LEASE TO APPEASE
Published in the Nov. 22 issue.
On Wednesday night, the Mammoth Lakes Town Council updated the Lease to Locals program to make it more attractive to homeowners.
Lease to Locals is one of the town’s housing initiatives aimed at addressing “the missing middle” – workers who make between 80-150% of the area median income. The program uses town dollars to incentivize homeowners who are not currently renting their properties long-term to lease them to residents.
Lease to Locals was first approved as a one-year pilot program in July of last year, which the town funded at $425,000. The program operates through a contract with Placemate, which connects homeowners with tenants for a fee.
Wednesday’s updates to the program would make the program more lucrative for homeowners to join. The motion authorized three changes:
1) Make the contract term subject to the availability of program funding. 2) Adjust the performance-based administrative fee to Placemate to $2,200 per property, an increase from the current fee of $1,667 per lease-up. 3) Increase the program rent limits by 20%.
Incentives are based on how many tenants, up to four, live in the property. They are paid in two increments: before the lease and after it ends. For long term rentals, the incentive per tenant is $4,500. For seasonal leases, the homeowner is incentivized with $2,000 per tenant. Currently, the average incentive per property is approximately $10,500 per year.
The average rent for a two bedroom apartment under the Lease to Locals program is $2,500. The rent cap is also $2,500. Town council’s vote on Wednesday increased the rent cap by 20%, which would be $3,000 for a two bedroom instead.
The rent caps will not apply retroactively to homeowners and tenants already enrolled in the program. They will only apply to future individuals who join the program.
Wednesday’s vote also eliminated the expiration date set for the program, which was set for Dec. 31. Instead, it extended the program until the remainder of the committed funds, $100,000, as well as any additional funds, have been exhausted.
On June 18, the Town extended its contract with Placemate by six months and allocated an additional $30,000 for administrative fees to further market the program. Since the contract’s extension, nine more landlords have participated in the program.
Placemate has implemented many successful Lease to Locals programs throughout the country, but in Mammoth Lakes, it was slow to start. Within the first year, Placemate had 141 property leads, but only 12 of those properties ended up participating, which ultimately housed 37 tenants.
When the Town approved the program, it had hoped to enroll 40 properties in the Lease to Locals program by the end of the 2025. Today, the program has enrolled 20 properties and housed 56 people.
In the past, Landman has blamed Mammoth’s seasonality and Placemate’s marketing strategy as reasons for the program’s shortcomings.
On Wednesday, Landman pointed to low rent caps as a reason why homeowners aren’t willing to shift away from short-term rentals.
So far, only two of the seven property owners who had rented to locals for a 5-11 month term with Lease to Locals have continued to rent long-term.
“Rent caps are inhibiting people from moving forward,” Landman said. “The property owners may be treating the incentives as a subsidy rather than as an incentive to start long term renting.”
The motion passed 4-1, with councilmember Bill Sauser on the dissent.
“I believe [this program] is too expensive,” Sauser said. “I have some ideas […] we could spend this much money on and perhaps create even more rental units, but I’m not going to go on and on about it.”
Councilmember Brent Truax also showed some apprehension, though he ultimately voted to approve the item. “I don’t think this is the best use of our money,” he said. “My concern is we have nothing else at this time.”
Other members of the council were wholeheartedly in favor of the motion.
Mayor Pro Tem Amanda Rice said since the average price of a two bedroom condo is $3,500, the increased rent cap would still be below market. “To me, increasing the prices seems reasonable.”
“I’m with you sister,” Wentworth affirmed.
“I’ve been a fan of this since day one. We had to give it time and we had to adjust,” Mayor Chris Bubser said. “This is a way of putting roofs over heads.”
