For the past few months, the City Council has been working to reintroduce vacation home rentals (VHRs) following the repeal of Measure T. Their efforts are commendable—there has been real progress on several practical, balanced changes.

However, the latest proposal to use a buffer system instead of a permit cap is a step in the wrong direction. It randomly blocks previous permit holders from reinstating their VHRs and will have serious, unintended consequences that were not fully understood when the idea was introduced.

During deliberations, councilors often referenced a table from an old staff report that shows the number of permits that each buffer length would achieve. This table represents itself (and was received by the council) as an accurate target that would likely be achieved. In truth, this table is mathematically inaccurate and should not be used to set policy. 

Buffers may sound simple, but their effects are unpredictable, random, and complex. The results can not be predicted by a single number, as the referenced table claimed to do. The number of permits depends on lot dimensions, lot use, and—critically—the order in which applications are received. 

To understand this, consider the case where there is a VHR every 150’ as allowed throughout town. This is the theoretical maximum, about 1288 permits as represented by the staff table, and as unlikely as hitting the lottery. But equally possible is the case where there is a VHR every 300 feet, now each parcel’s 150 buffer touches, and there is no qualifying lot in between. This would lead to about 400 permits total. That number declines even further if qualifying lots between VHRs don’t claim a permit (USFS or they just don’t want one). Same buffer, vastly different outcomes. A 150’ buffer could lead to anywhere from 300 to 1200 permits, with a median likely around 600. The only way to forecast this is with an expensive computer simulation, and even that would only give a median value with a large possible variance, still not useful to guide policy.

The impact is amplified in places like Tahoe Keys, where lots are unusually narrow. One VHR there could block 20 to 35 other properties from qualifying.

Consequences of this unpredictability and massive reduction in expected permit numbers include:

  • It undermines the original compromise. Three council members have voiced opposition to buffers and support for a cap of 1400 permits as in the previous ordinance. The 150’ buffer was a well-intentioned compromise to achieve 1288 permits. As the information this decision was made on is fundamentally flawed, the compromise needs to be revisited.
  • It makes planning impossible. The city can’t accurately set fees, staffing levels, or enforcement resources without knowing how many permits will be issued.
  • Transient Occupancy Tax (TOT) will be far lower with less permits 
  • The economic boost to local business will be massively reduced also.
  • It’s unfair to previous permit holders. Many—perhaps 30% to 70%—may lose their opportunity to return due to the same complexity and randomness. This opens the city to expensive and divisive legal battles.
  • It creates policy paralysis. If the buffer is too strict, reducing it could cause a sudden flood of new permits, potentially exceeding the council’s goals. A cap is the only way to ensure stable and predictable permit numbers.

Even more concerning (to both sides of this debate) is the unintended migration of VHRs the buffer coupled with not honoring all previous permits (no buffer exception) will initiate. Historically the majority of permits were in Heavenly, Tahoe Keys and a few other “touristy” areas. The buffer would exclude many of them from returning (particularly in the Keys) and allow few new permits in those areas. Bijou, Al Tahoe, Sierra Tract and the like will have fewer former permits returned and many more new properties eligible to become VHRs. 

Consequences include:

  • Reduced local housing. Affordable homes in “local” neighborhoods will be converted into vacation rentals.
  • Displacement of residents. Property owners may evict tenants to convert homes to VHRs.
  • More disruption. VHRs will be scattered throughout more densely populated neighborhoods where more residents could be affected.
  • Lower TOT per permit. The migration will mean less larger, higher value homes in Heavenly and Keys operating as VHRs. The earning potential of the smaller homes in “local” neighborhoods is much lower and the TOT returns would also be lower.

We need a VHR ordinance that’s fair, predictable, and effective—one that maximizes benefits while minimizing harm. That means keeping permits concentrated in second homes  and neighborhoods that aren’t suitable for long-term housing, and which generate the most revenue with the least disruption.

A buffer system does the opposite.

The solution is simple. Start with the old ordinance 1114, it was long considered and negotiated and was working well from 2018 to 2021. In parallel instigate sensible, constructive edits, set a simple cap, family occupancy limits, video and sound monitoring, local management standards and a fully funded and strong enforcement.

Let’s not let flawed information lead to a lose-lose compromise being implemented when a simple win-win is there for the choosing.

-Duggan Smith, South Lake Tahoe

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