Lake Tahoe’s Vacation Rental Law Put on Hold

(CN) — The city of South Lake Tahoe said on Wednesday it would comply with a court order to halt the implementation of a law that set significant restrictions on vacation rentals within city limits.

The law, which could have major precedent implications in how California towns can legislate short term rentals obtained through websites like Airbnb and VRBO, was passed after city residents narrowly approved Measure T by 58 votes in November.

Measure T placed a moratorium on the ability of the city to issue any new vacation rental permits to private residents or business owners seeking to rent out their houses or apartments to visitors and called for the closure of a slew of currently operated short term rentals by 2021. The ordinance applies only to structures outside the designated tourist core.  

Soon after the city began to implement the new restrictions, a group called the South Lake Tahoe Property Owners Group filed suit in El Dorado Superior Court, claiming the law discriminates against property owners who are not “permanent residents” among other issues.

Superior Court Judge Thomas Smith issued a temporary restraining order prohibiting the city from further implementation of that law on Monday and the city announced it would comply on Wednesday.

“Judge Smith’s order delays enforcement of new maximum occupancy limits included in Measure T until at least January 24, when a preliminary injunction hearing will be held,” the city said in a statement issued on Wednesday afternoon. “As such, the City has delayed the re-issuance of all existing VHR permits in residential areas to reflect the new maximum occupancy limits and will continue to enforce the maximum occupancy limits that were in effect prior to Measure T and that are currently listed on all existing VHR permits.”

Lake Tahoe is a heavily visited area with a significant portion of the residences owned as second homes by residents in the Bay Area and other urban areas of California. This fact has always created a tension between the approximately 20,000 permanent residents who live and work in South Lake Tahoe and the seasonal residents and tourists who flock in droves to the recreational haven.

“The city welcomes and appreciates our thousands of visitors annually, and works hard to promote the best possible visitor experience,” the city said in its statement. “At the same time, the city encourages all (vacation rental) owners and their guests to be responsible and respect your neighbors so that everyone can enjoy this exceptional place.”

The traditional complaints over noise, parking and trash disposal that come with vacation rentals in any tourist town are compounded by the fact that Lake Tahoe is situated squarely in bear country, meaning the uninitiated who don’t secure trash properly can attract rogue bears.

These encounters rarely lead to any danger for human beings, but property destruction is common and bears who become conditioned to eating trash are often captured and sometimes shot, outraging the many wildlife advocates that make up a significant portion of the permanent residents in South Lake Tahoe and the other communities that surround the largest alpine lake in North America.

The city says it’s in a tough spot as it is attempting to merely implement a law that was approved by the majority of voters, but will abide by court orders as the matter is litigated in the court.

The property owners who filed the suit made several legal claims that the law improperly intrudes on administrative matters and violates land use laws specific to Lake Tahoe. But the suit also claims the ordinance violates the private property rights of property owners in South Lake Tahoe — rights they say are enshrined in the U.S. Constitution.

Should the property owners prevail on the constitutional claims, it could have major implications regarding a given local jurisdiction’s ability to regulate the burgeoning industry of vacation rentals, particularly as Airbnb, VRBO and other sites make more and more private houses, rooms and apartments available to tourists.

A hearing on Jan. 24 in front of Judge Smith will determine the more immediate future of the ordinance.

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