Potential VHR ban could stall new recreation complex in South Lake Tahoe

South Lake Tahoe voters went to the polls on November 8, 2016 and approved Measure P, a Tourist Accommodation Tax (TOT) increase of two percent to fund a new $25 million recreation complex in the city.

Now that new center is at jeopardy.

Visitors staying in South Lake Tahoe vacation home rentals (VHRs) and motels/hotels contributed $2,228,431.51 in 2016/17. During that fiscal year $245,688.38 was collected because of the extra two-percent approved by voters (less than 12 months of Measure P funds). So far in 2017/18, $839,103.92 has been collected in restricted Measure P funds. Over half of this amount comes from VHRs managed by property management companies and individual home owners.

With such a large percentage of TOT coming from VHRs, City staff is worried about being able to fund a recreation center. TOT income would be reduced due to a lack of enough motel and hotel rooms available in the City limits to accommodate enough of the guests that would be displaced.

"We are actually working on a staff report to bring this issue back to the City Council as an update," said acting City Manager, and Fire Chief, Jeff Meston when asked about the status of the recreation complex. "We do have concerns about the pending VHR ballot measure and feel at this time it is prudent to be cautious."

A group of citizens is currently circulating a petition to bring the matter of VHRs to the voters in November. They state they want their neighborhoods back and to keep the VHRS out of them by phasing them out over a three year period. They want only residents of South Lake Tahoe able to rent their own homes for up to 30 days a year.

The citizen group claims the motels and hotels in SLT could start charging more due to a lack of competition, thus making up the TOT difference.

Because of the uncertainty of the vote in November on this initiative, the City Council will be deciding if getting a $25M bond to build the new complex should be put on hold and wait to see the effect of the vote.

The matter is not yet scheduled for a City Council meeting.