'$100M?!' Tech Billionaires Are Driving Up Property Prices Around Lake Tahoe (forbes.com) 59
Slashdot has been covering tech wealth's transformation of the California and Nevada communities around America's sixth-largest lake. (See "'We're Running Out of Homes for Sale', Lake Tahoe Brokers Say As Tech Workers Flee Bay Area " and "A Wave of Tech Workers Tranformed Tahoe Into a High-Priced 'Zoom-Town'.")
This week Forbes reported that — even though it's 230 miles from Silicon Valley — a waterside property in Lake Tahoe was listed for $100 million, "and more owners are listing their luxury pads at exorbitant prices" (with more than 30% of the region's new buyers from the tech industry).
"Many locals are fleeing the area because of high prices..." Record-breaking real estate acquisitions of lakefront property in Tahoe City on the California side and Incline Village on the Nevada side have been driven by tech billionaires from nearby Silicon Valley. Once Mark Zuckerberg purchased his massive lakefront estate in 2018 for $59 million, Google, Apple, and other tech execs followed, with over 30% of new buyers being from the tech industry.
Recently billionaire Larry Ellison purchased the 16-acre waterfront Hyatt resort in the Incline Village area for $345 million. It is rumored this will ultimately become a new Sensei Resort. Ellison also purchased the famed Cal Neva Lodge on the North Shore for $36 million despite much-delayed plans to convert it into a Nobu Hotel. Ellison reportedly owns a 7.6-acre compound in the area within walking distance to his new hotels. And another California investor purchased the Tahoe Biltmore Hotel for $56 million in the popular Crystal Bay area and plans to convert it into the Lake Tahoe Luxury Resort and Residences....
According to Bill Dietz, President of Tahoe Luxury Properties, "Due to the proximity of the wealth-laden Silicon Valley, Lake Tahoe is a convenient target for billionaires.... The lenient tax climate and sand beaches of the Nevada side provide a distinct draw to that side of the lake for the super rich," he adds. "Incline Village and Crystal Bay on the north shore of the NV side showcases some of the most expensive and elaborate estates anywhere in the world. Millionaire row becomes billionaire row on Lakeshore Blvd in Incline Village."
This week Forbes reported that — even though it's 230 miles from Silicon Valley — a waterside property in Lake Tahoe was listed for $100 million, "and more owners are listing their luxury pads at exorbitant prices" (with more than 30% of the region's new buyers from the tech industry).
"Many locals are fleeing the area because of high prices..." Record-breaking real estate acquisitions of lakefront property in Tahoe City on the California side and Incline Village on the Nevada side have been driven by tech billionaires from nearby Silicon Valley. Once Mark Zuckerberg purchased his massive lakefront estate in 2018 for $59 million, Google, Apple, and other tech execs followed, with over 30% of new buyers being from the tech industry.
Recently billionaire Larry Ellison purchased the 16-acre waterfront Hyatt resort in the Incline Village area for $345 million. It is rumored this will ultimately become a new Sensei Resort. Ellison also purchased the famed Cal Neva Lodge on the North Shore for $36 million despite much-delayed plans to convert it into a Nobu Hotel. Ellison reportedly owns a 7.6-acre compound in the area within walking distance to his new hotels. And another California investor purchased the Tahoe Biltmore Hotel for $56 million in the popular Crystal Bay area and plans to convert it into the Lake Tahoe Luxury Resort and Residences....
According to Bill Dietz, President of Tahoe Luxury Properties, "Due to the proximity of the wealth-laden Silicon Valley, Lake Tahoe is a convenient target for billionaires.... The lenient tax climate and sand beaches of the Nevada side provide a distinct draw to that side of the lake for the super rich," he adds. "Incline Village and Crystal Bay on the north shore of the NV side showcases some of the most expensive and elaborate estates anywhere in the world. Millionaire row becomes billionaire row on Lakeshore Blvd in Incline Village."
Not Surprising (Score:3)
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I thought Lake Tahoe, (the lake), was dying. Silting up or something.
Not quite. Tahoe used to be famous for having the world's clearest water. You could see things over 100 feet down. Clarity has been decreasing over the years. The typically-cited culprit is fertilizer getting into the watershed which leads to algae growth. The EPA says [epa.gov] a bigger reason is fine particles getting into the lake, although I'm not clear on the mechanism.
