On May 6, 2025, the City of South Lake Tahoe introduced a new ordinance to update its Vacation Home Rental (VHR) regulations following the court’s invalidation of Measure T. Key changes include reducing the number of VHR permits outside the Tourist Core, banning VHRs in multifamily dwellings in most areas, requiring local property managers for 24/7 compliance, and strengthening enforcement. The ordinance also introduces stricter occupancy limits, a two-year ownership requirement before applying for a permit, and updated fee structures.

Ordinance Amending Vacation Home Rental Regulations Outside Tourist Core.

Background

Measure T, passed in 2018, had prohibited vacation rentals in certain areas of the city, including residentially-zoned neighborhoods, multifamily dwellings, and newly added Tourist Core areas. While Measure T was upheld in earlier legal challenges, the Superior Court recently ruled that the “permanent resident” exception in the Qualified VHR provisions was unconstitutional. Because these provisions were not severable, the entire measure was invalidated.

In response, the City Council chose not to appeal the decision and enacted a temporary moratorium on issuing VHR permits in affected areas. The new ordinance proposes a series of amendments to the city’s pre-Measure T regulations to address longstanding community concerns.

Summary of Ordinance Amendments

Cap on VHR Permits

  • Reduces the maximum number of VHR permits outside the Tourist Core from 1,400 to 900.

Multifamily Dwellings

  • Prohibits VHRs in all multifamily dwellings outside of commercial and Tourist Core Area Plan areas.
  • Amends definitions to clarify dwelling types and excludes time-shares.

Local Property Manager Requirement

  • It requires the designation of a local property manager or owner responsible for 24/7 compliance.
  • Managers must respond in person within 60 minutes and conduct in-person check-ins with a signed rule acknowledgment.

Monitoring and Technology

  • Property managers must maintain real-time data from noise and video monitoring devices for each VHR.

Enforcement Enhancements

  • VHR properties must comply with operational conditions at all times.
  • Owners and occupants can both be cited for violations.
  • Evidence from third parties may be used for citations if accompanied by a signed affidavit.
  • The three-strikes rule remains in place for permit revocation after three upheld violations within 24 months.

Permit Oversight and Appeals

  • Permitting authority shifts from the Director of Development Services to the Police Department (via the City Manager).
  • The Planning Commission becomes the final decision-maker for permit denial and revocation appeals.

Occupancy Limits

  • Adjusts occupancy to two persons per bedroom plus two (previously plus four) for properties outside the Tourist Core.

Defensible Space

  • Adds a requirement for inspection and compliance with defensible space standards prior to permit issuance.

Two-Year Waiting Period

  • Requires a two-year ownership period before applying for a VHR permit following a property sale, with certain exceptions.

Permit Preference

  • Establishes a future resolution to allow a 30–60 day priority application window for former VHR and Qualified VHR permit holders in good standing prior to Measure T.

Permit Fees

  • Directs staff to ensure VHR permit fees cover the full cost of administration and enforcement. A resolution updating the Master Fee Schedule is expected on May 20, 2025.

Environmental and Financial Considerations

The ordinance is exempt from the California Environmental Quality Act (CEQA) as it poses no significant environmental impact. Financially, the updated VHR program is expected to be self-funded through permit fees and will also generate additional Transient Occupancy Tax revenue.

Next Steps

The urgency ordinance extends the current moratorium through June 19, 2025, allowing time for the new ordinance to take effect. A second reading of the ordinance, along with consideration of the resolution establishing the application process for prior permit holders, is scheduled for May 20, 2025.

We understand these regulatory changes can be overwhelming, especially if you’re planning to rent out your property or invest in Lake Tahoe real estate. We’re here to help you navigate the new permitting process, ensure compliance with the updated VHR ordinance, and make informed decisions whether you’re buying, selling, or managing a short-term rental.

If you have questions about how these changes affect your property or future plans, don’t hesitate to reach out at [email protected] or (530) 317-0373.