Report: Pandemic shows need for Tahoe to expand economy
RENO, Nev. — The COVID19 pandemic helped expose the growing 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 better diversify Tahoe’s economy, build more affordable housing and utilize an increasingly skilled work force.
“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 now accounts for more than 60% of Lake Tahoe’s $5 billion regional economy — up from 40% in 2010, according to the nonprofit center’s research.
“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 concluded. “And the risks are mounting due to economic downturns, worsening wildfires, and changing weather patterns.”
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 blaze this summer forced evacuations and shut down Nevada casinos and other businesses on the south shore.
About 15 million people typically visit annually.
“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.
Over half of all workers in the Tahoe area don’t live in the basin, where average home prices have increased 35% since 2020 to an average of $875,000, the report says. Those commuters face rising traffic congestion and generate more air pollution and erosion that contribute to loss of clarity of the famed waters.
The study counted 53,688 yearround residents, an 11% drop from 2010.