Reserved for residents
Resort towns offering incentives for renting housing to local workers may be model for S.F.
Too many short-term rentals and empty homes in Santa Fe? Some mountain resort towns in other states are using a carrot — a very tasty carrot — rather than a stick to convert short-term rentals and empty homes into housing for hundreds of local workers.
Communities around Lake Tahoe and in Ketchum, Idaho, and Summit County, Colo., since 2020 have resorted to offering financial incentives for homeowners to lease short-term rentals or empty homes to local workers.
These incentives generally come to $2,000 per worker housed at least seasonally and more for a long-term lease. A four-bedroom house can generate as much as $24,000 in local government subsidies.
Five jurisdictions are collaborating with Truckee, Calif.,-based Landing Locals, which in 2018 launched a matchmaking service between homeowners and renters as company founders Colin and Kai Frolich themselves couldn’t easily find a home as recent newcomers to Truckee, 12 miles north of Lake Tahoe.
The town of Truckee heard about the Frolichs’ venture. Landing Locals (rebranded as Placemate in mid-February) and Truckee decided to collaborate.
The town added financial incentives to the equation and Landing Locals/Placemate administers the program that launched in October 2020.
Word spread to Tahoe, with South Lake Tahoe bringing Placemate onboard in December 2021 and Placer County along Tahoe’s northwest shore joining in August 2022.
Each community sets its own incentive amounts and requirements for homeowners and tenants. Placemate vets the renters
applying for housing, giving some assurance to homeowners that they will lease to responsible tenants.
Lease to Locals, as the program is called, was a local Tahoe program until Breckenridge and Summit County and Ketchum inquired and signed on.
“We are expanding to other markets,” Colin Frolich said. “Definitely Santa Fe is on our radar. We’ve had 55 markets reach out. Eagle County [Colo.] and Vail are probably next.”
Santa Fe is far larger than these communities but has the same resort worker housing shortage dynamics. Santa Fe has more than 11,000 homes deemed empty (either owner-occupied for only a few months a year or not lived in at all) and more than 1,000 shortterm rental units. Some 15% of Santa Fe homes are empty.
Denver-based Root Policy Research told the City Council’s Quality of Life Committee in early March that, based on Zillow estimates, the average home value in Santa Fe is $520,000. With a family earning the area median income only being able to afford a home priced at about $200,000, this makes for an affordability gap of more than $300,000. Root also determined Santa Fe monthly rents are more than $500 higher than median-income workers can afford.
“I think it would be pretty well-suited for Santa Fe,” Zach Thomas, housing manager in South Lake Tahoe and former resident of Santa Fe, said of Placemate’s program. While in Santa Fe, Thomas worked for the Santa Fe Housing Trust, the city’s Land Use Department and the New Mexico Finance Authority.
Daniel Werwath also believes Santa Fe is well-suited to consider Placemate’s incentivized worker housing concept. Werwath is executive director of New Mexico Inter-Faith Housing, developer of Siler Yard, one of only three affordable housing apartments among the more than 30 Santa Fe apartment projects built or planned in the past four years.
“It would be interesting to see if a model like this could work at scale,” Werwath said. “I think incentives are the way to go with everything. The acuteness of our housing problem, we should explore every option to provide housing for locals to be able to stay here.”
Sam Gerberding, general manager at the Inn of the Governors, embraces the Placemate concept. Some of his employees live in Española or even Bernalillo or Rio Rancho due to housing costs.
“The minute I heard of it, my heart skipped in a good way,” Gerberding said. “The farther away an employee lives, the greater chance they have to call out because of weather or car problems or other things. That is a real issue. An employee with less financial stress is a better employee.”
Creating long-term rentals for workers
Similar to Santa Fe, Lake Tahoe is a second-home haven.
“Santa Fe has a lot of empty homes,” Colin Frolich said.
