There is Hope for the Long-Term Rental Market

Tags: housing, impact investment

Some of the best business ideas are born from our struggles- and that is exactly how Landing Locals began. 

In the fall of 2018, Kai and Colin Frolich were asked to house-sit for six weeks while their friends were out of the country. They had recently quit their jobs in San Francisco and had been contemplating leaving the city to reside in a place they loved to spend their free time. At a neighborhood welcome party one of their first nights, everyone they spoke to warned them it was not an easy feat to find housing and they should start the process immediately if they wanted to stay. Having dealt with San Francisco’s limited housing market and high costs, the Frolich’s couldn’t imagine it would be much worse and felt confident they could find something in the six weeks time they had. They were very wrong…

At that welcome party, Colin and Kai were fortunate to have met members of the Mountain Housing Council of Tahoe Truckee (MHC) which led to a series of more formal meetings with those who were dedicated to accelerating housing solutions in the area. In these meetings, they started to unpeel the onion layers of why housing in Tahoe Truckee is such a complex issue. Though there was a good amount of development taking place, it only catered to those with low or high income, what about the missing middle? They repeatedly heard people say, “we are not going to build our way out of this problem” and knew they had to find a way to tap into existing housing stock. After working for Airbnb and consulting for a ski lease management company, Colin knew about the abundance of second homes in the area and was determined to find a way to convert those short-term rentals into long-term ones. The challenge in resort towns is that the housing market is unique with varied units and usage patterns. Some people prefer to use their homes in the summer, some in the winter, some have accessory dwelling units and some rent out through companies like Airbnb full time. 

The Frolich’s studied the 2016 MHC Regional Housing Needs Assessment to learn more about the supply and demand in our community. In a meeting with some of Mountain Housing Council partners, Colin’s extensive knowledge and dedication to the issue impressed Stacy Caldwell, the CEO of the Tahoe Truckee Community Foundation. Stacy had recently returned from a workshop with the Stanford d.school to apply design thinking to find an innovative way to unlock second homes, all funded by the S.H. Cowell Foundation. After commissioning market research on attitudes of second-home-owners, TTCF was interested in testing business approaches to connecting locals to homeowners willing to structure creative leases for locals. Confident in Colin’s experience as a tech entrepreneur and Kai’s background in community impact work, TTCF provided seed funding of $20,000 to turn this concept into a reality.

That $20,000 grant is what kick-started Landing Locals. The Frolichs filed all the necessary paperwork, set-up a business account, and landed status as a B-Corporation with the intent of establishing strong public and private partnerships down the road. That February, Landing Locals presented their business plan at the Mountain Ventures Summit in Mammoth and immediately got to work. They began reaching out to Airbnb owners who hadn’t rented their places out to persuade them on the benefits of renting long-term to our local workforce. Their first match took place a few months later.

The role of Landing Locals is to manage the pre-match process so it is seamless for both the renter and landlord, and then, once the match is made, let the two build a trusted and mutually beneficial relationship that no longer needs the support of the company. If you are an interested landlord, Landing Locals will evaluate your property, take photos, provide a recommendation on rental price and develop your online listing. After that, they will review their database of potential tenants and share those with the landlord. When the two have come to an agreement, an application is completed and both a background and credit check is performed. All of this is done by a team of two full-time employees and two part-time staff members. 

In only three years, with one of them being a pandemic that significantly hindered their inventory, Landing Locals has made around 150 transactions with an average lease of 10-12 months. Throughout this time, they worked with the Town of Truckee to develop a Long-Term Rental Grant Program that provides $3,000 to homeowners that transition their properties from short-term to long-term rentals (minimum of 12-months) for local workforce. Tenants must make no more than 150% of the area median income. MHC also helped facilitate meetings with other mountain communities that led to a multi-market expansion with Landing Locals business operations now in Big Sky, Montana and Telluride, Colorado with more to come. 

When asked about the future of the housing crisis for our community, Colin emphasized the importance of focusing on the 80-150% AMI group since below that level is being supported by current developments. He wants to see these rental incentive programs grow bigger and deed restrictions for local homeowners to sell to local workers. Getting out of this housing crisis requires collaboration from government, nonprofit and private partners. 

TAKE ACTION

• If you have the means to contribute to our Housing Solutions Fund, we are actively seeking donations to put these ideas into action. Any amount can make a difference in solving our housing crisis. 
• If you have time, get involved with the Mountain Housing Council. Attend one of their quarterly meetings or volunteer to help grassroots efforts. Sign-up to receive their newsletter.
• If you have a short-term rental, work with Landing Locals to convert it to a long-term rental and save our local workforce.