With the rise in home prices since March of 2020, locals are finding it increasingly difficult to find housing.
The shortage of affordable housing is nothing new in Calaveras County or the state, but the real estate boom during the pandemic has exacerbated the problem.
From February of 2020 to June of 2021, the median sales price of single-family homes in the county increased by 37% from $355,000 to $488,000, according to data from the California Association of Realtors.
During the same period, the unsold inventory index, which estimates the length of time it would take to sell all homes currently listed at current sales rates, decreased from 5.7 months to 2.1 months. In December of 2020, the unsold inventory index reached 1.5 months.
Barry Ward, owner of Barry Ward Realty in Arnold, said that he has never seen inventory so low or overbids so high in his 45 years of working in the county’s real estate market.
“Back in previous markets an overbid on a $250,000 or $300,000 house might have been $25,000 or $30,000 tops,” he said. “Some of these homes now, we list them for $350,000 and we sell them $100,000 higher.”
Ward said that he expected the real estate market to slow down as the novel coronavirus spread and businesses closed last year, but the opposite proved to be the case.
“I kind of realized that these people can’t get on planes, they can’t get on cruise ships, they have to be at a place that they can drive to, and even though they had stay-at-home orders, they still wanted to come up here,” he said. “Prior to COVID, we were at ’04 prices. … Now, we are already up past our peaks before the Great Recession by a good 15% or 20%.”
It took the local real estate market more time than other areas to rebound from the economic crisis in the late 2000s, Ward said.
“For whatever reason, we were just kind of flat here,” he said. “COVID was the catalyst, and what happened last year and now should have probably happened five years ago. I’ve been through four recessions in the last 45 years, and usually we play catch up faster than we did this time.”
Ward said that buyers primarily from the Bay Area with higher incomes have been competing with each other over homes, with some properties receiving as many as 15 offers.
“We get retirees from both the Bay Area and the Valley—people selling their homes and moving up here full time,” he said. “We’re getting families that are able to work remotely now, so they decided it was a good time to come up and either have their kids go to our schools or do Zoom schooling, and then work here and be up here four days a week—we’ve seen a lot of that. And then just the ones that want a weekend getaway.”
Purchasing a home in Calaveras County is still a good deal for buyers from the Bay Area, Ward said.
“We’re a lot cheaper up here even though we’ve gone way up, compared to Tahoe and other areas,” he said.
While property owners are seeing their home values rise, the increase in demand has had some unfortunate consequences for local residents, Ward said.
“If they were renting and trying to buy, some of them are priced out of the market, and you need a place for your locals to live,” he said. “That’s the unfortunate fallout.”
The availability of long-term rentals has declined and rents have been on the rise, Ward said.
“It’s tough to find a rental anywhere,” he said. “In a lot of cases, when there’s an opportunity to raise the rents, they raise the rents way up because of demand.”
The increase in short-term rentals in recent years, especially in the Arnold area, has also taken a toll on housing availability, Ward said.
“I think owners say, ‘I can make a lot more as an Airbnb—why should I rent it full time?’” he said. “It takes that property off the market for a local person that could live there.”
In July of 2017, Airbnb began collecting and remitting transient occupancy tax (TOT) payments directly to the county on behalf of its hosts.
The amount of revenue collected by the county from Airbnbs went from $68,000 in 2017, to $232,000 in 2018, to $612,000 in 2019, to $733,000 in 2020, according to data from the tax collector’s office. Part of the reason for the increase was the rise in TOT from 6% to 12% at the end of 2018. The revenue is placed in the general fund, and currently provides funds for the sheriff’s office, public works, fire districts and the visitor’s bureau.
Short-term rentals play an important role in the local economy, especially in an area with limited hotel rooms, Ward said.
“The increased population here does benefit the market, the restaurants, the stores,” he said. “I think that is your lodging, because when you look at the size of Meadowmont Lodge or Timberline Lodge, there’s not enough there to put a dent in anything, so you have to have these cabins to support the people that want to visit.”
