The Tahoe Regional Planning Agency board dealt a deathblow to a proposal that would have placed deed restrictions on residential building allocations, in effect barring new homes from being used for vacation home rentals and second residences.

Instead, the agency’s local government committee recommended taking a less restrictive approach, which staff described as an “incentive” approach.

The recommendation was just that — a recommendation — and the TRPA Governing Board ultimately agreed to distribute the latest round of building allocations, which are needed for new construction in the Tahoe Basin, to local government jurisdictions.

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TRPA created the building allocations as a means to control development at the lake.

The outcome at Wednesday’s meeting was hailed by some residents worried about infringement of property rights; and decried by others who viewed it as another failure of government to take meaningful action on one of the most controversial subjects in the basin.

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“Ultimately we’re happy,” Mark Salmon, a local Realtor and longtime South Shore resident, told the Tribune. “I felt like … TRPA staff and the local government committee really listened to the data.”

The data Salmon referenced came from audits of past allocations, which found that typically 13% of allocations are used for short-term rentals and another 45% are used for second homes that sit vacant for most of the year.

If those trends held true for the remaining 1,820 allocations — once those are distributed Tahoe is expected to be at maximum build out — 237 homes in the future housing stock could be used as short-term rentals. That number represent 0.5% of the total housing stock (49,495) once the remaining allocations are distributed.

That reality factored into the thinking of several members of the governing committee, including committee Chair and El Dorado County Supervisor Sue Novasel, who stated the numbers out loud during the meeting.

While the number, if the trend holds true, would represent a fraction of the overall housing stock, the larger point is that there are already too many short-term rentals, Janet McDougall told the Tribune.

McDougall, a longtime resident and member of a local residents group that has argued for greater limitations on the number of VHRs, said she and others were in support of a TRPA staff proposal presented in March.

That proposal would have made allocations conditional on the requirement that they not be used as short-term rentals or second homes. The proposal was intended as a response to a steady stream of complaints regarding short-term rentals and as a piece of the solution to the basin’s affordable housing crisis.

Realtors, construction workers and others expressed opposition, arguing the proposal would likely fail to accomplish the intended goals, and could instead create unintended consequences.

Members of the local government committee expressed a desire to see the short-term rental issue separated from the affordable housing issue.

That’s what TRPA staff set out to do with the proposal considered at the April 24 meeting.

“We were pretty surprised,” McDougall said in describing the moment when she and others learned TRPA was abandoning the deed restriction proposal.

Instead of deed restrictions, staff recommended the local government come up with a third criteria for distributing allocations. The new criteria would address neighborhood compatibility issues — such as noise and trash — regarding short-term rentals.

The local government committee would address the affordable housing issue separate from the short-term rental issue.

There were differing opinions on the suggestion.

Washoe County Commissioner Marsha Berkbigler said she wanted to see local jurisdictions given as much flexibility as possible regarding short-term rental regulations. Washoe County is in the process of drafting an ordinance regulating short-term rentals.

Shelly Aldean, Carson City’s representative on the governing board, seemed to agree with allowing for some flexibility. She called the thought of preventing a homeowner from being able to rent out their property “draconian.”

Others took a different stance.

The California governor’s appointee, E. Clement Shute Jr., said short-term rentals are effectively undermining TRPA’s Regional Plan and invalidating the commodity system intended, in part, to limit the number of beds available to tourists.

“We’re undermining our own regional plan,” he said.

Shute worried aloud that concerned residents would view the action as TRPA “kicking the can down the road,” and that the new recommendation from staff would not actually accomplish anything.

A majority of the local government committee ultimately appeared to agree with staff’s recommendation, which charges the committee with crafting the new criteria by the end of the calendar year.

The full governing board did not vote no that recommendation. Instead it voted to distribute allocations to various local governments. Shute was the lone “no” vote on distributing the allocations.

SLT to discuss allocations

In total, TRPA distributed 118 residential allocations for 2019 and 118 for 220.

Placer County receives the most with 37 allocations each year, followed by the city of South Lake Tahoe at 33 allocations per year.

El Dorado County receives 30 allocations per year, followed by Douglas County with 10 allocations per year and Washoe County with eight allocations per year.

The city of South Lake Tahoe is expected to discuss the issue of allocations at its first meeting in May.

Earlier this month, City Council agreed to distribute unused allocations it had earmarked for multi-family residential and “town center” development to single-family residential allocations.

The city created different earmarks for the residential development rights it receives in order to incentivize in-fill development in town centers and higher density buildings that could help alleviate the city’s housing units.

That incentive effort has yet to prove successful. Unlike the allocations earmarked for multi-family and town center, the allocations earmarked for single-family homes have all been taken and there remained a waitlist of more than 90 applicants attempting to receive a single-family allocation.

The city agreed to shift the remaining allocations from multi-family and town center to single family, with the agreement that once it received this latest round of allocations it would replenish those allocations with single-family allocations.

The move was done to prevent any delay to developers hoping to receive an allocation and start construction in the coming weeks.

However, there was general agreement from members of council that they didn’t want to see single-family allocations go to build second homes and short-term rentals.

Councilor Devin Middlebrook repeated that desire several times during council’s April 16 meeting.

Council agreed to continue the conversation in May so that it could wait to see the outcome of the April 24 TRPA meeting.

After that meeting, Mayor Brooke Laine explained her seeming irritation over the short-term rental issue, stating she had hoped to talk more about the larger affordable housing crisis.

“My bigger concern is with housing.”

The short-term rental issue, which Laine explained has roots in the TRPA’s code recognizing them as single-family residences, is a ship that has left the dock.

On one level, Laine said the passage of Measure T — a voter initiative that effectively bans short-term rentals in residential areas — has simplified the issue for the city.

Regarding the issue of single-family allocations being used for second homes and short-term rentals, Laine said she thinks council will explore the possibility of selecting people on the single-family allocation wait list who are specifically looking to build a primary residence.

Council’s next meeting is scheduled for May 7 at 9 a.m.