Letter: Vacancy tax proposal didn't think of all the ramifications

After spending at least twenty years vacationing annually in South Lake Tahoe, my husband and I purchased a small second home in SLT in October of 2017. We come up to SLT for the summer months and sometimes spend the Thanksgiving and/or the Christmas holidays there. Sometimes we come up for my birthday. If we have family or friends who want to come to Tahoe, we will drive up from Palm Desert where we live (a nine-hour drive) and use our vacation home to house and entertain our visitors.

The amount of time we spend in Tahoe depends on a variety of factors. Sometimes we don’t drive up because the winter weather makes it too risky or difficult. We also stayed away from SLT during the pandemic as we were required to do. My husband had back surgery last October, so we had to wait until mid-December to come to Tahoe after he recovered.

We definitely contribute to the local economy. We buy groceries and gas. We eat out at restaurants. I shop a lot at TJ Maxx. We attend concerts and shows at the major hotels and casinos. My husband likes to go to the golf tournament at Edgewood. Sometimes we have to take our dog to the vet or hire a dog groomer.

We’ve hired locals to do repairs and improvements on our vacation home.

My husband and I are retired. We both worked for over 30 years. We are not trust fund kids, did not inherit huge sums of money, nor did we inherit a Tahoe family home. We are not people from “Silicon Valley” who moved to Tahoe during the pandemic, and we did not pay cash. We have a mortgage on our Tahoe home. We pay close to $7000 a year in property taxes.

We are troubled by and very concerned about the proposed vacancy tax for a variety of reasons.

First of all, our house is on the small side with approximately 1500 square feet. It is a two bedroom, two bath house. There are plenty of homes in South Lake Tahoe that are much larger than our house – homes most likely owned by very wealthy people. Does it seem fair that if we use our house less than six months in a year we would have to pay the same amount of tax as someone who owns a very large house? A $6000 annual tax would probably not be all that painful to the very wealthy. It would definitely be painful to those of us who are just “regular” retired people.

We used to have a rental property in Southern California. We found that being a landlord can be a real nightmare. We never want to have a rental property ever again. We rented the house out to a “nice” young couple who had been referred to us by a neighbor. This “responsible” couple promised that they would take care of our house “as if it were their own.”

Long story short, we had to hire a lawyer to legally terminate the lease with our renters after they did an unauthorized plumbing change that created a slow leak and resulted in a huge mold problem. Most of the kitchen had to be torn out to remove all the mold. The mold remediation cost us $10,000.

Between legal fees and repairs, we spent over $100,000 to fix all the damage to the house and to put in a new kitchen, since what was left of the original kitchen was not salvageable. It was a very stressful and painful experience – one that I never want to go through again. The “nice” renters refused to take responsibility for violating their lease and would not pay for the damage they caused. They found a new place to live but basically “squatted” at our house for two months and did not pay rent. They would sleep at their new place and “hang out” at our property during the day. Renters seem to have more rights than landlords.

My husband and I cannot afford to spend thousands of dollars of our retirement money to repair the damage that renters often leave behind every time they move out. We will go broke. For those of you who support this vacancy tax, why don’t you rent out your own house and see what happens to it? Perhaps you will change your mind once you experience what it costs to make all the repairs.

The house that we purchased in South Lake Tahoe had previously been a rental. There were plenty of things we had to do to clean up and repair the house. We did as much of the work as we could ourselves but some things, such as the carpet, had to be replaced. Why? Because renters put live fireplace embers in a paper bag and placed it on the carpet. The live embers burned through the bag, creating a big hole in the carpet. At least the house didn’t burn down! Renters can and will do foolish things. They just don’t care. Ask any rental property owner what it is like dealing with renters and they all have horror stories.

We don’t want to rent out our house for the reasons I have explained, and spending six months of the year in Tahoe during a calendar year may not always be feasible for us. We base that on how we have been using the house each year since we purchased it in 2017.

I am also afraid our insurance company (that no longer writes new homeowner policies in Calif.) will cancel our policy if we ask to change the insurance designation of our house to be a rental property. They will likely consider it a “new policy” and refuse to give us one. It was very difficult to get homeowner insurance when we purchased our vacation home in 2017 – and that was well before the scary fire in August of 2021. Some of our Tahoe neighbors have had their long-time policies canceled after 20 years. Did anyone proposing this vacancy tax consider the insurance coverage ramifications?

Just how would a vacant house tax be enforced? If we stay at or use the house for at least six months to avoid paying the $6000, how will we prove how long we were at the house?

Has anyone considered how this vacancy tax would impact the real estate market? Would potential buyers of vacation homes be scared off by this tax?
Would property values drop? Would the market be glutted with vacation homes for sale? Why don’t some of you who are so eagerly pushing for this tax buy a house in Tahoe and rent it out? There are plenty of homes for sale in Tahoe. Two houses near ours have been on the market – one for over 125 days. Why isn’t anyone buying them if there is this massive shortage of housing?

We really don’t want to sell our Tahoe home. If we rented our house, what do we do with all the nice furnishings in our house that we don’t want renters to destroy? Would we move everything out, rent the house for several months, and then move back in when we want to use our vacation home? Who would want to rent a house for only a few months and then have to move out and find another place to live? There is so much of this whole scenario that just doesn’t make any sense – mostly because a vacation home and a rental property are two ENTIRELY different things.

I also crunched some numbers. I added up our monthly mortgage, the HOA fees, utilities, cable/Wi-Fi, and annual driveway snow removal. I found that it would cost at least $3600 a month for someone to rent our house. That amount of money does not even take into consideration any allowance for repairs and damage that renters can do. (Believe me, we know!) Is $3600 a month for rent affordable for someone working in the tourist industry in SLT? It sounds rather high to me. Would a potential renter have the money for a deposit that would be large enough to protect the owner financially?

Also, our vacation home is located in the Tahoe Tyrol community. When it was built in the late 70’s, it was designed to be a community of vacation homes.

We have a clubhouse and a community pool. You only own the land that your house sits on – everything else is a “common area.” No one has fenced-in backyards, so there isn’t much of a way to protect kids and pets from the wildlife that frequents the neighborhood if they play outside in the common areas. I constantly have to warn visitors about bears and coyotes that frequent our area. There is also no place to store things outside. The HOA does not allow it.

I just don’t believe that the people proposing this vacancy tax idea have thought through all of the ramifications carefully. I did see one lady discussing it on the Reno news one night and she tried to make it sound so easy and simple. The whole thing is far from simple! The news story certainly did not include the other side by asking a vacation homeowner about the impacts of a $6000 annual tax.

We all know that the Lake Tahoe area is a huge tourist area. Any tourist area is ripe for vacation homes. I know there are a lot of complicated factors as to why there is a shortage of “affordable” housing. It wasn’t just one thing that caused it. But it seems to me that singling out vacation homeowners and “punishing” them with a vacancy tax to solve a problem they did not cause by themselves -- is just plain wrong.

I would think that many of us vacation homeowners are registered to vote in other places. If this proposed tax initiative gets on the November 2024 ballot, we will have no voice and will not be able to vote against it. Who is going to stand up for us?

- Teresa Barnwell
Palm Desert, CA