People have been raising the issue since before I moved to CA and I think there's been some progress reducing runoff and stabilizing the situatio
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Honestly, I would detest living with a bunch of Californidiots.
You can scream "sour grapes" all day long, these properties were never affordable to average people even before the tech billionaires started jacking up the prices.
Politics is also a completely different game for people who are that wealthy. They're not concerned about things like the price of gas or groceries, as the commodities of daily life will never be outside of their budgets. Their political concerns are generally about how policy will affect their businesses, and they will lobby with vast sums of
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Who cares if Lake Tahoe is an overpriced "zoom town"? Go live somewhere else. Honestly, I would detest living with a bunch of Californidiots.
The wealthy of California are just like the wealthy of anywhere. It's a big club, and you're not in it. They might let you provide them with services if you are sufficiently washed, however.
Re: So many nice places... (Score:2)
On the other hand: (Score:4, Informative)
https://www.bloomberg.com/news... [bloomberg.com]
https://www.forbes.com/sites/b... [forbes.com]
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Fewer sold != lower price.
Artificial scarcity of property (Score:5, Interesting)
So people can fight over the ones already there and spend 30 years paying mortgage interest on a concrete/wooden box that some dude threw up in the 60's or 70's and spend their whole lives working to pay the thing off. They are really pulling the wool over our eyes by booting on the artificial scarcity or property. In the States its worse again because you have high property tax. Even after paying the damned thing off you're still basically just renting it from the government.
This is why there are housing shortages all over the world. Green agenda, no more development, erode peoples purchasing power. Why do we put up with this? Planning & zoning laws that trickled in over 100 or so years are now being used against all of us to make busy fools out of all of us.
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There will always have to be a balance between preserving natural beauty and building stuff. It sounds like some of these estates are huge, and the nature on and around them is part of the attraction.
Someone noticed that it's not such a bad commute from SV, especially if you can fly, and now it's becoming a weekend pad for rich people.
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There will always have to be a balance between preserving natural beauty and building stuff.
No, it's always the balance between preserving property values and building stuff. If they can build stuff and still profit, nature be damned. Where I live in Florida, during the housing boom prior to the Great Recession, I watched developers build a high-end neighborhood in a literal swamp.
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Agree. I will vote for you when you run for office on this "build more houses" platform.
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Re:Artificial scarcity of property (Score:5, Insightful)
The vast majority of Californians don't care if a cabin at Tahoe is affordable or not. Most of us would prefer to tear down the ones that are already there.
Visit nature, enjoy it, "take nothing but pictures, leave nothing but footprints." No need to pollute Tahoe with cabins.
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How do you expect people to visit Tahoe if there's nowhere around there to sleep at night?
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That has nothing to do with multi-million dollar houses, but they can sleep at Reno. Plenty of hotel rooms available.
Or camp in the woods. Sleep in nature like God intended.
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Note that demand for properties is not evenly distributed, and what makes a place desirable is largely what is around it, not just naturally. You can't let people rapidly build up a place and not provide certain services, many of which require investments calculated in decades and take time to install. When the people move on, be it because you plastered the landscape with suburban sprawl or because somewhere else has better jobs or schools, lower property taxes or whatever, the people who stay are saddled
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I think ever selling such land into private ownership in the first place was a big mistake. Now it's spoiled yet the number of person-hours actually enjoyed there is small. The land is given over to serving largely as a bank, a store of value.
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I have never been to Lake Tahoe, but [...]
Obviously. Your pave-the-world-and-build-MOAR knee-jerk reaction is ridiculous. Lake Tahoe is a clear-blue lake in a forest near the top of a mountain. Small towns and massive ski resorts.
Your opinion as to what people far from you should do is irrelevant.
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This is true. Zoning laws were originally designed to keep black families out of white neighborhoods [washingtonpost.com], and now they are being used by selfish NIMBYs to artificially restrict housing supply in order to drive up home prices.
By simply lifting the regulations against medium height buildings (4-6 stories), the minim
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I have never been to Lake Tahoe...
Make a point of it. It's one of the highlights of California and the Sierra Nevada. Skiing with the lake in the background is sublime.