Although the county is in need of more housing, cost is often a prohibitive factor in new home construction. Ward said that while the cost to build a new home is around $350 per square foot, home sale prices usually range from $250 to $325 per square foot.
“You can buy existing homes way below replacement cost,” he said. “But what I’m starting to see now, is our prices have gone up to the point where we’re getting closer to replacement costs, which will encourage building.”
District 3 Supervisor Merita Callaway said that she frequently hears from locals who are having a difficult time finding housing.
“Talking to other counties, it’s the same scenario with (the real estate boom) really hurting the long-term rental market,” she said. “Especially here in Ebbetts Pass, there are also a whole lot of short-term rentals, and that’s also hurting the long-term rental market.”
Callaway said that she also hears from locals that out-of-towners are buying up long-term rentals and converting them to Airbnbs. While some have called on the county to limit short-term rentals, most of the concerns she hears have to do with impacts on neighborhoods like increased noise and traffic.
“I know some people are saying the board should put a limitation on short-term rentals, but it’s hard for me to tell you you can’t do something with your property if you’re allowed to do it,” she said. “The other question I’d ask is how are we going to enforce it?”
Callaway pointed out that formalized homeowner’s associations (HOAs) have the ability to limit or ban short-term rentals, and that restricting them does not necessarily mean they would be available for long-term rentals, especially in a booming real estate market.
“Even if you put a cap on it, which the subdivision could do if they choose, that doesn’t mean that they’d be available, because property owners might want to come up and use it for the holidays or ski season or what have you,” she said. “It’s a difficult situation almost everywhere.”
Karen Munoz, of Arnold, is one one many locals who have had difficulty securing housing in recent years. Beginning last year, she spent eight months looking for a rental, staying at a friend’s cabin while she searched.
While she finally found a rental and secured a one-year lease, she was notified by the owner in June that they wanted to sell.
“They wanted to sell because the market is so hot right now,” Munoz said. “So, I was out looking for a place again.”
With next to nothing available on the market, especially a place that would allow her to have a dog, Munoz approached a family friend about renting their Airbnb. The owner was making $2,000 a month renting out the property, which was out of her price range.
Luckily, the owner agreed to rent the house to Munoz full time, while continuing to rent out the upper portion on occasion to make up for lost income.
“Two weekends a month they rent out the top portion,” she said. “I pay $1,200, and then they make up that $800 in the rent each month.”
Munoz said that she knows other locals who are having a difficult time in the rental market, and she’s grateful to have a place.
“It’s kind of a different situation, but I had no choice,” she said. “It’s impossible to find rentals here. There’s people from the Bay Area that are buying up these cabins for ridiculous amounts, and then they want to turn them into Airbnbs. They want $3,000 to $4,000 a month, and it’s just impossible for us residents who live here and try to work to find housing. It’s just not around.”
For the past two years, Munoz has made a living cleaning vacation rentals, mostly Airbnbs, in the Arnold area. She said she has seen a rise in the number of short-term rentals in the town recently.
“I have so much work, I can barely keep up, and I rarely have a day off,” she said. “That’s a good thing, but you have to have a place to live with all this work.”
While Munoz would like to purchase a home, right now she is priced out of the market.
“It’s impossible to buy something unless you are a millionaire,” she said. “It’s got to crash at some point, and then I’ve got to jump on it when that happens.”
Munoz was ultimately able to find housing in a difficult market, but that hasn’t been the case for everyone.
Calaveras County’s latest point-in-time count in 2019 identified 186 individuals experiencing homelessness in the county, which was an 81% increase from the prior year.
The Angels Camp-based nonprofit Sierra Hope offers multiple programs for county residents experiencing homelessness or at risk of experiencing homelessness. Sierra Hope Executive Director Jerry Cadotte said that requests for services have increased over the past year.
“There’s always been a lot of need, but I think with the pandemic certainly that there have been increases,” he said. “We’re hearing from people who say that the place they’ve been renting has been sold, and they’ve been given a 60-day notice to vacate. … They may have been there for years, and it’s been sold so they are having to find another place and not able to find something.”
