Work-Anywhere Shift Has Wealthy Tech Crowd Invading Lake Tahoe
(Bloomberg) -- The vibe is pre-Covid San Francisco: Airpods, electric scooters, coffee-shop coworking and cash offers for million-dollar homes.
In fact, the scene is unfolding more than three hours to the northeast, on the shores of sparkling Lake Tahoe.
With many companies from the tech-heavy Bay Area embracing remote work, the towns surrounding the sprawling freshwater lake are becoming a refuge for San Francisco and Silicon Valley’s elite. In a blink, the migration has transformed the region — to the dismay of some locals who worry Tahoe could become another crowded, unaffordable playground for the rich.
Tech-company workers made up about a third of area homebuyers identified by their employment history in one analysis. The real estate market is sizzling, with home sales in South Lake Tahoe almost doubling over the summer compared with a year earlier, and rising prices making it more difficult for locals to purchase property. Bay Area transplants also are crowding into a co-working business where they once were a distinct minority.
The moves show how the pandemic may reshape the way people work and live — particularly those who have the means to weather the crisis comfortably. Across the U.S., urbanites have escaped to more spacious surroundings during coronavirus lockdowns, driving up home sales in areas such as New York’s Hamptons or the Connecticut suburbs. But in pricey California, the trend may hold up longer as companies grow more lenient and workers opt for cheaper lifestyles.
Nate Carrier, a product manager at Google, decamped to his Tahoe-area cabin in March with his then-fiancee, LeAnna, expecting to stay for a couple of weeks. As weeks turned into months, they moved out of their two-bedroom apartment in Silicon Valley’s Menlo Park, put their stuff in storage, eloped, and shacked up in their home in the town of Truckee for the foreseeable future.
“We hike, play tennis, paddleboard, and spend most of our free time working on our cabin renovation,” Carrier said. “A lot of coworkers are jealous. I don’t ever take calls outside because I don’t want to draw attention to where I live.”
Though Carrier doesn’t know anyone personally who followed him up I-80, several of his coworkers have also made the move. Over the past few months, at least six Google employees have bought homes in Truckee, a small town with a population of about 16,700, according to research from Atlasa, a data-driven real estate brokerage. At least six more have purchased property in El Dorado County, the location of the tourist area of South Lake Tahoe. Google has said workers don’t need to return to their offices until at least summer 2021.
It’s similar across the industry. Atlasa’s analysis identified the employers of 363 of the 625 homebuyers in Truckee and El Dorado County from June through late August and found that about a third — 126 — of the purchasers work in tech, including 10 from Facebook and nine from Apple. The migration will change Tahoe’s demographics, said Atlasa founder and CEO Deniz Kahramaner.
“It will reflect the affluent counterpart of the Bay Area, which is kind of absurd to say, because the Bay Area is already affluent,” said Kahramaner. “The top 30% of the top 1% kind of thing.”
In South Lake Tahoe, “July was bananas” for the real estate market, said Sharon Kerrigan, executive vice president of the local realtors association. Including condos and townhomes, a total of 372 properties sold from June to August, up from 197 in the same period last year. The lakeside community of Tahoe Keys saw its median home price jump almost 15% in the 12 months to August, to $976,000.
“Inventory is very low, we are seeing multiple offers, cash offers, sight-unseen offers,” said Ginger Nicolay-Davis, a real estate broker and the owner of Lake Tahoe Properties. “It’s great, but you also worry: Can a market like this sustain that?”
While many buyers typically purchase homes to rent out as vacation property, they now are often using them as second primary residences, Nicolay-Davis said. She has seen a tangential effect first-hand: Her sixth-grader had seven new students in his class this year.
The Friday before Labor Day, protesters stood at a roundabout on the route Bay Area travelers take into South Lake Tahoe. About a dozen were gathered holding signs reading “Stop littering,” and “Flatlanders = noise, traffic, garbage, pollution.”
Tahoe local Josh Lease has helped organize the demonstrations. “The Bay Area techies are definitely relocating up here,” he said, adding that he's hoping there will be some response from local government to deal with increased traffic and trash.
“The morale for locals is at an all-time low right now,” said 41-year-old Lisa Utzig Schafer, who has lived in South Lake Tahoe since she was 5 years old and owns a small retail shop there. “We’re hoping for a really bad winter so all these people who are buying houses will realize how tough it is living here year round, and then they’ll go move.”
Still, there are benefits. The new crowd is more diverse, a welcome change, she said. And it’s been good for her store, which sells Tahoe souvenirs, as well as jewelry and local art. While it has only been open half of its normal hours because of Covid-19, it’s made more than two-thirds of its typical earnings. This past Labor Day was even better than the year before, she said.
Down the street from Schafer’s shop is Tahoe Bike Company, where employee Ed Weber said he had the busiest season he can remember.
“I’ve sold quite a few electric bikes this summer,” he said. But while the influx has been good for business, he’s having trouble finding a new home because the market is crowded with wealthy cash buyers.
The region has also been a place of refuge for Bay Area residents fleeing fires and smoke-filled air, said David Orr, co-owner of Cowork Tahoe, a shared office in South Lake Tahoe, who has let evacuees use the workspace. Tahoe’s air has been clouded with the haze blanketing the West but has been less affected by California’s record-setting blazes — for now.
“We’re all very on edge about fire right now,” Orr said. “That’s always been a big concern for Tahoe; we’ve had some pretty catastrophic fires.”
Orr has seen the broader shift to more permanent transplants coming to the area. Before March, his 140-odd clients at Cowork Tahoe were about 80% locals and 20% Bay Area folks who used the space part-time. Since he reopened in June from a pandemic shutdown, the make-up is more like 50% locals and 50% tech workers, many of whom have just recently bought property.
See also: Remote Work Sends San Francisco Rents Plunging
For South Lake Tahoe mayor Jason Collin, having Bay Area transplants settle down full-time is preferable to having investor-owned rentals sit vacant. Voters recently passed a measure that would ban short-term rentals in much of the city starting next year, intending to address the housing shortage and bring down rental costs for the local workforce. Still, he acknowledged that out-of-towners may instead gain the advantage.
“To buy a $600,000 or $800,000 house is probably not in the cards for a lot of locals,” Collins said.
Further north, Truckee mayor David Polivy is less convinced that any of these trends will stick. “Part of my daily job is separating the fear and the hearsay and the rumors,” he said: No, 500 new students have not enrolled in Truckee’s school district; it’s more like 60, which is typical.
Regardless, in budget and policy conversations, he’s preparing for population growth, debating whether to fund more police officers or increase road capacity — issues that will have to be addressed once it’s clearer whether this is a short-term pandemic trend or a permanent shift in lifestyles for people fleeing bigger metropolitan areas.
“I think half of the people are committed and saying ‘Hey, we’re moving here,’” Orr said of users of his coworking space. “And then the other half are like, ‘I’m taking a break from the Bay Area. I plan on going back there at some point.’”
Carrier and his wife are in the latter group. The internet in their neighborhood is slow, the cabin doesn’t get cell reception, and both will welcome a return to the office eventually. Besides, they’re paying off their Truckee mortgage and still saving $2,800 a month on would-be Mountain View rent.
“We can put that money toward a bigger place when we get home,” he said. They should be able to afford more -- Menlo Park rents have dropped 15.9% from last year, according to a Zumper report.
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