Lake Ta­hoe short-term rental ban up to vot­ers

San Francisco Chronicle (Sunday) - - FRONT PAGE - KATH­LEEN PENDER

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.”

Pho­tos by Jes­sica Chris­tian / The Chron­i­cle

Many of the homes that are listed on web­sites in­clud­ing Airbnb and VRBO are on the water and have pri­vate docks.

Sup­porter Peggy Bour­land says Mea­sure T is not a ban, but a “repo­si­tion­ing of va­ca­tion rentals” out­side South Shore’s core tourist area.

Sharon Ker­ri­gan, a No on T cam­paign vol­un­teer, can­vasses a neigh­bor­hood. The mea­sure’s op­po­nents have raised far more money than sup­port­ers have.

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