HOUSING
Still , the other six California metro markets included in that 2021 report ranked even lower . So for those migrating in-state , Sacramento is still a relative draw . Until now there ’ s been little indication that the run on homes is hurting local companies ’ ability to hire and retain employees , say business leaders . But if prices keep rising at the record-breaking pace , all that could change and put business investments at risk .
Housing boom , Tahoe version
Consider the all-important manufacturing sector . “ Manufacturers who are looking to put bolts in the ground to site large massscale production operations — one of the bottom lines that they look at in terms of cost and feasibility is housing costs for the workers ,” says Gino DiCaro , senior vice president at the Sacramento-based California Manufacturers & Technology Association . The group ’ s data shows that California , which has 13 percent of the country ’ s population , got just 1 percent of investments of at least $ 50 million in manufacturing facilities for production in 2020 . “ The more housing costs increase , the more difficult it will be to grow here , stay here , retain and recruit workers here in Sacramento ,” DiCaro says .
That future is now in the north Tahoe-Truckee region . Between November 2019 and November 2021 , the median price increase for a single-family home across six jurisdictions was 53 percent — from about $ 707,000 to $ 1.1 million , according to Tahoe Sierra Board of Realtors ’ data analyzed by Comstock ’ s .
“ We lost affordable housing some time ago , but now we ’ ve even lost any kind of middle-income professional housing ,” says Cindy Gustafson , who represents the area on Placer County ’ s board of supervisors . Restaurants can ’ t stay open the days they want because their employees can ’ t afford to live nearby . One business owner bought at least two trailer parks to house his staff and is helping employees with down payments ; others bought homes to rent back to their employees , Gustafson says . “ What I ’ m hearing from the business community , especially in North Lake Tahoe , is that this is a dire problem that employees cannot live anywhere near where they work .”
How we got here
When the pandemic hit , it looked like the start of a home price slump , says Erin Stumpf , Coldwell Banker Realty agent
“ We lost affordable housing some time ago , but now we ’ ve even lost any kind of middle-income professional housing .”
CINDY GUSTAFSON Supervisor , Placer County on the north Tahoe-Truckee housing market
and president of the Sacramento Association of Realtors . Instead , prices shot up as sellers took their houses off the market because they didn ’ t want people in their homes . Buyers proliferated as people realized they wanted more space , maybe a yard and an office if they were going to work from home , she says .
Bay Area migration added to the mix , though it ’ s hard to say how much . About 20,000 households moved from the Bay Area to the Sacramento region in 2020 , according to an analysis of U . S . Postal Service data by the Sacramento Business Review . There ’ s no data on how many of those also bought homes or what percentage of the region ’ s buyers they made up , and real estate pros don ’ t agree . Tim Collom , Realtor at the Tim Collom Realtor Group , says close to half of his firm ’ s 270 transactions in 2020 involved buyers from the Bay Area . But Rosanna Garcia , a real estate agent at Garcia Realty and a Sacramento Association of Realtors board of directors member , says 95 percent of buyers she ’ s worked with have been local . Whatever their number , Bay Area buyers bring with them practices that work in the Bay Area — like offers with no contingencies — which puts pressure on local buyers to do the same , Stumpf says . Mortgage rates that hit an all-time low in April 2021 added rocket fuel to the mix .
Beyond those , longerterm issues have kept prices high . Projects get slowed down by the construction labor shortage , and approvals for land development take years because they often need sign-offs from three levels of government ( federal , state and local ) or face NIMBY ( not in my backyard ) opposition and environmental lawsuits , says Michael Strech , president and CEO of North State Building Industry Association . Development impact fees , which are used to build the infrastructure , parks and schools needed when a housing project goes in , add $ 95,000 to the cost of each new home built in the Sacramento region — 18 percent of the house price , compared with 12 percent in the Central Valley , according to a May 2021 study for the NSBIA . ( Seven Central Valley jurisdictions were included in the study , including Clovis , Fresno and Manteca .) “ There ’ s a ton of demand and a lot of people that want homes , and that ’ s great for our business . But at the same time , it ’ s never been harder to build a house ,” says Aren Bazzocco , Sacramento division president for home builder Taylor Morrison .
44 comstocksmag . com | February 2022