffic and more greenspace and therefore tend to more attractive to families and the elderly.

TRPA currently limits the production of secondary dwelling units within the Tahoe Region. Under the TRPA Code of Ordinances, which supersedes respective state laws, market-rate secondary units are permitted on lots greater than one acre in size. However, a second unit is considered a residential unit, and is subject to the same requirements, including the need to acquire a residential allocation, development right, and land coverage rights. In order to better facilitate the development of second units, the 2008 Housing Element for the City of South Lake Tahoe recommended working with TRPA to modify the TRPA Code of Ordinances to allow second units on parcels smaller than one acre. 60 61 It also recommended modifications that would permit the use of bonus units for the creation of secondary residential units. Per the direction provided by TRPA staff, the following evaluates the potential effectiveness of modifying subsection 21.3.2 of the TRPA Code of Ordinances to allow second units on parcels smaller than one acre that are located within 1/4 mile (walking distance) of Centers where commercial services and transit are available. To the extent possible, the analysis also identifies the need for additional incentives, such as the provision of bonus units.

60

Mintier Harnish. (2009). General Plan Housing Element. City of South Lake Tahoe. Available at:

http://updated.mintierharnish.com/wp-content/uploads/2011/10/SouthLakeTahoe_AdoptedHE_ 20081209.pdf 61

The current draft Housing Element also recommends modification of the TRPA Code of Ordinances to allow

second units on parcels smaller than one acre in size.

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Existing Policy Framework Under the TRPA Code of Ordinances, secondary residential units are permissible as accessory to a primary use on parcels one acre in size or larger. 62 This may include the establishment of guest houses, affordable or market rate rental units, caretaker’s residence, manager’s residence, commercial uses, or public and recreational uses. While the maximum density for single-family housing is one dwelling unit per parcel, this can increase to two dwelling units with approval of a secondary residential unit. When a second unit is deed restricted as affordable housing, 63 the subject parcel can be smaller than the identified minimum acreage, provided that it is located in an area with an adopted local government housing program. 64 A certified local government housing program is required to specify the minimum parcel size, maximum floor area, and other development standards that would apply to second units, within specified jurisdictional boundaries. The existing TRPA Code of Ordinances does not specify development standards for secondary units. Development standards for secondary units often address the following: •

• •

Size Limit: For example, under California State Law secondary residential units are permitted by right up to 1,200 square feet and in Douglas County, Nevada, secondary units are limited to 800 square feet outside of the TRPA jurisdictional boundary; Parking: Local jurisdictions typically require a minimum of one on-site parking space (often covered) for second units; and Architectural Compatibility: Second residences are generally required to meet the same design standards as single-family homes and to be architecturally compatible with the main dwelling unit.

Even though secondary residences are accessory to the primary use, establishment still requires acquisition of a residential allocation and development right, as well as any necessary coverage rights.

Parcel Inventory and Size Assessment A geographic information systems (GIS) analysis conducted by TRPA identified approximately 10,541 residentially-zoned parcels located within one-quarter mile of a Center boundary. Additional analysis conducted by BAE excluded all parcels with existing non-residential uses, as well as parcels with two or more existing residential units (i.e., multifamily and second units). The analysis also excluded all state and federally-owned land, but included parcels owned by local government agencies. This was due to the common role of local government agencies in redevelopment efforts, which could result in the sale of the subject properties for single-family use. As reported in Table 30, below, there are 5,581 parcels that meet the above criteria. Of those, approximately 4,700 featured existing singlefamily dwelling units. The remaining 872 parcels were vacant. Broken down by size, the table shows

62

TRPA. (December 12, 2012). Code of Ordinances, Subsection 21.3.2. Available at:

http://www.trpa.org/wp-content/uploads/TRPA_Code_of_Ordinances.pdf. 63

Ibid., Subsection 21.3.2.

64

Ibid., Subsection 21.3.2.B.

