South Lake Tahoe Vacancy Tax to go on the ballot in November

The story was updated on May 17 concerning the 50 percent plus one rules on required votes.

SOUTH LAKE TAHOE, Calif. - The proposed vacancy tax measure in South Lake Tahoe has made it to the November 2024 ballot after the El Dorado County Registrar of Voters verified the 2,471 signatures submitted by Locals for Affordable Housing were sufficient. Only 1,159 valid signatures were needed.

The measure is titled "An Initiative measure to establish a tax on owners of vacant residential units in the City of South Lake Tahoe."

It is a controversial measure with the community split over how the tax would be applied should it pass. If a residential unit is vacant more than 182 days per calendar year, the owners would be taxed $3,000 for the first year of being vacant for one-half of a year or more, and $6,000 per subsequent year of being vacant for one-half of a year or more, starting January 1, 2026.

The South Lake Tahoe City Council turned down the proposed tax by a vote of 4-1 earlier this year, prompting the group, Locals for Affordable Housing, to take on the signature gathering to get the measure onto the ballot.

The tax would apply to "various types of residential units," including houses, apartments, and one or more rooms "consisting of separate living quarters."

All owners of homes in the City of South Lake Tahoe would have to prove each year that they live in their homes. The City would have to create an audit of the thousands of dwellings, according to the measure.

According to the verbiage in the measure, "Units would not be considered vacant when an occupant using the unit as their principal residence is
hospitalized or absent while serving as a firefighter, emergency service worker, or in the military, when the residential unit is uninhabitable because of natural disaster, renovation, or construction, or because of
the death of the owner who was the sole occupant, or during a declared emergency."

Proponents estimate that $34 million per year will be raised through the tax. As a dedicated special use tax, these funds can be used for local housing, road infrastructure, transit, paying back bonds, as well as fighting any possible legal battles and costs of implementing the measure. The measure does not state what percentage of collected taxes would go to housing.

A vote of fifty percent plus one would be needed to pass the special tax. All funds raised have to go to what is written in the measure:

Under The Taxpayer Protection and Government Accountability Act, "No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote." This does not currently apply to citizen initiatives, which have a simple majority threshold to pass Special Taxes. There is a constitutional amendment being proposed this year to change this, but that is not currently in effect. This table summarizes the current vote requirement and proposed changes.

The City of San Francisco goes to court at the end of 2024 over its vacancy tax. Opponents call the tax "overreaching" and call the City "Big Brother, telling what owners can and can't do." Napa, Santa Cruz, Oakland, Washington, D.C., and Vancouver, Canada have vacancy taxes already in place.

During their last meeting, the South Lake Tahoe City Council voted unanimously to have data collected for a report under Election Code 9212 that would show the fiscal impact should the measure pass. Staff will investigate several areas including the cost to implement the tax, how it would affect funding for infrastructure, the effect on use of land, its effect on the internal consistency of the city’s general and specific plans, Its impact on the community’s ability to attract and retain business
and employment, the effect on vacant land, and its impact on agricultural lands, open space, traffic congestion, existing business districts, and developed areas designated for revitalization.

"This is the City's only opportunity to get information out to the public if it hits the ballot," said Mayor Cody Bass. "The City cannot spend any money on resources for campaigns, but this is allowed under the elections code."

The Council will vote on the report by its June 18 meeting.

The purpose of this report would be to provide the electorate the opportunity to make an informed decision on a proposed initiative.

“Since January, we connected with thousands of community members outside local grocery stores and in neighborhoods across the City, and were met with widespread support and gratitude that something was being done to address the skyrocketing cost of housing,” said Nick Speal, co-founder of Locals for Affordable Housing, the non-profit organization leading the ballot initiative. “The housing crisis has reached a tipping point, with locals forced to leave the community due to a critical shortage of affordable housing.”

For more information on the vacancy tax, visit https://www.tahoevacancytax.com/.