WHAT’S GOING ON WITH VACATION RENTALS IN SOUTH LAKE TAHOE?

vacation rentals in South Lake TahoeThe City of South Lake Tahoe, CA and the area outside the City limits in El Dorado County have some of the most strict rules for VHRs in Lake Tahoe. But there are still opportunities for vacation rentals in South Lake Tahoe. You just have to know what the rules are and how they affect the housing market in the area.

Having a Team of Agents on your side who stay up-to-date on this issue is very important, and can help you navigate through the different rules and regulations.

THE CITY OF SOUTH LAKE TAHOE

In December 2017, the City of South Lake Tahoe put new rules in place. These rules were at the time the most strict of any area around Lake Tahoe. There are more vacation rentals in the City than other areas around the Lake. So the City Council felt like they had to do something drastic to protect the locals concerns, while still allowing home owners to rent out their properties as vacation rentals.

However, in November 2018 the voters in South Lake Tahoe approved Measure T. It is a ballot measure that effectively bans vacation rentals in South Lake Tahoe within most of the City limits. There are some exceptions to properties that are still allowed to get vacation rental permits. These exceptions include properties within the Tourist Core area as well as commercially zoned properties in South Lake Tahoe. Also, permanent residents can get a permit and rent their homes out for up to 30 days per year as a vacation rental.

City of SLT Tourist Core and Commercial Areas
Map of Tourist Core and Commercial Zoned areas within the City of South Lake Tahoe.

The Tourist Core is an area along Hwy 50 from Stateline to Ski Run Blvd. The Tourist Core includes mostly commercial properties and motels, with a few condo complexes mixed in and just a handful of homes. Anything within the Tourist Core or Commercial Zone is processed like an over the counter permit, which is much quicker and simpler process than normal vacation rental permits. Contact us to find out more info on the Tourist Core and what properties are available for sale in that area.

WHAT HAPPENS AFTER MEASURE T?

PERMITS ARE STILL VALID TILL 2021

The portion of the ballot measure regarding the ban within the City limits doesn’t take effect until 2021. But it does make it so the City cannot process any new permits. So basically current vacation rentals can continue to operate, as long as they renew their permits on time before they expire. And then when their permit expires in 2021 they will no longer be able to be renewed.

One item in Measure T that was postponed due to a judges ruling is the change in occupancy. Measure T limits the max occupants of vacation rentals to 12 persons, including children. But a judge ruled that part of the measure should be postponed since it was unfair to currently rental properties that already had bookings set based on previously agreed occupancy maximums.

TOURIST CORE & COMMERCIAL AREAS

How does this affect areas not included in the ban, the Tourist Core and Commercial properties? We have already seen more attention and inquiries on properties located in the Tourist Core. Most of the residential properties in the Tourist Core are condos, such as Lakeland Village and Zalanta. Lakeland Village is a large condo complex that has a beautiful beach and wonderful amenities. It is located right in the middle of town and close to everything, making it popular among owners and renters. Zalanta is a new high-end condo development located right at Stateline next to the casinos and across the street from Heavenly Village and the Heavenly Gondola. The second faze of the Zalanta development will begin construction soon.

There is also a new residential development in the Tourist Core just behind the casinos called Gondola View Estates. It backs the mountain and boarders Van Sickle Park. The properties are high-end townhouse style units, many with lake views. Contact us for information on available units at Gondola View Estate.

For more information, and details on the permit process and a map of the Tourist Core area, go to the City of SLT website VHR page.

POTENTIAL ROAD BLOCK TO MEASURE T

There is a current court battle being fought between a group of vacation rental owners and the city of South Lake Tahoe. The vacation rental group filed the law suit claiming that Measure T is unconstitutional since it allows an owner occupant to rent out their home for up to 30 days, but does not allow a second homeowner the same privileged. The suit says this is discriminatory behavior based on where someone lives.

The judge in the case ruled in April 2020 that he would NOT throw out Measure T, so it still stands as law. The group who brought the law suit has stated they will keep trying to get the measure removed. But as of now it seems they will have to take their case to the appellate court.

Meanwhile, the City of South Lake Tahoe is having to plan for a massive $3 million shortfall due to the loss of T.O.T. (transient occupancy tax) from Vacation Rentals. There is talk within the City to have a new ballot measure that would modify Measure T and re-allow vacation rentals in certain neighborhoods that are close to tourist spots such as the Casinos, Heavenly, and the shoreline of the Lake.

WHAT DOES THIS MEAN FOR BUYERS IN THE CITY?

Contrary to what some think, not every buyer wants to use their Tahoe property as a VHR. About 60% of buyers have no intention to rent out their homes. Since prices have historically been lower in many areas within the City Limits, it is still a popular area to purchase in if you are looking to save some money. In fact it is the cheapest area in all of Lake Tahoe to buy a home. Prices of homes in some “prime VHR” areas within the City have dipped a little after the Measure T ban went into place. But those “prime VHR” areas have seen prices stabilize over the past year and are starting to go up in value once again.