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that the vast majority of parcels are less than one-half acre in size, and only about six percent, or 345 parcels are one-half acre or larger. Table 30: Residentially Zoned Parcels within 0.25 Miles of Town Centers by Acreage Category Acreage Category > 1.0 Acre 0.75 to 0.99 0.5 to 0.74 0.25 - 0.49 < 0.25 Acre Total, All Categories

Num ber of Parcels 94 68 183 1,321 3,915 5,581

Percent of Total 2% 1% 3% 24% 70% 100%

Sources: TRPA, 2013; BAE, 2014.

Effectiveness of Allowing Second Units on Smaller Parcels As currently envisioned, modification of the existing TRPA Code of Ordinances to allow second units on parcels smaller than one acre in size could potentially result in a large number of new secondary residential units. This, however, assumes that the parcels are located in land capacity districts that would allow sufficient land coverage to accommodate multiple housing units. The TRPA Code of Ordinances requires that a parcel be located in land capacity districts four to seven, in order to be eligible to receive residential development rights for use in the construction of secondary residences. 65 The ability to site a second unit on a parcel is further limited by maximum allowable coverage within a given land capacity district, which ranges between 20 and 30 percent, and the size of the specific parcel. Assuming that all of the parcels located within one-quarter mile of Centers are within high capability districts (Land Capability Districts 4 through 7), there are enough parcels of sufficient size to accommodate approximately 180 to 280 secondary housing units, assuming 2,000 total square feet of coverage needed for the primary and secondary units combined.

Summary and Recommendations It may be feasible to construct second units on parcels smaller than one acre that would be affordable to low- and moderate-income households. There are, however, a number of barriers to the effective implementation of the proposed program. First, the existing coverage requirements effectively limit the number of potential second units that could be constructed within the identified area. Based on a maximum 20 to 30 percent coverage, there are enough parcels of sufficient size within one quarter mile of Centers to accommodate around 180 to 280 secondary housing units. With an emphasis on the construction of smaller units, which could potentially be built on smaller lots under existing coverage restrictions, the potential number of new secondary units could increase beyond the 180 to 280 estimate. Additional constraints include the need to purchase necessary land use commodities.

65

TRPA. (December 12, 2012). Code of Ordinances, Subsection 51.3.3. Available at:

http://www.trpa.org/wp-content/uploads/TRPA_Code_of_Ordinances.pdf.

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In order to maximize the yield of potential units, and to help ensure affordability, TRPA should consider revision of the existing TRPA Code of Ordinances to permit the use of residential bonus units for deed-restricted affordable secondary housing units. This would help to reduce fixed costs and to streamline the permitting process. Because secondary units could most feasibly be constructed as moderate-income, TRPA may also want to exclude moderate-income housing, or at least moderate-income second units, from the need to acquire a residential allocation. This would help to substantially reduce costs to the property owner, and would help to ensure affordability for prospective tenants. TRPA should also recognize that loosening restrictions on market rate second units could result in the creation of additional vacation rental units, which would not help to improve the availability of workforce housing. Thus, if greater incentives are given for creation of second units, some stipulations on use for permanent resident housing should be considered. If implemented, the proposed policy changes with regard to second units would most likely aid in the construction of units that would be affordable to moderate-income households, most likely taking the form of detached single-family structures that would benefit both family and non-family households. If deed-restricted, or placed under an affirmative use covenant, second units would be of distinct value to members of the local labor force. Therefore, consideration should be given to amending the Code to allow second residential units on parcels less than one acre within ¼ mile of Centers if local jurisdictions include provisions in their Area Plans to ensure second units are appropriately designed and located.

Policy #4: Revise Code to Support Workforce Housing

Meadow Brook, Stateline, NV

According to the background report, the greatest apparent housing need exists among extremely lowand very low-income households. In the current rental market, most low-, moderate-, and above moderate-income households should be able to locate market rate housing that is affordable at their respective income levels, without incurring excessive housing costs. At current prices, the for-sale housing market continues to offer some opportunities for above moderate-income households, but largely excludes lower-income households, with limited opportunities for moderate-income home ownership.