Cadotte said that the state’s eviction moratorium during the pandemic has led to less turnover in long-term rentals, which has also had an impact on the availability of rentals for those who are looking.
Among its programs, Sierra Hope offers a rapid rehousing program for those experiencing homelessness.
“It’s for people who are homeless, to assist them in getting into permanent housing, and we can pay deposits and provide some rental subsidies and case management to help them get back on their feet,” he said. “We have some good funding for that, but people aren’t able to find places to rent.”
While 29 households were enrolled in the program in 2020, only 16 of them found housing, Cadotte said.
Sierra Hope’s permanent supportive housing program offers housing and case management for those that are experiencing homelessness and unable to afford housing because of a physical or mental disability. The original grant for the program allowed Sierra Hope to lease six apartments.
“At one time we had four here in Calaveras County and two in Sonora,” Cadotte said. “We have lost some of those units, and because of the tight rental market, we weren’t able to find replacements for them. Eventually, because we weren’t able to find replacements for some of the apartments that we lost, our grant was reduced, and now the grant provides for four units. We have three here in Calaveras County, and we still have one in Sonora.”
Cadotte said many factors besides the eviction moratorium have contributed to the limited rental market.
“I’ve heard a lot of houses that were available for rent are being sold,” he said. “We’ve got another real estate boom going on, and people are coming in and looking at places to rent and making offers to buy them, or owners are deciding that now’s a good time to sell, and so they’re selling those homes rather than renting them out. We also see a lot of rentals becoming vacation rentals rather than rentals available for permanent housing. All of this has made an already difficult rental market even worse.”
Sierra Hope is a local partner for the state’s emergency rent relief program—CA COVID-19 Rent Relief—which offers funds for renters behind on their rent due to COVID-19 and landlords who have lost income during the pandemic.
“They can qualify for back rental payments all the way to March of 2020,” Cadotte said. “If a tenant applies for that, an email is sent to the landlord and they can submit a corresponding application. It’s a great program for landlords, because a lot of them are hurting. Originally, it was paying only 80% of the back rent that was due, but they’ve just changed that and are actually paying 100% of the rent that is due.”
Those interested in learning more about the program can visit housingiskey.com or call (833) 430-2122. Sierra Hope has also hired an outreach worker to promote the program and assist people in filling out the online application.
“There was over $3 million allocated just for Calaveras County to help tenants and landlords here,” Cadotte said. “The sooner people get in the better chance that they’re going to have of getting the help they need.”
For those experiencing homelessness or at risk of experiencing homelessness, contacting county health and human services or Sierra Hope and completing an intake is a good place to start, Cadotte said.
“Unfortunately, a lot of people are in dire need and they’re looking for housing now, and generally the answer is, ‘No, I’m sorry, but we just don’t have the resources.’ We don’t have an emergency shelter in Calaveras County. We have money to help people to get into housing, but the housing itself just isn’t there.”
Cadotte said that many barriers contribute to the lack of development of affordable housing in Calaveras County.
“There needs to be developers willing to come here and develop, there needs to be community support to accept them, and political support,” he said. “I think all of those right now are obstacles.”
The U.S. Department of Housing and Urban Development defines a household as cost-burdened, meaning that it may have trouble affording basic necessities, if it spends more than 30% of its income on housing.
In Calaveras County, about 47% of homeowners with a mortgage spend more than 30% of their income on housing, according to 2019 estimates from the census bureau. For homeowners without a mortgage, the number is about 17%.
Almost half of renters in Calaveras County pay 35% or more of their income on housing, according to the 2019 census bureau estimates.
The state requires counties to adequately plan to meet existing and projected housing needs across all economic segments of the community. As part of this, counties are required to adopt housing elements in their general plans to identify housing needs, set goals and objectives to meet those needs, and define policies and programs to achieve their goals and objectives.