...but a quick look on openstreetmap shows large swathes of undeveloped land around it. Like so many other places in the world the politicians most likely put a kibosh on the building of new houses in those areas.
No doubt there's some NIMBYism going on. It's not all insane though. Tahoe is in a mountain valley. It's difficult to build houses and roads away from the lake shore. The terrain gets very steep, very fast. This results in terrible traffic jams on the roads around the lake. It's not implausible to say lakeshore development really is at capacity.
In addition there's wildfire is
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The thing is those "people who grew up in the 60s" had no qualms about "nature" or "the character of the neighborhood" when they were tearing down cherry orchards to make their homes.
However they can now spend their political clout to make sure those cabins bring a huge premium for their effort to be "lucky to be born earlier".
There is a lot of potential to spread to unused land, or go vertical. But forget about it. Even adding ADUs in huge lots were allowed after too much effort.
Supply and demand (Score:5, Interesting)
Rich people are always going to create a safe space for themselves. The only challenge from their point of view is acquiring servants if there no affordable housing in the area. I know one of my friends has a terrible time finding affordable staff as it is over an hours bus ride away.
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Rich people are always going to create a safe space for themselves.
Homes in gated communities are on average burglarized 33% less than homes in non-gated communities, but that doesn't mean they're safe. Everyone knows that's where the good shit is.
Basically Billionaires are replacing Millionaires (Score:4, Insightful)
Are we supposed to feel bad for the millionaires?
Flight (Score:1)
"Many locals are fleeing the area because of high prices..."
Yeah, if I could sell my home for tens of millions of dollars then I'd flee to a comfortable retirement too.
Mega drought (Score:4, Insightful)
What happens when the lake dries up? All these millionaires will be left holding worthless pieces of property in the next decade or so.
I guess I'm getting old because when I see articles like this about "zoom towns" where people sit in their houses for hours every day creating nothing tangible, I have to wonder where it will all lead when we spend more and more time and energy producing more and more intangible "products" that may not be all that beneficial to our lives and ultimately leave us wanting. Except for the fact they can't afford to live there, these kinds of communities do provide a lot of work for the types of people doing actual work, like landscaping, gardening, construction, etc. So there might be some positives.
Re:Mega drought (Score:4, Informative)
Re: Mega drought (Score:2)
I think you underestimate how shit modern man is with water usage but then billionaires might have the money to actually preserve it in these terms... irony is a cold bitch.
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The Aral Sea lost several times as much water as is in Lake Tahoe over a timespan of just 40 years. Just sayin'...
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Aral Sea
Surface area: 26k square miles
Average depth: 29ft
Volume of water annually diverted by canals in the 60s: 20 - 60 cubic km
Lake Tahoe
Surface area: 191 square miles
Average depth: 1000 ft
Volume of water annually diverted by canals in the 60s: 0 cubic km
The two bodies of water have no similarities at all.
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Agreed but as the shoreline recedes it will impact the value of properties that once were lakeside but now a long ways from where the boats can dock. Although the millionaires can probably just build new homes closer to the new shoreline on the newly emerged land. What could go wrong!
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What happens when the lake dries up?
Maybe they'll finally find Jimmy Hoffa's remains.
But mainly, it will be an opportunity for lakefront property owners to use the finest ipe boards to build two-mile long boat piers out to the vestigial mudhole in the center.
Re: Mega drought (Score:2)
Bingo. Would love to see an environmental assessment on the long term status of the lake but I oddly suspect 10 to 20 years and the value is a tenth or less... I mean maybe billionaires don't need to really plan for retirement but still, an odd way to shit cash
Anything tangible needs workers who could zoom (Score:3)
I guess I'm getting old because when I see articles like this about "zoom towns" where people sit in their houses for hours every day creating nothing tangible, I have to wonder where it will all lead when we spend more and more time and energy producing more and more intangible "products" that may not be all that beneficial to our lives and ultimately leave us wanting.
Is a car tangible? iPhone? your next life-saving prescription medication? a hammer? All 4 have engineers, logistics/shipping experts, salespeople, marketing folks, HR, engineers for support software, etc who could work remote 90% of the time. Not everyone who could do their job on zoom is slaving away to build whatever is inspiring your disgust.
