Group seeks lawsuit against city over vacation rentals | TahoeDailyTribune.com

Group seeks lawsuit against city over vacation rentals

Jack Barnwell
jbarnwell@tahoedailytribune.com

SOUTH LAKE TAHOE ­­- A property management group and group of vacation rental owners filed suit against the City Council of South Lake Tahoe on June 5 over its recent adoption of a vacation home rental ordinance that increases fees and adjusts regulations.

Lake Tahoe Properties, Inc., Jim and Melinda Morris, and South Lake Tahoe Vacation Rental Alliance seek to have the new ordinance set aside, suspend all attempts to enforce the new ordinance pending the outcome of litigation and declare that it violated various city and state laws.

The pending lawsuit claims that the city and the city council violated its own municipal code and the state code for not properly discussing the fees prior to adoption at its April 21 meeting.

The only time the city has discussed fees was at its April 21 adoption, when the item had been pulled from the consent item.

City Manager Nancy Kerry said by email on Tuesday she couldn't comment on the lawsuit because the city had not been served.

Kerry added that city staff and council members have met with stakeholders, including the Association of Realtors, vacation home rental industry members, and residents.

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"The City has held a number of public meetings on the subject where many people have voiced their opinion. We have also met with South Tahoe Association of Realtors, their lobbyists /attorney and others they have included in various meetings," Kerry said.

The ordinance increased the annual permit fees for vacation home rentals in the city per number of occupants. For a vocation rental with 13 or more people it tops out at $800 a year versus $144 per year for existing permit owners, according to the draft lawsuit.

The fee doubles if a vacation home ordinance has more than three violations, which include clear probation of noisy actives after 10 p.m. and requires cars to be parked in designated areas.

The city's adopted fee structure for vacation home rentals registered for less than 13 occupants meets a tiered structure.

The lawsuit argues that the revenue to be generated would outweigh the costs of enforcing it, at an estimated $502,000, when the existing VHR enforcement fund already had between $220,000 and $240,000.

Another argument was that there is no direct connection between the cost and need to hire two code enforcement officers and a part-time auditor and the fee increases themselves.

Jim Morris on Thursday said that the increased fees were too high and the reason behind it was dubious.

One of the major arguments for increased fees came from noise complaints, he said, based on Police Chief Brian Uhler's presentation on Nov. 18, 2014.

Morris said of the 757 noise complaints the city looked at in 2014, only 162 came from vacation home rentals, or 27 percent.

Morris said that vacation rental advocates have tried to contact the city, but heard nothing. He added he supports the old VHR ordinance that had been in place but the city just needs to enforce it.

"The suit is asking for the reversal of the ordinance," Morris said. "At this point there is no monetary damage (from the ordinance) but we are trying to stop the city from doing what we consider an illegal ordinance."

Kerry, the city manager, in her Tuesday email, said that revenue generated by permits or licenses, including the new VHR ordinance, can be used to cover all costs of a program including program management, enforcement, permit issuance, city management, investigation auditing and "many more costs too numerous to list."

Those outreaches included a March 24 public workshop and comments received at the April 7 meeting that introduced the updated fee schedule.

Vacation rentals have become a controversial issue in South Lake Tahoe, especially as city staff have been directed to consider possibly zoning vacation home rentals or refining how potential owners may be required to go through a public notification process before they can be approved for a permit.

Morris said that could affect property sales and values in the city. Zoning it in an area near Stateline, Nev., for example, wouldn't work well.

"There are a few good spots up there (for vacation rentals) but people who come up want to be near the lake or activities," Morris said.

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