In order to meet existing and projected needs, 1,340 units would have to be built in the county between 2019 and 2027, according to the county’s current housing element, which was adopted in 2019.
At the end of 2019, the county hired Lee Kimball as housing and community programs manager for health and human services, a new position created to address housing issues in a more efficient and integrated way.
For the past year and a half, Kimball has been studying data, identifying needs and funding sources, and working towards solutions for Calaveras County.
Some important factors in Calaveras County when it comes to housing are the disproportionate number of vacant homes, the large senior population, large amounts of land and difficulties with attracting for-profit developers, Kimball said.
“We are disproportionately high in empty houses,” she said. “We have a much larger number of people here who own homes rather than rent homes, but we still don’t have enough rental property, when you only have 2% of your houses available for rent.”
About 40% of Calaveras County’s roughly 28,000 housing units are vacant, meaning that they do not serve as a primary residence, according to a 2019 estimate from the census bureau. Of occupied housing units, about 78% are owner-occupied, while about 22% are renter-occupied.
For-profit developers can make more profit elsewhere and have little incentive to build in the county, Kimball said.
“Calaveras County, much like most rural communities, has a very, very tough time attracting for-profit developers,” she said. “And then you add to it that California has put on a multitude of layers on zoning, and codes, and ordinances—and there’s more coming for wildfire safety—that make it more expensive to build.”
In recent years, the county has amended ordinances and offered other incentives to encourage development, with little success.
“We’re looking at our ordinances,” Kimball said. “We’re looking at funding and strategies that will incrementally, piece by piece, change this up.”
The state’s funding opportunities are often geared towards urban areas, and finding a way to expand housing in Calaveras County will require creative solutions, Kimball said.
Kimball sees the building of accessory-dwelling units (ADUs)—separate housing units on the same land as a detached house—as part of the solution for the county.
In recent years, the state has passed laws to encourage the building of ADUs, some of which restrict local governments and HOAs from disallowing homeowners to build ADUs on their properties as long as they are compliant with setback requirements and other regulations.
“If you have everything on there that’s OK to go, the county can’t zone against it and a neighborhood can’t prohibit it,” Kimball said.
Building ADUs would not only increase housing stock, it could provide a passive income for seniors with limited financial resources, Kimball said. It could also provide a place for seniors to live on the properties of family members.
About 28% of county residents are 65 or older, according to a 2019 census bureau estimate, and many are on fixed incomes.
The county recently secured funding from the California Department of Housing and Community Development for a new program to assist county residents in building ADUs.
“We came up with a regional project that is kind of an innovative, rural model, of addressing housing shortages,” Kimball said. “We are going to be working to create supportive information and technical assistance for families who would like to put a second home on their property, including how to finance them, what is the process, and what are some questions to ask a contractor and engineer if you have to do site preparation.”
The program is a joint project between Calaveras, Amador, Nevada and Mariposa counties, and the partnership has allowed the four small counties to pool their resources, Kimball said. Calaveras County’s portion of the funding is about $200,000.
“We’ll have a website at the end of the year where people can punch in, and they can get little by little the information they need, and a person who could help them understand the process to explore whether they would like to add a second home on their property,” Kimball said. “Even if we only do five to 12 of these a year over five years, it’s the same as if we were able to attract two apartment complexes. And quite honestly, Calaveras is beautiful, and I think building it this way will preserve the beauty of the neighborhoods in the remote areas instead of making it urbanized.”
Kimball is also looking at investment housing and its impact on the community.
“These are not residents of our community, but they are landowners in our community,” she said. “Could we find landlord incentives that would provide a means for some of these homes to become rentals?”
Lack of affordable housing is a challenge across the county, the state and the country, Kimball said, and Calaveras County will have to find creative solutions to address the problem.
“We need folks out there designing programs that fit rural communities—we’re not underdeveloped and going to grow up to become Los Angeles,” she said. “We can design programs that really fit us better, and then we can go out, and keep our fingers crossed, and work very hard, and hope to get a solution.”