Financial effect from ban of vacation home rentals in residential neighborhood (Opinions)

Commissioner Danny Tarkanian
Danny Tarkanian

The Douglas County Board of County Commission (BOCC) voted 3-2 to publicly disseminate that the anticipated financial effect from an initiative banning Vacation Home Rentals (VHR) in residential neighborhoods would be $2,106,543 per year.

The vote will be used for two purposes. First, to scare Douglas County residents not to sign the initiative. Second, to support a lawsuit to challenge the initiative in court. The majority vote may have succeeded at the first but failed miserably at the later. As you will read below, the figure defies logic.

The majority’s figure assumes the county will lose 565 VHRs but not gain one additional hotel booking. In addition, the figure does not reduce the current cost of the VHR program ($811,865) one penny despite the fact that there will be 97% less VHR permits.

County staff admitted their numbers were “all conjecture”. They refused to compare the financial effect a similar initiative (Measure T) had on the adjacent city of South Lake Tahoe (SLT).

Since Measure T took effect in 2019-20, SLT lost two and half times as many VHRs than Douglas County would (1,297 to 565), but its transit occupancy tax went UP 10.5%. Taxes from motel occupancy went up 27.7%. These numbers show that Measure T had no adverse financial effect on SLT’s tax dollars. It shows many tourists switched from VHRs to motels and that motels were able to raise their rates because of the increase in demand.

See link showing these numbers:

During the same time period, the VHR revenue at the Lake in Douglas County increased 362% while occupancy at its hotels went down 26.5%. This clearly shows that many tourists who rented VHRs in SLT started to rent them in Douglas County and some who stayed in hotels in Douglas County moved to VHRs.

See link showing these numbers:

County staff suggested that the maximum increase in hotel occupancy would be 9%. They came to this conclusion because hotel occupancy had decreased 9% from the year VHRs were first regulated in 2005 through 2020. They completed ignored the 26.5% decrease that have occurred the past three years.

Commissioner Hales refuted even this percentage. She argued that because there is such high occupancy during the busy months in Lake Tahoe there is no room for a 9% increase. She either ignored or didn’t understand that since there was a 26.5% decrease in occupancy over the past three years, occupancy could increase the same. The current year to year occupancy rate is a dismal 41%.

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