If anything, I would wager those who disgust you already knew you could work remotely. All the gambling sites, pointless mobile game clones, weird apps no one
This is why I hate the news media today (Score:3, Interesting)
It also doesn't help that the older generations don't have enough money to retire so they're trying to get in on the rent seeking themselves in the hopes that they can make the younger generations pay for their retirement when they're too old to work.
All I'm saying is maybe completely screwing over the younger generations while simultaneously encouraging them to buy as many guns as they can get their hands on isn't a well thought out plan...
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And they're more than happy to leave those units empty in order to drive up the price of the units they can fill.
There's a limit to how long they can do that. Zilllow tried and ran into trouble.
The obvious solution is to build more housing so it becomes cheaper.
Zillow got cold feet (Score:2)
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Well, if you have a plan for stopping Blackrock, then I'd like to hear it. I still think the problem is not enough houses.
Vote Democrat (Score:2)
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Seriously the way you solve the housing crisis is to build more cities.
Where? Why is that better than expanding cities we already have?
Re:This is why I hate the news media today (Score:4, Insightful)
It's also annoying when media constantly spins gentrification as a problem when the reality is much more complicated.
Lets say you had a generational cottage at Tahoe that used to be worth like 200K in the 90s and is all of a sudden worth 10 million when you check the value... so you cash out and retire at some other area tike Florida hat's less insane. You think that's a problem? I doubt the newly minted multi-millionaire agrees.
That millionaire might think it's a problem (Score:3)
I'm not saying the ensuing violence will be good. Just ask Russia & China how violent revolution turned out for them. But if we keep this up in a country this built up it's going to happen.
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All I'm saying is maybe completely screwing over the younger generations while simultaneously encouraging them to buy as many guns as they can get their hands on isn't a well thought out plan...
You keep saying this, but I can't recall a single mass shooting where the shooter gave "high real estate prices" as his motive.
Also, TFA is just a fluff piece, like those house flipping shows.
"Meet James, he's a professional Twitch streamer and his husband Kyle collects vintage citrus juicers. They have budget of 2 million. They're looking for something with good bones that can be quickly renovated over their two-week vacation and double their money. "
That's not how it works (Score:2)
Large number of unmarried men armed to the teeth? That's going to boil over, and eventually end in a dictatorship. During the transition they'll do the same thing those guys always do and kill the upper middle class. Think Cambodia. It wasn
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They were telling my generation (Xennials) when we were kids that Capitalism is dog-eat-dog. One of the first assignments we did in business class in middle school was to attempt to make a household budget on a minimum wage income. As you might've guessed, it was basically a Kobayashi Maru scheme to demonstrate that you can't make a household budget on a minimum wage income, and that it's best to just stop being poor [knowyourmeme.com].
When you're indoctrinating kids into expecting that everything is rigged against them and
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It also doesn't help that the older generations don't have enough money to retire so they're trying to get in on the rent seeking themselves in the hopes that they can make the younger generations pay for their retirement when they're too old to work.
Exactly like Social Security, older retired people working off of the younger working ones, a horrible scheme, it's social but not secure.
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The problem isn't a handful of tech billionaires the problem is very large corporations buying up all the apartments and single family homes and turning them into rentals or worse airbnbs.
I guarantee you corporations are not buying $40million properties and turning them into BnBs. When they dedicate $100m to buying properties they do so with the intent of buying 200 of them, not 2 of them.
Try reading TFA for once.
In the 1800's.. (Score:2)
There is no entitlement to stasis (Score:2)
Moderns forget many of these areas were recently settled and that there is no entitlement to stasis.
If you own desirable property and need the money, cash out and leave. The world is large and you do not NEED to live where you do. It's a discretionary choice especially in a rich hood getting richer.
If you don't own then you can leave for more affordable climes and arguably should. The US is a mobile society and unless you're indigenous you or your predecessors GTFO someplace that sucked in order to upgrade.
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The flip side - They move from places like the bay area to places like Tahoe, Minden NV, etc, because they are voting in problems that trash their towns. Then they drive up real estate and drive out locals and trash the new place because they like the ideas they voted for initially, not realizing the outcomes will be the same. Lather, rinse, repeat. Where will they go next?
"Many locals are fleeing" (Score:2)