Here in “Income Village"--just north of the highest-price private estate in the nation--billionaires are buying out millionaires, paying top dollar for prime Tahoe lakefront property and building their dream homes.
But the arrival of free-spending newcomers in this stunning mountain paradise has left less affluent neighbors with nightmarish tax bills.
And gated driveways, security lights and cameras at the big “trophy” homes--built after smaller, older houses were demolished--have changed the feel of a community where some longtime residents hadn’t bothered to lock their doors.
Upscale beach homes owned by well-to-do people are nothing new in this town of about 9,000, on the east shore of one of the world’s clearest and deepest high-altitude lakes.
But few anticipated the changes along the town’s most exclusive street, Lakeshore Boulevard, that occurred as casino baron Steve Wynn, former junk-bond king Michael Milken and a firm headed by PeopleSoft Inc. chief David Duffield bought in.
They’re the latest among a crowd of billionaires and near-billionaires to get homes here. Earlier arrivals include Milken colleague Warren Trepp, developer Kern Schumacher and construction magnate Les Busick. And that’s not counting all the millionaires, newcomers and old-timers alike.
Trepp alone bought seven homes in 1987 and demolished them to build one 8,000-square-foot residence. Milken and Wynn arrived in 1993 and have lavish homes separated by Schumacher’s estate.
Duffield’s company has a small army of carpenters working on a huge granite-and-mahogany house. It’s being built on the site of four older lakefront homes that were torn down. Those homes plus two adjacent homes cost more than $6 million. The company has spent millions more on other properties around town.
“I don’t want to crab and complain, like an old mossback,” said 73-year-old Mary Jane “Bill” Dewhurst, who lives in a lakefront home she and her late husband built in the 1950s.
“But everybody like me is unhappy with what’s happening because it seems like the lake has lost its character.” Dewhurst’s parents were caretakers on a big Tahoe estate when she was born.
“There used to be a few millionaires on the lake,” she said. “Now it seems like everyone’s a millionaire--and the billionaires are buying them out.”
The Dewhursts paid $10,000 for their lot in 1956. This year, Dewhurst says her property tax bill is nearly three times that. “But I’m going to try to stay here. I love it, and it’s my home.”
“I thought what I might do is turn my house into a museum--so people can see how we used to live up here,” she added with a laugh.
Joe Marson, who runs a deli-liquor-grocery store, moved to Incline Village in 1976. He says property tax increases have been astronomical, but what’s worse is the gradual loss of a sense of community.
“It’s fine if somebody wants to build a monument to themselves,” he said of the big new estates. “But the feeling of working together, that attitude has gone way down.
“You see more and more homes being fenced off, and that’s one thing I really hate,” he said. “In a small town, your neighbors can always look in on the place if you’re gone for a few days. But with the fences and the rest of this, that’s what we’re going to lose.”
Marson has his store up for sale, but he’s not planning to leave town. He’s a member of the general improvement district that oversees the community, and even with the changes, he says Incline has a lot of great people.
But with property values soaring by 50% or more for some homes over the last several years, many people who work in Incline’s small business district must rent or live elsewhere.
The cheapest “true” beachfront property--one with at least 80 feet of lake frontage--is going for $5.3 million. The most costly? A record $50 million, paid earlier this month for the largest private estate on the lake, just south of the village.
The 140-acre Thunderbird Lodge was purchased by developer Del Webb Corp., which plans to swap the land for other property owned by the federal government and to sell the buildings to the University of Nevada at Reno. Eventually, the estate will wind up in the hands of the U.S. Forest Service, which pleases conservationists.
“We’re delighted to see the property going into public hands,” said Rochelle Nason, an attorney for the League to Save Lake Tahoe. “There is a tremendous shortage of shoreline land open to the public.”
But that transaction is the exception.
Rents have soared in Incline Village too, and many workers commute from towns like Kings Beach, Calif., about seven miles away, where there’s low-cost housing. Others share Incline Village condos with roommates.
“I love Incline,” said Dave Defoe, a ski lift operator. “But it’s economically impossible for me to live here. It’s untouchable even with a long extension cord.”
Defoe, 30, rented a tiny cabin in Kings Beach for $500 a month and happily makes the daily drive to work. “I get to take in the sights along the way,” he said of the drive along the lake’s edge. “It’s not like the L.A. freeway.”
“In Incline, you’ve got the haves living in absolute splendor and the have-nots in the condo-land hovels,” he said.
People in Kings Beach, just over the Nevada state line in California, can live more cheaply, but they must deal with what might be considered urban blight--if the scenery weren’t so grand.
Placer County, Calif., Sheriff’s Capt. Kent Hawthorne says his officers have encountered problems such as run-down housing and unscrupulous landlords, petty thievery and other problems in Kings Beach that aren’t found in Incline.
“But it’s not a bleak picture,” he said. “There’s a tremendous community spirit.”
John Faulker, chief appraiser for Washoe County, Nev., says the latest property valuations at Incline have upset many people--but under Nevada law the current market value is used to calculate tax bills.
“Everyone who moves [to Incline Village] may not have all the money in the world, but they’re still paying the price,” he said. “And when the market gets hot, the market tends to drive out the long-term residents. It’s out of our control.”
Real estate broker Dan Schwartz, who has lived here for 23 years, says he’s dumbfounded by the upward spiral of prices.
“The wealth has always been here, but more recently it has become a focal point of the media, and there has been a change in the size and grandeur of the homes,” he said.
“When Wynn and Milken bought, some people said it was a flash in the pan and they paid too much,” Schwartz said. “Now, four or five years later, the values have gone up incredibly. It turns out they bought at a perfect time.”
Why Incline? Schwartz says it’s a combination of scenic beauty, a kind Nevada tax structure, and, for the extremely rich, an opportunity to hang out with their peers.
“There’s no question about it,” he said. “What we’re witnessing is the very wealthy, the billionaires, who really do like having people they can socialize and recreate with.”
NEXT WEEK: Trophy homes and nouveau ghost towns.