WHAT ABOUT THE AREA OUTSIDE THE CITY?

The El Dorado County area makes up the rest of South Shore on the California side outside the City limits. It includes the Meyers and Tahoe Paradise areas as well as North Upper Truckee Road, Hwy 89 through Christmas Valley, Elks Club Blvd, and most of Pioneer Trail

There are approximately 11,000 single family residential homes located in the County area outside the City Limits, compared to around 15,000 homes within the City Limits. The homes are also much more spread out in the County, and neighborhoods are surrounded by USFS forest land with miles of hiking trails easy to access. 

THE NEW RULES IN THE COUNTY

On August 28, 2018 the El Dorado County Board of Supervisors (BOS) voted in new rules that add to the Counties current VHR Ordinance. The new rules are as follows:

  • Occupancy shall be 2 per bedroom, plus 2 (3 bedroom house has occupancy of 8). Children under the age of 5 are not counted for total occupancy.
  • Enforcement of occupancy is between 10:00 PM and 8:00 AM.
  • Parking rules must be posted during snow removal times. You cannot park on the street during snow removal.
  • Landline phone required if cell phone service is inadequate. There are areas in Tahoe that don’t have cell service, or the quality is very low. A landline phone must be in the home if that is the case.
  • Windows in bedrooms must be operable, with no bars or obstructions that prevent egress. This is important for safety of the occupants in the case of a fire or other emergency in the home.
  • Occupants may be cited and fined for creating a disturbance or violating provisions of the rules. Prior to this new rule, the owners of the home were the only ones who could receive a fine or citation. Now, if the occupants are the ones breaking the rules they can be fined.
  • Local contacts must be certified by taking a test administered by the County. A local contact is required for all VHRs. They must be able to respond in person to a VHR within 30 minutes.
  • Properties are to be inspected by the fire department before being issued a new permit or upon renewal of the current permit. The inspection will most likely be to check for health and safety issues. When a list of items to be inspected is available we will post it.

WHAT MAY HAPPEN IN THE FUTURE?

We wish we could use a crystal ball and be able to tell our clients what will happen. But until that is a reality, all we can do is gather info and use our best judgement to try to predict what “could” happen. Here are a few things that have been discussed and are possibilities in the near future:

  • CAP – A CAP has been discussed in length at multiple BOS meeting in the County. They said a CAP of 900 to 1,000 would be put in place at previous meetings. But they didn’t mention that when they voted on the new rules listed above. It is still a possibility in the future. However, it sounds like the BOS wants to let the new rules go into effect and see if they help before moving forward with a CAP.
  • Saturation – This basically means they were thinking of putting a distance rule in place to “spread out” VHRs so they don’t clump together in neighborhoods. There is a lot of push back on this, and many feel it doesn’t fix any of the issues.
  • Occupancy over 12 – Some of the most complained about VHRs are the larger ones that have 5+ bedrooms. It makes sense that the more people you can put in a VHR the greater the chances there will be more noise and parking issues. There is a slight increase in complaints with the larger homes compared to smaller ones. The new rules that have been discussed would mean a VHR with over 12 occupancy would need to get a special permit. These special permits are more expensive and take longer to process than regular VHR permits.

WHAT DOES THIS MEAN FOR YOU?

At this moment, you can get a VHR permit in the County areas of South Lake Tahoe much easier than the City area (with the exception of the Tourist Core). The County areas have historically held a higher price than the majority of City areas. This is due to the larger lot sizes in the County and more privacy. To see all currently available listings in the County area CLICK HERE.

Buyers are still purchasing in the City Limits even after Measure T was put in place. Basically, people still want to own a home close to the Lake and most don’t really need or want to rent out the property to strangers. Some neighborhoods have had recent price adjustments after Measure T in the City. But homes are still selling and buyers still have plenty of cash to purchase.

The bottom line is if you NEED or WANT to buy a property and use it as a VHR, or you are looking for a quiet personal vacation property, you should talk to us so we can go over your options and find the perfect vacation home for your needs.

WHAT CAN I DO?

What can I do

What you will need is a good agent to help you through the process and answer any questions you may have.  I can help you navigate through the VHR permit process, as I have for many of my previous clients. Our Team is trained and stays up-to-date on the City’s VHR rules and regulations and can handle the process from A to Z.

Give me a call at 530-541-2465 or email me at dan@paradise-realestate.com so that I can go over more details and help you find the perfect Lake Tahoe Vacation Home.

For up-to-date information on Vacation Rentals in the Tahoe area, please check out the main VHR page with all of our other articles on the subject HERE.

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