As a region that relies on service industries as major sources of employment, both seasonal and year around, the continued provision of low cost housing for low- and moderate-income households remains important for workforce recruitment and retention. Data on regional commuting patterns suggests that a large portion of the Tahoe workforce already travels outside of the region for housing. Even within the region, there is wide variation in the availability and pricing of both rental and for-sale housing. As a result, there remains a substantial and persistent need for additional

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housing that can better meet the needs of the region’s workforce. Per the direction provided by TRPA staff, the following section discusses options for expanding the TRPA Code of Ordinances to encourage the construction and rehabilitation of housing that meets the housing needs of the lowand moderate-income workforce.

Existing Policy Framework As described earlier, the TRPA Code of Ordinances defines “affordable housing” to include deed restricted residential housing that is used exclusively for “lower-income households.” 66 TRPA defines this later term as including households with incomes equal to 80 percent, or less, of the respective county’s median income. These units can include single-family, multifamily, multi-person, or group quarters facilities. In the latter case, TRPA requires that calculation of qualifying incomes be based on each residents’ income, rather than the collective income of all those residing in the dwelling (i.e., household income). The term “moderate-income” housing is defined to include deed restricted housing that is used exclusively for “moderate-income households.” 67 TRPA defines this latter term as including households with incomes between 80 and 120 percent of the respective county’s median income value. Affordable housing currently qualifies for special incentives, such as exemption from the residential allocation requirement. Moderate-income housing, by comparison, is not exempt from the residential allocation requirement. For a description of the way bonus units can be applied to affordable and moderate-income housing development please see the Existing Policy Framework subsection under Priority Policy #3.

Assessment of Existing Affordability Gap As described in the Regional Housing Market Conditions section of this report, prospective moderateincome homeowners face a stark gap between the purchase price that would be affordable at their given income level, and the going market price for single-family homes. For example, the median sale price for a single-family home was $385,000 between December 2012 and May 2013. 68 Meanwhile, the estimated maximum price that a four person moderate-income household could pay for a home is $289,000. 69 Thus, a moderate-income household at the top of the income category (i.e., income equal to 120 percent of AMI) would need a subsidy of approximately $96,000 to afford a median priced single-family home.

66

TRPA. (December 12, 2012). Code of Ordinances, Subsection 90.2. Available at: http://www.trpa.org/wp-

content/uploads/TRPA_Code_of_Ordinances.pdf. 67

Ibid.

68

Note that the median sales price figure reported earlier included single-family, duplex, and condominium

units. The figure reported here excludes duplex and condominium units, and reports only single-family sales. 69

This assumes a 3.5-percent down payment, a 30-year fixed-rate mortgage at a 4.5 percent interest rate,

which would require payment of mortgage insurance (both up front and annual). It applies standard assumptions regarding property taxes and homeowner’s hazard insurance, and no more than 30 percent of household income dedicated to housing costs.

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Condominium prices are more affordable, with a median price of $295,000 per unit, based on sales that occurred between December 2012 and May 2013. However, since condominium units are typically smaller in size, a moderate-income household purchasing a condominium would typically need to be a smaller household in order to prevent overcrowding, and would thus have a lowerincome. For example, a two-person household at the moderate-income limit could afford to purchase a home costing about $232,000 using the same underwriting assumptions as those used for the example above. Thus, this household would require a subsidy of approximately $63,000 in order to afford a median priced condominium unit in the region.