So does Truckee — more than 50% empty, as Colin and Kai Frolich discovered when, after taking a year off to travel, they decided to relocate to Truckee in 2018 but barely any rentals were available.
“The first thing people said was, ‘You better start looking for housing,’ ” Colin Frolich recalled. “I know there was a lot of housing, but it wasn’t available. Why can’t I find a home in October and move in in November?”
Frolich was a former head of product marketing for Airbnb. He reasoned the short-term rental platform could be replicated for long-term local housing. The Frolichs quickly got to talking with local housing advocates, homeowners and property managers.
“It wasn’t about money. It was fear of change, fear of the unknown,” Frolich said. “[Homeowners said] ‘We’re holding it for the kids. It’s been empty for five years. How do we make sure people don’t trash the place?’ They just needed someone to walk them through the solution.”
Truckee, with a population of 16,000, has housed 210 people who work within the boundaries of the Tahoe-Truckee Unified School District through Lease to Locals since October 2020. Many of those people were commuting an hour or more over mountain passes to get to work.
“A lot of people commute from Reno and Carson City,” said Lynn Baumgartner, an administrative analyst in Truckee’s housing department. “They are commuting from Sierraville,” which is about a half-hour away.
Placer County, Calif., on the northwest shore of Lake Tahoe, has county employees living in Carson City — 40 miles, up and over a pass and halfway around the lake — and Colfax, 64 miles down the mountain toward Sacramento.
“I think it’s been a great success to create this culture shift with homeowners, helping people understand the benefits of renting long term,” said Emily Setzer, principal planner for Placer County.
Santa Fe Public Schools has an estimated 10% of its employees living in Albuquerque, Rio Rancho, Pecos, Española and Las Vegas, N.M., as culled from an employee survey with 588 respondents, district spokesman Cody Dynarski said.
“We had an employee give a resignation because her rent went up to $1,800,” Dynarski said. “The cost of living is one of the biggest, if not biggest, barriers to recruit and retain employees. We’re losing high-quality, veteran teachers.”
The Landing Locals/Placemate concept intrigues Dynarski.
“I mean, anything for people to have affordable housing in Santa Fe, I think is a good idea,” he said. “At this point, anything to help is welcome.”
Since August 2022, Placer County has placed 40 local workers into 17 homes through Lease to Locals and has incentive funding to house 80 people who work within the school district’s boundaries.
“We were familiar with the company and what they were doing in Truckee,” Setzer said. “We were getting suggestions from community members to do it. We had property owners who wanted to do it.”
Sacramento real estate agent Pettit Gilwee on Feb. 1 rented her second-home condo in Truckee to a local worker. Three years ago, she acquired the 750-square-foot, one-bedroom, one-bathroom condo as a weekend getaway.
“I saw I wasn’t using my condo as much as I thought I would,” Gilwee said. “Living in Tahoe for 20 years, I know how challenging it is to find a place to rent. It made sense to rent to a local. I love that Truckee has a vested interest in keeping locals. Those folks are the fabric of the town.”
The communities each have different ways of funding their incentives. South Lake Tahoe is tapping into its federal American Rescue Plan Act funding for the $300,000 in incentives and $200,000 for administration and advertising it has committed so far to Lease to Locals.
Truckee is in the third year of Lease to Locals, starting at $130,000 the first year, $448,000 the second and $500,000 for the current year. Money comes from the general fund designated for housing and, since January 2021, from a ballot measure that increased the transient occupancy tax to fund housing, Baumgartner said.
Summit County and Breckenridge have invested $700,000 since October 2021 from the housing construction fund. Placer County has allocated $405,000 from its transient occupancy tax charged at hotels for its first year in the program.
Taos Ski Valley has a bit of a variation on what Placemate is doing. In the past three or four years, New Mexico’s largest ski resort has created 220 housing units for employees, including 43 through four third-party leases with privately owned homes, said Dawn Boulware, Taos Ski Valley’s vice president of social and environmental responsibility.
