South Lake Tahoe City Council proceeds with cap of 1,400 VHRs | TahoeDailyTribune.com

South Lake Tahoe City Council proceeds with cap of 1,400 VHRs

South Lake Tahoe City Council is moving forward with a cap of 1,400 VHR permits in residential areas.

Despite some inter-council disagreement, South Lake Tahoe City Council appears to be moving forward with a handful of amendments to the code governing vacation home rentals, including a cap of 1,400 permits, but no distance requirement between properties.

At the City Council meeting on Tuesday, Nov. 7, councilmembers voted 3 – 1 in favor of moving forward with a cap of 1,400 vacation home rental (VHR) permits in residential areas of South Lake Tahoe. Mayor Austin Sass was in favor of a 1,200-permit cap and voted against the motion; councilmember Tom Davis was recused due to his part ownership of Tahoe Keys Resort.

Currently, there are around 1,850 VHR permits, roughly 1,400 of which are outside the tourist core in residential areas.

Sass stated that given the petition circulating in South Lake Tahoe seeking to put a ban on VHRs in residential areas, with a few exceptions, to a public vote, it was necessary to enact the strictest ordinance possible.

"My decision is influenced by that. If vacation home rentals get banned in our city, over a 12-month period they disappear, the economic Armageddon that would come with that would be beyond what I am personally willing to gamble on. We would lose probably $2 million from the city's operating budget. The city manager would be tasked to figure out how she's going to make up that $2 million — layoffs, programs going away, I'm not sure what," said Sass.

He also noted that it could jeopardize the future of the new city recreational center, which is funded by transient occupancy tax (TOT), and impact real estate values when VHR owners can't make mortgage payments due to loss of revenue.

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The city was informed of the petition on Oct. 23. It needs at least 1,036 valid signatures from registered voters — not just residents — in South Lake Tahoe to get the initiative on the ballot.

Councilmember Brooke Laine argued, as she has in previous meetings, that the issue is a lack of consistent enforcement.

"One of the things I've said to my colleagues is let's take baby steps. Let's put some things out there that we can measure and see if it has an effect. We have proposals about density, about caps, about enforcement. Let's pick one and let's see how it goes," said Laine. "When we talk about the [residents] — I'm one and most of us in the room today are — I have concern for all of them and their quality of life, but I don't think their quality of life is impacted because there's 1,400 or 1,350 VHRs, I think it's because we don't have rules that are being strictly enforced."

Other parts of the amended ordinance previously agreed upon by council include a bear box requirement, ranging from 2- to 4-can sizes, based on the square footage of the home; increased fines from $250 to $1,000 without a warning; and a three-strike policy within two years, which results in a permit revocation. (These rules do not apply to VHRs within the tourist core.)

Additionally, council called for an increase in permitting fees to allow for the hire of three additional VHR community service officers, bringing the number to five. Currently there is only one officer after a second hire fell through.

Council opted to make a decision later on whether VHR homeowners must comply with VHR rules — like occupancy — when they are not renting out the property. A separate ordinance will be written in the future to address short-term room renting in a home.

The amendments to the VHR ordinance will undergo a second reading at the next meeting on Tuesday, Nov. 21. If passed, the ordinance will go into effect 30 days later.

In the meantime, the temporary ban on new VHR permits (now just in residential areas) is still in place. At Tuesday's meeting council amended the moratorium, which incorrectly included VHRs in the tourist core. At the same time, City Council voted to not allow pending VHR applications — currently there are 93 — to continue to be processed.

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