Summary and Recommendations These affordability gaps demonstrate that the typical housing developer would not ordinarily be attracted to building housing affordable to moderate-income households, unless significant incentives were available. Although developers may be able to build single-family housing units and condominium units for less than the median prices discussed above, developers will naturally tend to want to build units that are as expensive as possible, to maximize the return on the investment and to minimize the impact of fixed costs. In a policy environment where developers are required to purchase valuable land use commodities, the fixed nature of the commodity costs, relative to unit size, provides a strong incentive toward construction of larger, higher priced units. While an affordable housing developer might seek to build relatively inexpensive housing with the express purpose of serving moderate-income households, they would be challenged to purchase land and build for-sale units multifamily and single-family units for less than $276,500 to $336,500 each, respectively, 70 still leaving a gap between their costs and the cost to construct the units. Unlike units affordable to low- and very low-income households, state and federal subsidies for moderate-income for-sale housing are uncommon. This typically means that moderate-income housing subsidies must come from other, primarily local, sources. TRPA could help to address the feasibility gap by extending certain incentives available for affordable housing, to deed restricted multifamily moderate-income housing, if located within a Center. This could include removal of the requirement that deed-restricted moderate-income units must obtain residential allocations. This would significantly reduce administrative burden associated with the construction of moderate-income housing. It would also ensure that moderate-income developers would not have to compete with market rate homebuilders for the very limited supply of annual residential allocations. Another benefit of such a policy change is that it would encourage moderateincome housing developers to pursue the existing pool of moderate-income residential bonus units, since they would no longer require an allocation prior to construction. This would also allow the developer to more easily take advantage of the existing residential bonus unit substitution clause, which allows developers to substitute residential bonus units for ERUs in the project area, thereby monetizing unused development rights or ERUs, which can help to offset project costs and subsidize

70

This assumes a 1,000 square foot condominium unit and a 1,300 square foot single-family unit. The

estimates combine the construction cost figures described under Policy #3. Land cost estimates were derived from Trulia, assuming an average lot size of 0.14 acres and an average price per acre of $445,590.

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affordability. Lastly, TRPA could consider revising the TRPA Code of Ordinances to formally acknowledge the importance of mixed-income housing development in Centers and provide provisions encouraging the pursuit of projects that allow market rate units to essentially crosssubsidize the inclusion of low- or moderate-income housing.

Policy #5: Remove Other Barriers and Streamline Process Through the analysis of the four prior priority policy options, BAE identified a variety of potential amendments to the TRPA Code of Ordinances that could help to facilitate the achievement of the previously discussed policy priorities. This section presents a consolidated list of recommended Code amendments. They are listed in numbered order, based on their Code subsection. For detail regarding which Code amendments pertain to which priority policies, please refer to the policy matrix provided at the end of this section. Table 31, below, summarizes the recommended amendments and indicates which of the four previous policy priorities each of the amendments would support.

Recommended Code of Ordinance Amendments Subsection 2.2.2.B: Requires the review and approval of the Governing Board for the allocation of ten or more residential bonus units for affordable or moderate-income housing. It also requires the review and approval of mobile home park projects that would create or remove ten or more mobile homes, including conversion to other uses. Suggested Amendment: This provision represents a disincentive to pursue medium to large sized projects, which may otherwise be more economically viable, since review by the full Governing Board would represent a greater degree of uncertainty and risk. Removal of this requirement or delegation of this provision to the hearings officer or staff would help to streamline the approvals process.

Subsection 21.3.2.A.1: Specifies that secondary units can be established on parcels greater than one acre in size. Suggested Amendment: Modification of this provision to allow second units on parcels less than one acre within 1/4 mile of Centers would help to increase the yield of low- and moderate-income second units, while also furthering the Goals and Policies of the Regional Plan and the Regional Transportation Plan/SCS.

Subsection 21.3.2.A.2: Specifies that secondary units can be established on parcels located within jurisdictions that have a certified local government housing program, if those units are deed restricted for affordable housing. Suggested Amendment: This provision should to be eliminated, because it simply creates an additional layer of regulation by requiring a certified local government housing program. Also, the deed restriction provision should be modified to allow second units that are