Taos Ski Valley has 650 to 750 seasonal employees and 150 full-time employees. They live anywhere between Peñasco and Questa.
“This is really a challenge not only for the ski resort but the whole community,” Boulware said.
Taos city, county and private officials recently banded together as the Taos Housing Partnership, a nonprofit organization that is committed to taking meaningful action to develop housing in and around Taos.
Taos Ski Valley also runs a free employee shuttle from the resort to Taos from 5:30 a.m. to 11:30 p.m. to at least ease the challenges of getting to work and back to town.
“Without the investments we have made, we would be in a different place,” Boulware said.
The 220 employee housing units are mostly dorm-like.
“Now we are looking at what people want or need,” Boulware said. “What we’re seeing is a need for more apartment-like housing for our staff.”
Boulware said housing for seasonal and full-time staff faces the same extreme housing shortage prevalent in the resort world — but old-school tactics are working for many of the longtime workers, who amount to two-thirds of the staff.
“They have secured housing,” Boulware said. “They created relationships in the community. There [are] a lot of creative ways people have [to find housing].”
In Santa Fe, many hotel workers live on the south side or Española or Albuquerque.
“Many staff live multiple people to the house or apartment,” Jeff Mahan, executive director of the Santa Fe Lodgers Association, said in a text. “Housing (then parking) makes for many staff also working multiple jobs to make ends meet, and that is with raising pay rates [well] above national average.”
Converting short-term rentals and empty homes
Placemate’s program, with input from the five communities, has incentives for seasonal leases, essentially five months, and one-year leases with a mix of short-term rentals and/or empty homes.
“We are focusing our program on long-term rentals,” South Lake Tahoe’s Thomas said. “This is really about getting stabilized housing for year-round employees.”
South Lake Tahoe started in December 2021 and banned short-term rentals in residential zones in 2022.
“This program can maybe help incentivize those owners that keep their homes vacant for whatever reason,” Thomas said.
Breckenridge and Summit County, on the other hand, target short-term rentals.
“Your unit has to be a shortterm rental with a license [prior to October 2021, when Breckenridge and Summit County started Leasing to Locals],” said David Rossi, communications director for Summit County. “Landing Locals fits into our goals to really focus on preservation of local housing.”
Breckenridge has a robust housing program with the ski resort providing worker housing, and Summit County has converted three hotels in housing. Yet there was room for Lease to Locals, which has secured housing for 112 adult local workers and 16 children in 56 units.
“The reason Landing Locals was really appealing is for offering incentives to bring renters long-term housing,” Rossi said. “Some of these owners [who] have mid-end and low-end condos would find it reasonable to rent long-term to locals.”
The average lease runs 9.9 months with average rent at $2,393 per unit or $1,371 per bedroom.
Breckenridge/Summit County pay short-term rental owners incentives in the amount of $5,000 for a short-term, one-bedroom unit or $10,000 long-term; $10,000 for a two- or three-bedroom unit seasonal or $20,000 long term; and $11,000 short term for a four-bedroom unit or $22,000 long term.
Renter income limits vary per city. Breckenridge/Summit County and Placer County have no income restrictions, while South Lake Tahoe and Ketchum have qualified renter income limits of $79,688 and $77,552, respectively. Truckee has a household income limit of $103,000.
“There are income restrictions only to make sure that this is not housing for lawyers or doctors,” Frolich said. “We are trying to target this to moderate income.”
Frolich and the communities acknowledge that Lease to Locals is not the total solution to dire shortages in worker housing in resort towns, but these five towns have found housing for some 450 local workers with Lease to Locals.
“We are an arrow in the quiver,” Frolich said.
The incentives are offered for only the first year, but a fair share are continuing with long-term rentals.
“People were showing interest in dipping their toes into the long-term rental market,” Baumgartner said. “More than 50% have continued even when the grant funding is no longer available.”