Fate of proposed Measure T compromise could be decided Tuesday

Pictured is a VHR in South Lake Tahoe.
Claire Cudahy / Tribune file photo

SOUTH LAKE TAHOE, Calif. — An effort to settle a lawsuit over the city’s voter-approved vacation home rental ban appears to be on shaky ground following mixed responses to a proposed comprise.

The proposal crafted after seven months of work by City Manager Frank Rush Jr. was intended to garner support from those for and against Measure T, the voter-approved initiative that will limit vacation home rentals (VHRs) to the tourist core and commercial areas.

Consensus is viewed as critical as any changes to the city’s VHR regulations must be put to a vote of the people.

But after it was privately presented to both sides in early August, the Tahoe Neighborhoods Group informed Rush that it opposed the proposal and would not participate in formal mediation tentatively scheduled for October.

The Neighborhoods Group led the effort to put Measure T on the ballot in 2018. In an email to Rush, the Group characterized his proposal as an attempt to undermine the will of voters.

“After review and consideration, we still believe the best way to soothe over divisions at this point is to respect the vote and defend the law, and let the litigants follow the same rules we did if they want to change it.”

On the other side of the issue, those who fought against Measure T see some issues with Rush’s proposal but do not oppose working toward a compromise if all parties can come together, said Mark Salmon, a local Realtor who advocated against Measure T.

Salmon is among a selection of locals tapped to represent a group — identified in court documents as the South Lake Tahoe Property Owners Group — that filed a lawsuit against the city arguing Measure T is unconstitutional.

Salmon and others who were briefed on Rush’s proposal are not parties to the lawsuit, according to Salmon. Rather, they were selected by the Property Owners Group to represent their interests in discussions with the city.

Salmon believes the issues they identified in the proposal could be addressed through continued discussion. However, with the Tahoe Neighborhoods Group declining to participate in the process, Salmon said they see no point in continuing with those efforts.

Both sides are waiting to see what — if any — announcements will follow a closed session Tuesday morning where City Council is slated to discuss the lawsuit against Measure T.

That discussion will likely decide the fate of the proposed compromise.

“We’ll know after we talk with the council on Tuesday,” Rush told the Tribune.


Rush’s proposal would allow VHRs in any location within 2,000 feet of Lake Tahoe’s shoreline and the canals in Tahoe Keys, as well as any location within 2,000 feet of Heavenly Mountain Resort’s California base lodge.

This would amount to 892 VHRs, according to the proposal, which would also set a cap on the total number of VHRs in those areas. The cap would be equal to 6% of the total number of housing units in the city, which, based on 2017 census data, would cap the total number of VHRs at 1,062.

The proposal would also allow VHRs in the tourist core area and commercial and recreational areas, which amounts to another 287 VHRs.

It would also allow the formally established Tahoe Tyrol and Bavarian Village HOAs to decide if they want to continue allowing VHRs. Those votes could amount to a total of an additional 54 VHRs.

No VHRs would be permitted outside those areas after 2021.

The proposal also calls for the creation of a privilege tax averaging $2,000 per unit per year, although larger VHRs could pay more and smaller ones could pay less. 

The tax would replace the existing permit fees and generate about $2.7 million per year. Money left over once VHR enforcement costs are covered would go toward a newly established “affordable housing fund.”

Under state law, tax increases designated for a specific purpose must be approved by two-thirds of the electorate.

The proposal would also create specific VHR management requirements, including management by a professional company located within city limits and uniform education procedures.

An advisory committee would be created to discuss issues and concerns. 

Current regulations regarding parking, noise, hot tubs and bear boxes would remain in place. But it would create a new occupancy limit allowing two people per bedroom plus an additional two people per VHR. As an example, a three-bedroom home would be allowed to have eight people.

Separate $500 fines would be issued to both the tenant and owner when a VHR is found to be in violation of the rules. 

The proposal also calls for more proactive enforcement on the part of the city.


In total, Rush said his proposal is meant to be a true compromise, with each side realizing some victories while also making concessions.

“I think it was a very thoughtful and fair compromise,” Rush said.

However, the Tahoe Neighborhoods Group questions why the city was involved in such a process in the first place. In its email to Rush, the Group described the city’s involvement as an attempt to circumvent the will of the voters — a move it said could prove to be a political blunder.

“There is no question that this proposal has rekindled the lack of trust in government that fueled the initiative in the first place,” the Group wrote.

Rather than resolve the lawsuit with another ballot measure, the Neighborhoods Group called on the city to defend Measure T in court.

But Rush maintains that a compromise is the only hope for settling the VHR issue. Without one, he said more ballot measures and litigation are sure to come in the future. 

“I felt like that was a good effort,” he said of the proposal. “Again, it’s really just rooted in trying to build community, build community cohesion, eliminate the division and move forward, because the issue is not going away, regardless of the outcome of the lawsuit.”

Salmon said those who oppose Measure T were willing to work with Rush’s proposal before the Neighborhoods Group rejected it.

As for concerns, Salmon said they oppose the creation of the “privilege tax” to support affordable housing because it would require a higher threshold for voter approval. 

Approval from two-thirds of the electorate is a tough hurdle to clear even with far less divisive issues.

“It’s an exercise in futility,” Salmon said.

As for mediation, Salmon said those who filed the lawsuit are not interested in spending thousands of dollars on mediation if it won’t yield a compromise that can be approved by voters.

Peggy Bourland of the Tahoe Neighborhoods Group told the Tribune that the Group declined to participate in future mediation because the issue is now up to the voters.

“It’s not up to us anymore,” she said. “Measure T passed.”

The opponents of Measure T are entitled to start their own ballot measure, Bourland said, but the city should not be involved in the process.


A new ballot measure could be coming in the future depending on the outcome of the lawsuit, Salmon said.

He and others are waiting for possible action from council tomorrow. 

“If nothing comes out of that meeting then litigation is imminent,” Salmon said in giving his assessment of the situation.

If the lawsuit does move forward and Measure T is ultimately struck down, Salmon said the city would revert to its previous regulations, which he argued are proving to be effective.

The city experienced a 59% reduction of VHR complaints over the first three months of 2019 compared to the previous year, according to Rush’s proposal. However, there could be different explanations for the decrease.

If Measure T is upheld in court, Salmon said the Sustainable Community Alliance will move forward with putting a ballot initiative on the 2020 ballot.

The Alliance, which Salmon serves as co-president of, attempted to put a competing initiative on the 2018 ballot. Had they been successful, it would have gone up against Measure T, which passed with 58 votes in an election that saw nearly half a million dollars directed to the “No on Measure T” effort. 

But the Alliance failed to get the necessary number of valid signatures needed to put the initiative on the ballot. Salmon said those mistakes would not be repeated in 2020.

“We are much more organized this time,” he said.

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