Tahoe’s reliance on tourism rises
Study says economy must be diversified
RENO — The COVID-19 pandemic helped expose the vulnerability of Lake Tahoe’s increasingly tourism-dependent economy as housing costs balloon, year-round residency declines and more workers commute from afar or seek jobs elsewhere, a new report said.
The Tahoe Prosperity Center said the findings in the study it commissioned with the help of a grant from the U.S. Economic Development Administration underscore the need to diversify Tahoe’s economy, build more affordable housing and use an increasingly skilled workforce.
“Exorbitant home prices, the high cost of living, long-haul commuters, a shortage of workers, and a flat to down economy over the past 10 years point to an economy that is not healing itself, nor resilient to disruptive changes that impact visitor-based economies more deeply,” the study said.
Tourism accounts for more than 60 percent of Lake Tahoe’s $5 billion regional economy — up from 40 percent in 2010, according to the nonprofit center’s research released last week.
“Relying so heavily on just one industry for residents’ livelihoods and tax base for schools, health care and public service is a risky proposition,” the report said. “And the risks are mounting due to economic downturns, worsening wildfires, and changing weather patterns.”
Effects of drought
Scientists say climate change has made the West much warmer and drier in the past 30 years and will continue to make weather more extreme and wildfires more frequent and destructive. The pandemic drove the latest economic downturn that began in early 2020, but a huge wildfire this summer forced evacuations and shut down Nevada casinos and other businesses on the south shore.
Nearby ski resorts are becoming more concerned than ever about seasonable shifts in precipitation that for a century arrived in the form of fluffy snowflakes but now falls more frequently as winter rain.
About 15 million people from around the world typically visit annually to hit the slopes, hike mountain forests and enjoy beaches along 72 miles of shoreline of North America’s largest alpine lake.
It straddles the California-nevada state line at an elevation of 6,200 feet in the high Sierra and holds enough water to cover the entire state of California 14 inches deep.
“On its surface, the Tahoe Basin economy appears strong, powered by billions of dollars in annual tourism spending and skyrocketing real estate values,” the report said.
But a deeper look reveals the local economy “isn’t working for many residents who are struggling to find living wage employment and affordable housing,” it said. “This is accelerating an existing workforce shortage across Tahoe’s service-based economy.”
About two-thirds of Tahoe’s households make less money than it now takes to cover housing and common living expenses — a combined income of at least $92,000 for a working couple with two children, based on a “living wage calculator” used by the Massachusetts Institute of Technology.
Home prices skyrocket
More than half of all workers in the Tahoe area don’t live in the basin, where average home prices have increased 35 percentg since 2020 to an average of $875,000, the new report said.
Those commuters face rising traffic congestion and generate more air pollution and erosion that contribute to loss of clarity of the famed cobalt blue and turquoise waters.
The study counted 53,688 yearround residents, an 11 percent drop from 2010. Part-time residents own more than half of all homes in the basin.
On the bright side, the number of residents with advanced degrees has increased over the past decade.