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restricted for moderate-income housing, or simply placed under an affirmative use covenant that would ensure year-round occupancy. Table 21.4-A: Includes a list of primary uses and definitions. Suggested Amendment: Add a definition for “Transitional Housing” (establishments primarily engaged in the provision of residential social and personal care for children, the aged, and special categories of persons with some limits on ability for self care, but where medical care is not a major element. The use includes, but is not limited to, children's homes, halfway houses, orphanages, rehabilitation centers, and self-help group homes). Encourage local jurisdictions to zone for Transitional Housing with Area Plans. Table 21.4-A: Includes a list of primary uses and definitions. Suggested Amendment: Add a definition for “Emergency Shelter” (any facility with overnight sleeping accommodations, the primary purpose of which is to provide temporary shelter for the homeless in general or for specific populations of the homeless). Encourage local jurisdictions to zone for Emergency Shelters with Area Plans. Subsection 31.4.1.A: Allows for 25 percent density bonuses density standards established in Section 31.3, which limits multifamily housing to a maximum density of 15 dwelling units per acre, to affordable housing projects. Suggested Amendment: Amend this provision to allow for 25 percent density bonuses to be applied to the density standards established in Table 13.5.2-1: Minimum Development Standards for Area Plans for affordable (low-income), moderate-income, and mixed-income deed restricted multi-family housing projects within Centers. Section 31.5.2: Limits the maximum density of multifamily housing if part of a mixed-use project. Suggested Amendment: Revise this section to allow multifamily housing to be developed at the maximum allowable residential density with mixed-use projects in Centers. Development of multifamily housing should be allowed at maximum densities as long as it can meet all other development standards (coverage restrictions, BMP requirements, height limitations, etc.).

Subsection 50.10.1.D: Limits the conversion of residential units and tourist accommodation units to 200 each within a calendar year. Suggested Amendment: Remove the limit for tourist accommodation unit conversions in order to accelerate the removal of older motels/hotels and restoration of sensitive sites, as well as to accelerate redevelopment and the development of more low-,moderate-, and mixed-income housing in Centers.

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Subsection 50.10.2.B: Requires that the development of TAUs, that have been converted to ERUs, for use in multifamily projects be developed on the original site. Suggested Amendment: Amend this provision to allow conversion onsite or for the TAUs converted to ERUs to be transferred to Centers.

Subsection 50.10.7: Permits the conversion of TAUs to ERUs on-site, if the converted units are used for deed restricted affordable housing. Suggested Amendment: Amend this provision to allow conversion onsite or for the TAUs converted ERUs to be transferred to Centers to be used for both affordable and moderate income housing, as well as potentially mixed-income housing.

Subsection 52.3.2.C: Allows the use of multi-residential bonus units for deed-restricted affordable housing units without the acquisition of an associated residential allocation. Suggested Amendment: Expansion of the existing provision to include deed restricted multifamily moderate-income housing units constructed within Centers or second residential units constructed within ¼ mile of Centers would provide an additional incentive. Due to the limited number of residential bonus units that are allocated for moderate-income housing, this amendment would not overly interfere with the incentives for affordable housing construction.

Chapter 90: Includes definitions. Suggested Amendment: Consider revising the definition of “Affordable Housing” and creating a new definition for “Low-Income Housing” to be consistent with HUD definitions: Affordable Housing: Housing that costs no more than 30 percent of a household's monthly income. That means rent and utilities in an apartment or the monthly mortgage payment and housing expenses for a homeowner should be less than 30 percent of a household's monthly income to be considered affordable. Low-Income Housing: Residential housing, deed-restricted to be used exclusively for lowerincome households (income not in excess of 80 percent of the respective county's median income). Low-income housing also includes very low-income housing (not to exceed 50 percent of the respective county's median income). Such housing units shall be made available for rental or sale at a cost that does not exceed the recommended state and federal standards. Each county's median income will be determined according to the income limits published annually by the Department of Housing and Urban Development.

Subsection 52.3.3: Allows for residential bonus units to be awarded to multifamily housing projects if certain environmental mitigation measures are achieved.

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Suggested Amendment: Consider amending or eliminating this section because it is not being taking advantage of. This is likely due to the complexity of the code provision.

Subsection 52.3.5.C: Requires that in instances where residential bonus units are substituted for other development rights, all units remaining in the project area must undergo deed restriction as affordable or moderate-income housing. Suggested Amendment: To provide greater flexibility, this subsection should be amended such that it requires bonus units to be utilized for affordable or moderate-income housing, but that the associated units can be provided off-site. Also, consider removing the requirement that “all” units remaining in the project area must undergo deed restrictions as affordable or moderate-income housing in order to foster the development of mixed-income housing.

