South Lake Tahoe City Council to look at increase of taxes and fees to provide more affordable housing

SOUTH LAKE TAHOE, Calif. - The South Lake Tahoe City Council will receive presentations and provide possible direction during its next meeting on a potential increase to the Transient Occupancy Tax (TOT) and a potential Real Estate Vacancy Tax to support affordable housing in the city. They will also discuss possibly enacting an inclusionary housing ordinance to include an in-lieu fee.

There is no disagreement that affordable housing is needed in the community. To address this the City has numerous projects and programs already in place including the Sugar Pine Village, Lease to Locals, Riverside Drive housing, and other uses of surplus land for housing.

The meeting is on Tuesday, May 2 at 9 a.m. in Council Chambers, 1901 Lisa Maloff Way. It can also be viewed on Zoom.

Council hired a consultant last year to conduct a study on the possibility of new city-wide funding sources to provide new revenues for building affordable housing. They provided the analysis of local funding source(s) for housing initiatives in January 2023. Since then, staff to conduct additional stakeholder engagement on these two possible taxes.

The identified stakeholders range from a broad array of industry groups, service providers, and agencies as well as anyone who needs and/or lives in a home, particularly those who are facing housing instability.

From these stakeholder meetings, there was a general acknowledgment that
there is a need to fund the City’s housing initiatives but not an agreement on the best way to do that.

The council will be discussing a possible two percent raise on TOT to 14 percent city-wide instead of just the tourist core area which could raise a possible y $1.8-2.2 million annually. The other option they will discuss is a possible $3,000 annual fee for each vacant housing unit. Based on the current number of units held for seasonal or occasional use, this option could generate approximately $16.8 million annually.

Inclusionary housing in-lieu fees would be paid by those building townhomes and single-family homes. To encourage housing for those with lower incomes, fees would be higher for luxury homes than those for the type of housing the City wants to see. There is no estimate on how much could be raised until the Inclusionary Percentage for each type of housing is determined to offset housing impacts.

For the full agenda and instructions in both English and Spanish on how to participate, visit https://www.cityofslt.us/84/Watch-City-CouncilCommission-Meetings.