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No vacancy: Residents of Tahoe tourist town seek to limit vacation rentals

South Lake Tahoe residents divided over vacation rentals

Feb. 2018: An El Dorado County Supervisors meeting was ended by the fire marshal after too many showed up to talk about vacation rental issue.
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Feb. 2018: An El Dorado County Supervisors meeting was ended by the fire marshal after too many showed up to talk about vacation rental issue.

Loud hot tub parties, overcrowded driveways and trash left by vacationers in this alpine community recently prompted elected leaders to enact tough new rules for landlords.

Now activists are pushing an even tougher ballot measure that would make operating vacation rentals unlawful in much of the city.

The issue pits full-time residents concerned about the impact on their neighborhoods against those making extra income or subsidizing their mortgages by renting out their homes. Over three years, the ballot measure would eliminate 1,400 vacation rentals – or roughly 75 percent of those homes currently licensed as rentals.

“It’s a very hot button issue in our community,” said Mayor Wendy David.

How hot? Last week , when El Dorado County tried to gather community input on the issue, so many people showed up to voice their opinion the fire marshal shut the meeting down. While the city has already taken action – its new rules took effect in December – the county is still considering how to address the issue.

Prior to the formal meeting, attendees were asked to use red dots (bad) and green dots (good) to identify the biggest problems and benefits of vacation home rentals. Some chose to use both colors, but many said they needed only one color.

Lenore Twomey was one area resident who came to the Thursday evening meeting hoping to voice her opinion. She said she didn’t need any green dots.

“There is a real conflict when you have people who have come to party that come to live in our neighborhoods,” said Twomey. She said she recognizes that South Lake Tahoe has always been a tourist community, but wants to keep visitors in the city’s commercial core.

The meeting also attracted people like Mark Salmon, who works for a real estate brokerage. “I wonder if people realize how much tourism dollars support in this community,” he said.

South Lake Tahoe is hardly the only resort community grappling with the encroachment of vacation rentals.

“I don’t think there is a mountain community that isn’t wrestling with this one way or the other,” said Tom Foley, who studies mountain lodging for Inntopia, which provides software and consulting to the travel industry.

In late December, new city rules took effect in South Lake Tahoe adding significant restrictions on existing vacation home rental operators – including a $2,000 fine for over-parking and a ban on hot tub use after 10 p.m.. The City Council also capped the number of vacation rental permits outside the “tourist core area” at 1,400. The tourist core area is a relatively compact part of the city surrounding the casino and shopping district near the California/Nevada border and along Lake Tahoe and Ski Run Boulevard. It does not include Tahoe Keys, a popular neighborhood for vacationers.

“I understand that there is a need for some regulation, but I think they have overstepped,” said Don Strangio of Modesto, whose family has owned a South Lake Tahoe home for 30 years.

“They have instituted a $2,000 fine for a parking violation.”

Under the new rules, renters are subject to a $1,000 fine, while the owner will also owe $1,000, if guests park more vehicles than allowed.

Strangio said if a family rents a home, a one-hour visit (in a vehicle) from Grandma and Grandpa could result in a $2,000 fine. The ordinance makes clear how many vehicles are permitted and requires that the number be clearly posted.

Strangio said he works hard to screen people who rent his place, but he questions the legality of the double fine.

“It’s gone too far and I think they are going to get challenged in court,” Strangio said.

The vacation rental market is multifaceted. There are long-term vacation rental owners like Strangio. There are new buyers who expect rental income to help make the mortgage affordable, and there are large home “McMansions” being built as vacation home rental properties.

Vacation rental limits

South Lake Tahoe has cracked down on vacation rentals outside the city’s core tourist area. A proposed ballot measure would ban them in the rest of the city by 2021.
South Lake Tahoe core tourist area map 
The Sacramento Bee

Vacation home rentals have long been part of the Tahoe economy, but new online tools make it easier than ever for folks around the world to own and rent out a Lake Tahoe property.

“There is an ease of entry into the short term rental market,” said Jerry Bindel of the Lakeland Village resort and the South Lake Tahoe Lodging Association. The association would like to see the city and county adopt a “common sense approach” that uses enforcement to calm residential neighborhoods and steers most of the action to the tourist core area.

Tim Coolbaugh of the advocacy group Tahoe Residents First said doesn’t think the city rules have gone far enough. He said the group wants the county to enact an ordinance with more teeth.

“These neighborhoods have been overrun by de facto hotels,” said Coolbaugh.

Advocates for a ballot measure that would restrict vacation home rentals to the tourist core area have begun collecting the 1,036 signatures needed by June 19 to place the measure on the November ballot.

The measure would phase out vacation home rentals outside of the tourist core area by 2021, while also allowing permanent residents anywhere to rent out their home for up to 30 days a year. Under the measure, vacation rentals in the tourist zone would continue to be allowed. Proponents of the measure Tahoe Neighborhoods Group did not return calls seeking comment.

As of October, of the 1,847 total permitted vacation rentals within the city, 450 were within the tourist core. The 1,397 elsewhere in the city would be phased out under the the measure.

Mayor David said she thinks the city took appropriate action, and she does not support the ballot measure.

“I have concerns,” David said. “Last year (transient occupancy tax) was a significant part of our budget.”

City manager Nancy Kerry said losing the rentals outside the tourist zone would put the city in a self-imposed recession. The city would lose 5 to 7 percent of its general fund as a large chunk of the $3 million in tax revenue from vacation homes disappeared, she said.

There is already talk of a competing ballot measure by people who oppose getting rid of so many rentals. Opponents also point out the property managers, cleaning services, grocery stores, restaurants, rental companies and ski resorts would all see the impact of 1,400 fewer vacation rentals in the market. If just half of those homes are sold, they say, property values will also plunge.

Carl Ribaudo, a who runs the tourism-focused SMG consulting, said the scarcity of housing around Lake Tahoe and community resistance to replacing the area’s aging motels have helped distort the local real estate market and have contributed to the current conflict. The aging hotels are filled with workers who can’t afford anything better. Meanwhile, landlords who own houses prefer the more lucrative vacation rental market.

He’d like to see if the steps the city has taken work before anything more draconian and potentially damaging to the local economy is placed on the ballot.

“Let’s see what the policy does,” said Ribaudo, who lives in Lake Tahoe.

Coolbaugh of Tahoe Residents First said the city would just have to make do with less money. “It will be a necessary reduction to get our neighborhoods back.”

Ed Fletcher: 916-321-1269, @NewsFletch

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