What’s going on with Vacation Rentals in South Lake Tahoe?

The 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 the area. 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 are currently the most strict of any area around Lake Tahoe. There are more VHRs 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.

Most of the new rules don’t apply to properties located within the Tourist Core, an area along Hwy 50 from Stateline to Ski Run Blvd, or Commercial Zoned areas. 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 still processed like an over the counter permit. Contact us to find out more info on the Tourist Core and what properties are available for sale in that area.

What Are The New Rules

THERE IS A CAP

The biggest change is the total number of VHR’s outside the Tourist Core area is capped at 1400.  So that is now the magic number, 1400.  Currently, the CAP has been reached and there are 1400 VHR permits outside the Tourist Core area. A wait-list was created, and it currently has 130 applications waiting in line (first come, first serve). On average, about 8 VHR permits drop off in a month. Sometimes it is more, sometimes less. Some of the people on the wait-list decide they aren’t ready for a permit and ask to be put at the end of the line. But using that average we think it will take about 2 years to get a permit once you get on the wait-list.

NEW FINES

The new rules went into effect on December 22, 2017 and were updated on August 21, 2018. Both the owner of the VHR property and the guests can be fined between $250 to $1,000 for a violation of the City’s Vacation Home Rental ordinance.  They got rid of the warning for the first rules violation.  Three fines within a 24 month period will result in revocation of a VHR permit.

THE NEW RULES

  • Occupancy being 2 per bedroom, plus 4 (a 3 bedroom house would be allowed 10 occupants)
  • Hot tub use banned between 10 pm and 8 am
  • Excessive noise is banned between 10pm and 8am
  • No special treatment for applicants in escrow (they used to go to the front of the line)
  • Bear boxes shall be installed in all homes with a vacation home rental permit (some exceptions for HOA and multi-unit dwellings)
  • Camping is prohibited on VHR properties, includes sleeping in an RV or tent
  • Owners of homes with a VHR permit are required to inform guests of the requirement to comply with all aspects of the City’s VHR ordinance

5 community service officers will be hired to help patrol the neighborhoods and answer calls for permit violations.  This should help ease some of the locals concerns, and provide a faster response time.

For more information, go to the City of SLT website VHR page.

VOTERS MAY DECIDE ON A FULL BAN

A group of locals has submitted an initiative to the ballot in November 2018 for a complete ban on VHR’s outside the Tourist Core within a 3 year timeframe.  The group feels that the City has not done its job. Instead of the 1400 cap on VHR’s they want to see zero in residential neighborhoods.

The local REALTOR Association has had talks with this group to try and reach a compromise. But a compromise could not be reached, and the ballot initiative is moving forward. If it passes, it would create a demand and value increase for properties located in the Tourist Core. New projects are currently being built in the Tourist Core for high-end town homes and condos that can be VHRs.

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. Most want the option to rent out their home as a VHR, even if they don’t really want to do it currently. Even with the CAP in the City we have still had a lot of buyers purchasing vacation homes. Some end up putting in a VHR application and going on the wait-list. Others are just going to use their property as a personal vacation home for now. Prices of homes in some “prime VHR” areas have been affected by the CAP and the potential of a Ban. But for the most part the market is still good.

And there are areas in the City where you can still get a VHR permit that aren’t subject to the CAP. These areas are mostly in the Tourist Core mentioned above, as well as the lakefront town-home development of Sierra Shores.


What about the area outside the City Limits?

El Dorado County is also making changes to its VHR ordinance. The area makes up the rest of South Shore on the California side outside the City limit. They have been holding community outreach meetings, and have made a few changes to their rules at recent Board of Supervisors meetings. Some local county residents are upset, similar to the group in the City. This group also want to see a ban on VHRs. As of now the County is simply modifying their rules and no Ban or CAP is in place.

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 we 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.

TALK OF A BAN IN THE COUNTY?

A group of locals living in the County area of South Lake Tahoe have also been talking about a Ban, similar to the initiative in the City of SLT. There are more challenges to doing a ballot initiative in the County vs the City. It would take a vote of the ENTIRE County and not just those who live in the Lake Tahoe area of the County. As of now, it looks like they are going to wait and see what happens with the City ballot initiative. Then they will make a decision after the voting results are in. Based on the info we have received, if a Ban doesn’t pass in the City the chances of it passing in the County are slim.

In the meantime the County Board of Supervisors has adjusted their rules. This is an effort to make them balanced between the locals and VHR owners/renters. We feel so far the Supervisors have worked well with the community and have reached good compromises.


What does this all means for you?

At this moment, it is easier to get a VHR permit in the County areas of South Lake Tahoe 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. But some people would rather own a property closer to shopping, the Lake, and the Casinos. So the City areas may be more attractive to them. And VHR income is higher in areas that are closest to the Lake, Casinos, or Ski Resorts… which are mostly in the City limits. But as the belt tightens on vacation rentals in the area, the demand continues to go up. The homes further away from the “prime” spots will probably see their rental income go up as well.

Buyers are still purchasing in the City Limits even after the CAP 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 the CAP 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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