SOUTH LAKE TAHOE, Calif. – More than fifty community members are bundling up this winter, knocking on doors and tabling at storefronts with clipboards in-hand. Some have even cross country skied petitions to each other in the recent storm. They are gathering signatures for their vacancy tax petition.

They’ll need 1,159 signatures from voters registered in the City of South Lake Tahoe by April 10 to get the initiative on November’s ballot for the community to vote on.

Proponents of the circulating petition believe the tax could open up already existing houses and raise funds for housing programs.

---

---

But just how will it do it? What exactly is a vacancy tax? Who will it impact? And how will it be enforced?

What is a Vacancy Tax?

A vacancy tax is broadly defined as a tax on empty or vacant properties or units. It can apply to both residential and commercial property.

---

---

Certain cities in the U.S. and beyond have implemented such a tax for varying reasons with a range of parameters.

Washington D.C. structured a tax on vacant commercial and residential properties in 2011 to bring vacant buildings back to productive uses. Vacant properties there are taxed at a rate of $5.00 for every $100 assessed value.

In 2019, Oakland, Calif. implemented a parcel tax on vacant properties in use less than 50 days a calendar year. These properties are taxed $3,000-$6,000 each year to discourage vacancy and raise funds for homeless services, as well as address illegal dumping.

Berkeley, Calif. implemented a tax on residential units that sit empty more than 182 days a year. Those that do, get hit with a $3,000-$6,000 tax the first year and $6,000-$12,000 consecutive years. This tax was meant to address concerning residential vacancies, open up the supply of housing units and avoid blight.

The creators behind South Lake Tahoe’s proposed vacancy tax modeled theirs after Berkeley’s, according to Amelia Richmond with Locals for Affordable Housing, the committee sponsoring the initiative.

South Lake Tahoe’s proposed Vacancy Tax

If implemented, the proposed vacancy tax circulating South Lake Tahoe would tax property owners for each residential unit that sits empty for more than 182 days in a calendar year.

Property owners with residential units deemed vacant would incur a $3,000 tax their first year and a $6,000 tax consecutive years.

Owners can avoid the tax by renting to a tenant, if they themselves cannot occupy it just over six months out of the year. This includes short-term rentals in the tourist core area. Occupancy does not have to run consecutively.

Richmond says they understand, “There are certain jobs that take people away from town, but this is still their home,” so they’ve provided exemptions for residents with certain occupations as well as other circumstances.

The initiative includes exemptions for:

• hospitalization
• firefighters
• emergency service workers
• military
• natural disasters
• renovation/construction
• death
• declared emergency

If passed in the 2024 ballot, the tax implementation period would begin in 2026 with the fees listed above, but are subject to adjustments annually.

The tax does not apply to hotel rooms, accessory dwelling units, or units not usable in the winter season.

Richmond says, “We want this to be fair,” explaining certain properties are subject to seasonal road closures and some lack insolation, like seasonal cabins. Those can only be used for a part of the year, so they are exempt.

ADUs were a topic of much discussion for the organizing group. Richmond says ultimately, they didn’t want disincentivize them even though they do take from the Tahoe Regional Planning Agency’s capped development pool. ADUs themselves would not get hit with the tax, but a primary residence on the same property still would.

How will it create more housing?

Proponents claim the vacancy tax will create more housing for locals by incentivizing second home owners to rent their homes. If those owners choose not to, they’d pay the tax in-lieu, which creates funds for housing, transit and road repairs.

Richmond says it “shifts the incentive to leverage the housing we already have.”

They claim if 20% of vacant second home owners shift to renting their property six months or more, that adds 1,460 housing units while generating more than $34 million each year.

Why not a percentage?

“I wish that it could be a percentage of the property value,” but Richmond explains what keeps the group from proposing a percentage tax is California’s Proposition 13.

“It certainly would be more fair if you’re keeping a 10,000 square foot home vacant, that it be taxed higher than keeping a 1,000 square foot home vacant,” Richmond says, “but because of the way that Prop 13 is written, that is not legal.”

Vancouver, Canada and Rhode Island both have vacancy taxes based on percentages.

Enforcement

If passed, property owners will claim occupancy on declaration forms indicating their property’s occupancy for the year. Specifics would be up to the City Manager to determine, but questions validating occupancy could inquire whether anyone living there was enrolled in a local school district, or locally employed.

Enforcement will occur through spot audits, utility usage and penalties for fraud declarations.

Where will the taxes go?

Revenue from the tax will go into a special fund called the Residential Vacancy Tax Fund for the exclusive purposes of housing, roadwork, and transit projects. It will not go into the city’s general fund.

The initiative’s text outlines housing purposes the city can use the funds for, including housing incentives, assistance programs and support services.

The funds could also reimburse the city for administrative costs in establishing and maintaining the tax, including legal defense.

Richmond says her and her team did their best to write something thoughtful that “Could really improve the lives of locals and to have a meaningful impact on solving the housing crisis.”

The initiative has been met with contention from the community. One coalition group called Keep Community First formed in response to oppose the vacancy tax and other initiatives. Both South Tahoe chambers of commerce, South Tahoe Association of Realtors, and others have been outspoken against it at multiple City Council meetings, despite the proposed tax being a citizen initiative passed by voters and not City Council.

Certain councilmembers have discussed their views on the matter. Scott Robbins supports the measure, while Tamara Wallace is opposed.

The Tribune presents multiple points of view on the vacancy tax initiative in its article published concurrently, To tax or not to tax: The question on vacancy.