South Lake Tahoe Hosted Rental Ordinance back to staff for revisions

SOUTH LAKE TAHOE, Calif. - City Council made another attempt to create a Hosted Rental Ordinance but they decided at their meeting Tuesday to hand back to staff for some revisions.

After much discussion they decided to have staff clean up rules that could be potential loopholes for homeowners and/or tenants. This is the second time a first reading has been turned down for more fine tuning.

The following changes were added for Council to review October 20:

(1) Increase the required tenancy for a tenant to qualify as a hosted rental applicant from six months to two years;
(2) Include a cap of 200 hosted rental permits in the City;
(3) Not allow hosted rentals to operate in multifamily dwellings;
(4) Not require that hosts go over the performance standards in person at check in;
(5) Not count children 5 and under towards the occupancy limits;
(6) City shall not provide notice of a forthcoming permit expiration date; and
(7) Define Building and Fire Code compliance and to include a
checklist specifying the requirements as part of the application; and
(8) Specify the penalty for operating an unpermitted hosted rental.

Council asked that list to be tightened up even more.

Since the passage of Measure T during the last election, Vacation Home Rentals (VHRs) are being phased out in the city limits in 2021 except for those in the Tourist Corridor. There have been many homeowners or VHRs turning to obtaining business licenses to operate as Shared Rentals. Because of this, Council knew an ordinance had to be created to outline rules and regulations.

Not all council members are in agreement that a tenant should be able to rent out a room on a short term basis, instead leaving that decision to the homeowners.

"Maybe start out with the homeowner as the only person with a hosted rental and it must be their primary residence," said Councilmember Brooke Laine. "Look at adding renters later."

She and Councilmember Cody Bass agreed also that the ordinance needed to be a clear blue line and leave no room for abuse of the system.

Laine also said they should start out slow and make sure all is going as it should before expanding the program.

Several members from the public called in during the discussion to voice their displeasure at the Council even contemplating an ordinance. While Measure T does not allow VHRs on an ongoing basis it does allow for a local homeowner to rent out their primary residence up to 30 days a year. It is unclear at this time how the 30 days per year would be tallied or enforced.

Peggy Bourland of the Tahoe Neighborhoods Group that led the campaign to ban VHRs in neighborhoods said they think the proposed ordinance is a workaround by the City to allow vacation renters again. She said the concept of shared rentals to include the tenants being able to rent a room out in a home they are renting changes things. If there is an ordinance it needs to be permanent owners only, she said.

"We shouldn’t be allowing renters to sub-let homes," said local Jerry Goodman. "This is taking away possible housing for locals."

Council candidate Scott Robbins said this would be an ordinance with unintended consequences and said he sees the benefits going to landlords.

"I appreciate the Council’s good intentions," Robbins said. "But you need to think of locals, and prevent more skyrocketing rents."

A shared rental ordinance would allow people to rent a room, or rooms, inside a home that is occupied by the homeowner, or the tenant, depending on what wording the next draft contains. The responsible person would have to be there to greet the renter during their stay, but not necessary at check in, to explain rules, and be at the home the stay of the visitor.

There are many concerns that VHR owners are already thinking of the workarounds of a new shared rental ordinance, one that allows them to rent homes without really being there.

Council made sure staff adds points including the home must be the permanent residence of a homeowner applying for the permit, or if they end up allowing tenants to rent out, that this person has a two-year lease.

Hosted rental regulations would minimize the potential for nuisances associated with hosted rental operations in residential neighborhoods while simultaneously preserving a reasonable opportunity to offset housing costs by operating a hosted rental, said the City staff report. Hosted rentals may provide an affordable alternative to hotel stays for visitors to South Lake Tahoe and generate transient occupancy tax for the City.

"Hosted rentals will get a slew of new problems without enforcement," added another caller during the meeting.

Mayor Pro Tem Tamara Wallace gave a scenario that a person could only afford to live in a home in South Lake Tahoe if they had vacations in their extra bedroom from time to time. Mayor Jason Collin added that he rents out a home to tenants who have been there for ten years and would trust them to rent out a room on a short term basis.

Staff will work on another edition of an ordinance and bring it back to Council.