San Francisco Chronicle - (Sunday)
Lake Tahoe short-term rental ban up to voters
Long before Airbnb and VRBO came along, people had been renting vacation homes in South Lake Tahoe. The classified section of The Chronicle on May 1, 1962, advertised a new, four-bedroom cabin in South Shore near the beach that sleeps 10, with a fireplace and “thermo heat,” for $125 a week. The phone number had just five digits.
But the growth of online rental agencies has created a bitter rift in the city between those who like vacation renters and the dollars they bring, and those who say they are disrupting neighborhoods and making it hard for full-time residents — many of whom work in
lower-wage restaurant, hotel and ski resort jobs — to find affordable housing.
On Tuesday, the town of about 22,000 that attracts 5 million visitors per year will vote on a measure that would eliminate all short-term rentals — those 30 days or less — outside the “tourist core area” after 2021. There are about 400 licensed vacation rentals inside the tourist core and almost 1,400 in residential neighborhoods outside the core.
The city estimates that it could lose up to $4 million a year in tourist taxes, permit and other fees if Measure T passes. That ignores any loss of property tax revenue if many owners sell their vacation homes and prices fall. Opponents predict an economic decline as renters find vacation homes elsewhere.
“The people pushing Measure T have a problem with anybody else being there. They want Tahoe all for themselves, and that’s not really the kind of place Tahoe is,” said Steve Teshara, CEO of the Tahoe Chamber, a South Shore business group. Proponents say Measure T would boost the city’s hotels and motels and strengthen the community by attracting more full-time residents. “I cannot allow the issue of tax revenue to be the determining factor in making decisions for the city,” said Bruce Grego, one of nine candidates running for three City Council seats. Grego, a former councilman, said he is the only candidate who unequivocally supports Measure T.
If it passes, the 1,400 vacation rentals outside the tourist core could continue operating through 2021, but if they are sold or the owners exit the business before then, that permit could not go to someone else like it can now. After three years, any remaining ones would lose their permits, although they could rent for more than 30 days. There is no limit on vacation rentals in the tourist core and commercial zones. The tourist core generally runs along Highway 50 from Stateline to a little west of Ski Run Boulevard.
One provision of the measure would take effect 10 days after results are certified. It would reduce occupancy limits on short-term rentals in residential areas. The current limit, of two people per bedroom plus four per home, would be reduced to two per bedroom, period. No sleeping in lofts or living rooms. And no home could have more than 12 occupants, regardless of size.
This could affect some reservations for Thanksgiving and beyond, said Maureen Stuhlman, who investigates vacation rentals for the South Lake Tahoe Police Department.
If the measure passes, “we don’t want to impact (existing reservations) unfairly unless we really have to,” City Attorney Heather Stroud said. “Some enforcement discretion will have to be used.”
The measure would let permanent residents rent out their homes to tourists for up to 30 days per year. It’s silent on residents who rent rooms to guests while they are home.
Most of the 1,400 homeowners who would be affected by the measure can’t vote on it because their primary residence is outside the city. Only 23 percent of homeowners in the Lake Tahoe Basin, which includes South Lake Tahoe and surrounding neighborhoods, claim it as their principal residence for property tax purposes. About 64 percent of homes elsewhere in El Dorado county are claimed as a primary residence, according to the assessor’s office. Opponents of Measure T have raised $365,000, compared with less than $2,000 by proponents
Some resort towns have tried to rein in vacation rentals gradually, by imposing a moratorium on new permits and not renewing them when a property is sold or goes out of business. Others have proposed more extreme measures.
Pacific Grove, on the Monterey Peninsula, has an initiative on the November ballot that would prohibit short-term rentals in residential areas outside the coastal zone, and phase out existing ones within 18 months.
In June, Palm Springs voters overwhelmingly rejected an initiative that would have phased out short-term rentals in residential areas over two years. Palm Springs has a little more than twice the population of South Lake Tahoe and about the same number of licensed vacation
rentals.
In late December, responding to complaints, officials in South Lake Tahoe capped the number of short-term rentals outside the tourist zone at 1,400 and imposed stiff new rules to curb noise and parking problems. If a guest parked one too many cars, the guest and the property owner would each be fined $1,000.
After a wave of publicity, some fines were relaxed. Now a parking violation costs the owner and occupant $250 each, but use of a hot tub after 10 p.m. will set each back $500. If a vacation rental gets three upheld citations in 24 months, its license is revoked.
Before those regulations could be evaluated, a group of residents called Tahoe Neighborhoods Group began collecting signatures for Measure T.
“It’s not a ban, it’s a repositioning of vacation rentals where the zoning is more compatible with that kind of use,” said Peggy Bourland, a member of the group. She objects to the “whole swath” of McMansions being built as vacation rentals in neighborhoods.
Tourists displaced by Measure T could stay in hotels, motels or homes in the tourist core, she said. A report commissioned by the city said the annual average vacancy rate for hotels and motels was 68.5 percent in 2016, down from 75.3 percent in 2012. There are few homes in the tourist core, but Bourland said more condos and townhomes could be built there for visitors.
Opponents say vacationhome renters want kitchens and gathering spaces and are unlikely to rent motel rooms. And even if they did, there are not enough rooms during the ski and summer seasons to accommodate everyone. “Most hotels in the summer are 90-plus percent occupancy,” said Jerry Bindel, general manager of Forest Suites and a director of the South Lake Tahoe Lodging Association.
The association, which represents hotel and motel owners and some property managers, opposes Measure T, although some members support it. The association would rather “allow what is already in place to work, and maybe through attrition over time, seeing what the right number (of vacation rentals) is. To go to an all-out ban is a precarious position. You don’t know what ripple effects it will have,” Bindel said. Michael Wharry, who owns and lives in the 24-room Alder Inn, supports Measure T but understands both sides. “I see it is going to be a negative impact for a couple of years. I also see that (vacation rentals) haven’t helped Tahoe.” He said most vacation-home owners live outside Tahoe and the money they make “is delivered down the mountain.” When people rent homes, “they stock up at Costco before they get here. They don’t want to pay the mountain premium, which I totally understand. But small towns like Tahoe depend” on their spending.
“I want to see jobs and real families move to Tahoe, but there is no place for them to move,” Wharry said. When he moved his family from Texas, they bought the Alder Inn because they couldn’t find permanent housing.
After 45 years in hotel management, Peter Evenhuis moved to South Lake Tahoe five years ago and bought a rundown four-unit apartment building. He and his wife live in one unit, rent one to a fulltime tenant for $800 a month and rent the other two to tourists. He spent about $200,000 fixing it up, made possible by the short-term rentals, which each bring in an average of $2,500 per month. (The city subsequently banned vacation rentals in multifamily buildings but his was grandfathered in.)
If Measure T passes, “I’m lucky because I can convert it back to regular apartments,” he said. People who have a house “all of a sudden are faced with paying the mortgage themselves. Some might be able to afford it. Some will go underground,” some will let friends or co-workers stay there.
Palo Alto Realtors Harry and Charlene Chang own a vacation home in South Lake Tahoe that they use sometimes and rent out four or five times a month during the high season. If Measure T passes, “at some point I think we would sell it,” Harry said.
Joe Brennan’s family started renting vacation homes at Tahoe when he was a child. A few years ago, he bought one himself. Now he brings the family up from San Francisco and rents through a management company when he’s not there.
If Measure T passes, “I would still own it. I might turn it into a seasonal rental” for a few months at a time. If he does a long-term rental, “it would only be to someone I know. But with the kind of rental rates up there, I’m not sure it would be worth it.”