Other Suggested Code of Ordinance Amendments Suggested Amendment: Consider designation of existing mobile home pads as affordable or moderate–income housing, by default, or institute tighter standards to allow conversion of mobile home properties without mitigation for loss of affordable housing based on the ability of the pad to reasonably accommodate units through the siting of new or replacement manufactured housing. Rationale: An amendment such as this would help to ensure that proposed mobile home conversion projects fully mitigate for the loss of existing mobile home pads, which represent valuable opportunities for the potential provision of affordable or moderate-income housing, regardless of whether the pad is currently unoccupied or the existing unit is legally obsolete. However, it could also discourage the redevelopment of mobile home sites and associated environmental benefits because of the additional costs associated with mitigating the loss of all of the mobile home units. Suggested Amendment: Revise existing bonus unit provisions to allow the use of bonus units for the construction of second units. Rationale: By removing the need to purchase development rights, property owners would be able to construct secondary units at lower cost, which would help to provide affordability. Suggested Amendment: Introduce language into the TRPA Code of Ordinances that acknowledges the value of mixed-income multifamily housing development within Centers and provide incentives for the inclusion of deed restricted affordable or moderate-income units, within proposed market rate housing developments. Rationale: The formal acknowledgment of mixed-income housing as a defined housing goal could encourage developers to use market rate units to cross-subsidize the inclusion of moderate-, or low-income, units.

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Suggested Amendment: Consider revisions that would permit a wider variety of housing types, such as single room occupancy (SRO) apartments and cooperative housing. Rationale: Such types of development can represent opportunities to more cost-effectively house seasonal and temporary employees, for whom standard housing may be neither desired nor affordable.

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Policy #4 - Workforce Housing

Board approval to allocate ten or more bonus units or remove ten or more mobile home units

21.3.2.A.1

Allows second units to be constructed on parcels greater than one acre and requires that second units be deed restricted affordable

√

√

21.3.2.A.2

Allows second units to be constructed on parcels greater than one acre and requires that second units be deed restricted affordable

√

√

50.10.2.B & 50.10.7

Converted TAUs must be built on-site

√

52.3.2.C

Bonus units used for deed restricted housing do not need an allocation

√

52.3.5.C

With bonus unit substitution, all units remaining on-site must be deed restricted

√

52.3.5.D

ERUs made available through substitution can be transferred to multi-residential facilities only

√

Relaxation of existing coverage limits for parcels within 1/4 mile of town centers

√

√

Introduce language that would encourage construction of smaller second units

√

√

Allow use of residential bonus units for deed-restricted second units

√

√

Introduce language that acknowledges the importance of mixed-income housing

√

√

Policy #2 - Mobile Homes

2.2.2.B

Policy #1 - TAUs

Policy #3 - Second Units

Table 31: Matrix of Recommended Code Amendments

√

√

Recommended Amendments

√

Other Suggested Amendments Designate mobile home pads as affordable or moderate-income by default

√

Revise method for calculating mitigation for loss of mobile home units

√

Consider introduction of provisions for alternative housing types (i.e. SRO, etc.)

√

√

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√

APPENDIX A: REGIONAL PLAN HOUSING SUBELEMENT

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HOUSING

T

he purpose of this Subelement is to assess the housing needs of the Region and to make provisions for adequate housing. The Bi-State Compact does not specifically mandate this Subelement nor do the environmental thresholds address this topic. However, the states of Nevada and California both require housing to be addressed as part of a General Plan. It is the intent of this Subelement to address housing issues on a regional basis with Area Plans handling the specifics of implementation.

GOAL HS-1 PROMOTE HOUSING OPPORTUNITIES FOR FULL-TIME AND SEASONAL RESIDENTS AS WELL AS WORKERS EMPLOYED WITHIN THE REGION. POLICIES: HS-1.1

SPECIAL INCENTIVES, SUCH AS BONUS DEVELOPMENT UNITS, WILL BE GIVEN TO PROMOTE AFFORDABLE OR GOVERNMENT-ASSISTED HOUSING FOR LOWER INCOME HOUSEHOLDS (80 PERCENT OF RESPECTIVE COUNTY'S MEDIAN INCOME) AND FOR VERY LOW INCOME HOUSEHOLDS (50 PERCENT OF RESPECTIVE COUNTY'S MEDIAN INCOME). EACH COUNTY'S MEDIAN INCOME WILL BE DETERMINED ACCORDING TO THE INCOME LIMITS PUBLISHED ANNUALLY BY THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.

