No new vacation rentals: Placer County passes urgency ordinance amid Tahoe housing crisis

Placer County is putting a hold on new short-term rentals.

In a vote Tuesday, the Placer County Board of Supervisors voted in favor of a moratorium on new short-term rentals — the kind of rentals popular on sites like Airbnb and VRBO — in an effort to curb the loss of housing in the already stressed Tahoe Basin.

“The COVID-19 pandemic has also exacerbated the housing crisis that the Tahoe region has experienced for years,” meeting documents said. “Over the last decade, the rise in second home ownership and (short-term rentals) in the region has continued to grow, resulting in a decrease in available housing stock for the local workforce.”

The board passed the urgency ordinance prohibiting new permits from being issued to vacation rentals. Existing permits can still be renewed.

The county has issued 2,350 permits in 2021, which is “approximately 400-500 additional properties” that have engaged in renting since last year, meeting documents said. County staff have also reported receiving numerous calls from people seeking more information about short-term rental permits, saying they were in the process of buying a home with the purpose of converting it to a short-term rental.

The decision by the board comes on the heels of a historic summer season for Tahoe Basin residents, in which a unprecedented bleed of local workers has forced many businesses to reduce hours significantly.

The value of a typical home in South Lake Tahoe rose by about $181,000, or 41%, to $624,000 between June 2020 to June 2021, roughly double the pace of growth in the rest of the Sacramento metro area, according to Zillow.com. Since January 2017, the city has only issued about 100 building permits for new housing units, according to the U.S. Census Bureau.

Home values have increased elsewhere around Lake Tahoe, though not as quickly. All California ZIP codes surrounding Lake Tahoe saw home values increase between 20% and 34%.

Placer County Supervisor Cindy Gustafson, who represents the North Lake Tahoe region, told The Sacramento Bee last week that the lack of housing around the lake has become an “emergency.”

“It’s a crisis at the affordable level, but it’s also at the middle-income level, and that’s part of the tragedy,” she said. “You lose that segment of the community, and you become the haves and have-nots.”

The moratorium was passed as an urgency ordinance, making it a temporary ban so that county officials can review its short-term rental policy and make permanent revisions to it.