Jackie Krentzman is a Bay Area-based writer and editor.

Even months after Wendy Warswick moved into South Lake Tahoe’s Sugar Pine Village, she still wakes up smiling. After 20 years of living in a dilapidated apartment that strained her budget, the casino clerk marveled that she was not only saving $400 a month in rent but had twice the space.

“I can’t believe my good fortune,” she said. “I am finally living in a clean apartment where everything works, and I can sleep because the apartment is so well insulated from noise. Plus, I can take all my possessions out of storage which had been crammed to the rafters.”

The 248-unit Sugar Pine Village is the largest affordable housing complex ever entitled in South Lake Tahoe. Sixty-eight units opened in October, with another 60 units expected to welcome tenants this coming summer. The next phase for Sugar Pine Village is currently closing financing, with construction expected to begin this summer. Both the city and state have already chipped in millions of dollars, along with Redstone and Citibank.

The project is one of many such developments that have sprung up in the famed tourist mecca in recent years. But those flocks of visitors are straining the city’s already limited housing stock, which is sharply controlled by the Tahoe Regional Planning Agency’s environmental protection growth limits. Visitors own or rent a significant percent of those homes, jacking up prices for the remaining housing stock.

The city for decades has capped the number of short-term rentals in residential neighborhoods to ensure units remain available for local workers and their families. Despite these efforts, the cost of a single-family home nearly tripled from 2012 to 2021. This housing squeeze has accelerated even more over the last few years, due mostly to COVID-19.

When the pandemic hit in 2020, South Lake Tahoe saw an influx of white-collar workers freed from downtown office commutes and high housing prices. Home prices and rent soared by double digits, displacing many longtime residents and seasonal workers who could no longer afford rent — including 7% of renters. The city estimates that residents, earning an average income, buying a house today would need to set aside 85% of their income for monthly mortgage payments or 37% of their income for monthly rent.

“With Covid, we saw a lot of those folks that own second homes move up here on a temporary or interim basis when remote working became more open,” said City Manager Joe Irvin. “We also saw some of our rental inventory get absorbed by those folks that had jobs that allowed that flexible work option who would come here periodically to work and recreate.”

With approximately 1,000 people on waiting lists for affordable housing — about five percent of the city’s total population — South Lake Tahoe has had to address the housing crunch in several ways. This includes increasingly common city-backed projects, such as a 75-unit affordable housing development on city-owned land. The city council has authorized a $564,073 pre-development loan for the project and is actively seeking other funding.

The city is also working to increase housing options by easing the process for accessory dwelling units (ADUs). It partnered with Workbench ADUs to design and purchase three pre-approved ADU designs that homeowners can use at no cost, saving them significant money and time.

“The idea is to eliminate a significant barrier of building an ADU on your property,” said Zach Thomas, the city’s director of development services. “By not needing to pay an architect to design the plan, the property owner can go straight to hiring a contractor. Plus, as the plan is pre-approved by the city, they don’t have to go through the design permitting process.”

But the city is also trying some novel strategies. Lease to Locals incentivizes property owners with a grant of up to $4,500 per renter, up to $22,500 if they house five or more people.

“The biggest challenge for any city in California is greenlighting moderate-income housing, as most grants are for low-income units,” said Thomas.

Another challenge for South Lake Tahoe is the hundreds of residents living in motels and hotels. The city’s new Rental Assistance Program provides up to $2,000 security deposit assistance to help people secure permanent housing.

“Many folks can afford the $1,500 in monthly rent, but not a $2,000 security deposit,” Thomas said. “It’s been very successful, and the landlords are receptive. They like working with the city as a partner because they are assured of the deposit, plus the city provides an extra layer of someone working with the tenants.”

All these efforts have put the city on pace to exceed its sixth cycle California housing element target and earned it the state’s prohousing designation.

“The city recognizes the ongoing need for housing at all income levels, including affordable,” said Mayor Tamara Wallace. “As such, the city has developed a robust set of programs to deliver quality housing to our community, including the construction of Sugar Pine Village.”

When completed, Sugar Pine Village far and away will make the biggest dent in the roughly 1,000 affordable units the city requires. Demand is high, with 600 applicants for the first 68 units. As one of the lucky few who won the housing lottery, Warswick said she was stunned by her life-changing fortune.

“A huge financial burden is off my shoulders,” she said. “In the prior building, my entire last paycheck of the month, plus some of the first paycheck had to go to rent. With the reduced stress I am feeling healthier — I’ve lost 10 pounds, and my [diabetes] numbers have improved. And the awesomeness of this new place has just given me a better outlook on life. I am so thankful for everyone who had a hand in making Sugar Pine Village possible.”