HS-1.2

LOCAL GOVERNMENTS WILL BE ENCOURAGED TO ASSUME THEIR "FAIR SHARE" OF THE RESPONSIBILITY TO PROVIDE LOWER AND VERY LOW INCOME HOUSING.

HS-1.3

FACILITIES SHALL BE DESIGNED AND OCCUPIED IN ACCORDANCE WITH LOCAL, REGIONAL, STATE, AND FEDERAL STANDARDS FOR THE ASSISTANCE OF HOUSEHOLDS WITH LOW AND VERY LOW INCOMES. SUCH HOUSING UNITS SHALL BE MADE AVAILABLE FOR RENTAL OR SALE AT A COST TO SUCH PERSONS THAT WOULD NOT EXCEED THE RECOMMENDED STATE AND FEDERAL STANDARDS.

HS-1.4

AFFORDABLE OR GOVERNMENT ASSISTED HOUSING FOR LOWER INCOME HOUSEHOLDS SHOULD BE LOCATED IN CLOSE PROXIMITY TO EMPLOYMENT CENTERS, GOVERNMENT SERVICES, AND TRANSIT FACILITIES. SUCH HOUSING MUST BE COMPATIBLE WITH THE SCALE AND DENSITY OF THE SURROUNDING NEIGHBORHOOD.

GOAL HS-2 TO THE EXTENT FEASIBLE, WITHOUT COMPROMISING THE GROWTH MANAGEMENT PROVISIONS OF THE REGIONAL PLAN, THE ATTAINMENT OF THRESHOLD GOALS, AND AFFORDABLE HOUSING INCENTIVE PROGRAMS, MODERATE INCOME HOUSING WILL BE ENCOURAGED IN SUITABLE LOCATIONS FOR THE RESIDENTS OF THE REGION.

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POLICIES: HS-2.1

SPECIAL INCENTIVES, SUCH AS BONUS DEVELOPMENT UNITS, WILL BE MADE AVAILABLE TO PROMOTE HOUSING FOR MODERATE INCOME HOUSEHOLDS (120 PERCENT OF RESPECTIVE COUNTY'S MEDIAN INCOME). SUCH INCENTIVES SHALL BE MADE AVAILABLE WITHIN JURISDICTIONS THAT DEVELOP HOUSING PROGRAMS THAT ARE SUBSTANTIALLY CONSISTENT WITH AND COMPLEMENTARY TO THE REGIONAL PLAN.

HS-2.2

RESIDENTIAL UNITS DEVELOPED USING MODERATE INCOME HOUSING INCENTIVES SHALL BE USED TO PROVIDE HOUSING FOR FULL-TIME RESIDENTS OF THE TAHOE REGION. SUCH UNITS SHALL NOT BE USED FOR VACATION RENTAL PURPOSES.

HS-2.3

RESIDENTIAL UNITS DEVELOPED USING MODERATE INCOME HOUSING INCENTIVES SHALL REMAIN PERMANENTLY WITHIN THE PROGRAM.

GOAL HS-3 REGULARLY EVALUATE HOUSING NEEDS IN THE REGION AND UPDATE POLICIES AND ORDINANCES IF NECESSARY TO ACHIEVE STATE, LOCAL AND REGIONAL HOUSING GOALS. POLICIES: HS-3.1

TRPA SHALL REGULARLY REVIEW ITS POLICIES AND REGULATIONS TO REMOVE IDENTIFIED BARRIERS PREVENTING THE CONSTRUCTION OF NECESSARY AFFORDABLE HOUSING IN THE REGION. TRPA STAFF WILL WORK WITH LOCAL JURISDICTIONS TO ADDRESS ISSUES INCLUDING, BUT NOT LIMITED TO, WORKFORCE AND MODERATE INCOME HOUSING, SECONDARY RESIDENTIAL UNITS AND LONG TERM RESIDENCY IN MOTEL UNITS IN ACCORDANCE WITH THE TIMELINE OUTLINED IN THE IMPLEMENTATION ELEMENT.

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APPENDIX B: STUDY AREA DEFINITIONS

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Tahoe Region, Study Area Definition 2000 Census Tracts Geographic ID Tract Name 06017030102 Census Tract 301.02 06017030200 Census Tract 302 06017030300 Census Tract 303 06017030401 Census Tract 304.01 06017030402 Census Tract 304.02 06017030501 Census Tract 305.01 06017030502 Census Tract 305.02 06017030503 Census Tract 305.03 06061020101 Census Tract 201.01 06061020102 Census Tract 201.02 06061020103 Census Tract 201.03 06061020104 Census Tract 201.04 06061020105 Census Tract 201.05 06061020106 Census Tract 201.06 06061020107 Census Tract 201.07 32005000301 Census Tract 3.01 32005000302 Census Tract 3.02 32005000400 Census Tract 4 32031003302 Census Tract 33.02 32031003304 Census Tract 33.04

State CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA NV NV NV NV NV

2010 Census Tracts Geographic ID Tract Name 06017030200 Census Tract 302 06017030301 Census Tract 303.01 06017030302 Census Tract 303.02 06017030401 Census Tract 304.01 06017030402 Census Tract 304.02 06017030502 Census Tract 305.02 06017030504 Census Tract 305.04 06017030505 Census Tract 305.05 06017031600 Census Tract 316 06017032000 Census Tract 320 06017990000 Census Tract 9900 06061020104 Census Tract 201.04 06061020105 Census Tract 201.05 06061020106 Census Tract 201.06 06061020107 Census Tract 201.07 06061022100 Census Tract 221 06061022200 Census Tract 222 06061022300 Census Tract 223 06061990000 Census Tract 9900 32005001600 Census Tract 16 32005001700 Census Tract 17 32005001800 Census Tract 18 32005990000 Census Tract 9900 32031003305 Census Tract 33.05 32031003306 Census Tract 33.06 32031003307 Census Tract 33.07 32031003308 Census Tract 33.08 32031003309 Census Tract 33.09 32031990000 Census Tract 9900 32510990000 Census Tract 9900

State CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA NV NV NV NV NV NV NV NV NV NV NV

Sources: U.S. Census Bureau, 2013; BAE, 2013.

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Tahoe Area Counties, Study Area Definition County Nam e EL DORADO PLACER CARSON DOUGLAS WASHOE

State CA CA NV NV NV

Sources: U.S. Census Bureau, 2013; BAE, 2013.

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APPENDIX C: INTERVIEW AND MEETING PARTICIPANTS PRIVATE AND NON-PROFIT SECTOR STAKEHOLDERS

Lyn Barnett Meea Kang Pat Davison Shellan Rodriquez Theresa May Duggan

President President Executive Director Associate/Project Manager Board of Directors

St. Joseph Community Land Trust Domus Development, LLC Contractors Association of Truckee-Tahoe The Pacific Communities Tahoe-Truckee Community Foundation

LOCAL GOVERNMENT REPRESENTATIVES

Brandy McMahon Cathy Donovan Christopher Schmidt Steve Buelna Eva Krause Hilary Roverud Peter Maurer Shawna Purvines

Senior Planner Housing Specialist Senior Planner Supervising Planner Principal Planner Development Director Principal Planner Senior Planner

Douglas County, Nevada Placer County, California Placer County, California Placer County, California Washoe County, Nevada City of South Lake Tahoe, California El Dorado County, California El Dorado County, California

Regional Planning Manager Senior Planner Senior Planner

Tahoe Regional Planning Agency Tahoe Regional Planning Agency Tahoe Regional Planning Agency

TRPA REPRESENTATIVES

Arlo Stockham Shay Navarro Theresa Avance

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APPENDIX D: DISTRIBUTION OF MOBILE AND MANUFACTURED UNITS, 2008-2012

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