Owning a vacation home in South Lake Tahoe could get more costly if residents approve a ballot measure that imposes a tax of up to $6,000 on housing units left vacant for more than half a year.
The measure, dubbed the “South Lake Tahoe Vacancy Tax,” aims to penalize homeowners who leave thousands of homes empty in the mountain resort town; the tax penalties would go toward affordable housing, road repair and public transportation. The measure is an attempt to incentivize homeowners to rent properties out rather than leaving them vacant.
Locals for Affordable Housing, the nonprofit leading the initiative, said it collected nearly 2,500 signatures to place the tax measure on the November ballot — more than the 1,159 needed.
“Since January, we have 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 the nonprofit. “The housing crisis has reached a tipping point, with locals forced to leave the community due to a critical shortage of affordable housing.”
South Lake Tahoe is the latest California city to consider a vacancy tax as a way to address a housing shortage. Oakland, San Francisco and Berkeley have approved similar initiatives; voters in Santa Cruz rejected one two years ago. Los Angeles considered a vacancy tax four years ago, but it went nowhere.
Amelia Richmond, who founded Locals for Affordable Housing with Speal, said the tax proposal in South Lake Tahoe is modeled after Berkeley’s initiative. If approved, the city would impose a $3,000 tax on homes that are left unoccupied for more than six months in a year, and $6,000 every year thereafter for repeat offenders. The law, which would go into effect in 2026, would exempt properties under renovation, seasonal cabins, homeowners who are in elder care facilities, those who work as wildland firefighters and residents on military deployments.
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In South Lake Tahoe, a little more than 40% of housing units are used as vacation homes or rentals. In all, there are 16,275 units, and 7,150 sit vacant for most of the year, according to the 2022 American Community Survey and city records.
Proponents say that if 20% of those homes were sold or rented to local residents for six months or more, about 1,430 housing units would be added, while taxes on the remaining vacant homes would generate more than $34 million each year for affordable housing, road repair, and essential services.
A 2022 survey by the Tahoe Prosperity Center, a nonprofit that conducts economic and development research on the Lake Tahoe Basin, found that median home prices had tripled in nine years, from $345,000 in 2012 to $950,000 in 2021, far above what people in the region can afford.
In South Lake Tahoe, the median household income is $67,686, below the state’s $91,905, according to the U.S. Census Bureau.
Researchers with the center noted in 2021 that the region had seen a drop in the number of year-round residents and school enrollments, and a less young workforce. They correlated those decreases to the housing crisis.
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But the proposed tax measure has created a rift among the townspeople, especially between owners of second homes and young workers who say a lack of housing options, low wages and high living costs are pricing them out of the region.
In an effort to defeat the measure, a group of residents, small business owners and real estate agents have formed a coalition called Stop the South Tahoe Vacancy Tax.
“After all the promises from the backers of this measure, voters will be shocked to hear that nothing in this proposal requires the city to produce a single new unit of affordable housing, or even to spend a single penny on housing affordability at all,” the group’s website reads. “We all want to address housing affordability in South Tahoe, but this measure is not the answer, and will likely make things worse.”
Steve Teshara, co-founder of the coalition, said construction of affordable housing in South Lake City has been limited by development standards that dictate where and how much of the area the city can build on.
Teshara said a 248-unit affordable housing project now under construction was made possible only because of an executive order by Gov. Gavin Newsom that opened some types of state land for the development of affordable housing.
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Teshara believes city leaders are doing their best to provide housing.
“But simply throwing money at the problem when there’s not enough land zoned property or not enough density allowed in certain areas isn’t really going to solve the problem, and that’s our principal concern,” he said.
He and others say the measure is a form of taxation without representation, because homeowners who don’t live in South Lake Tahoe won’t be allowed to vote on the measure in November. Opponents also question the city’s ability to enforce the new law.
Richmond said she is worried that second-home owners may try and register to vote using their South Lake Tahoe addresses, even though they don’t live there full time — a violation of election laws.
The division over the measure was visible when residents spoke during a three-hour City Council meeting in February.
“This town has and always will be 40% owned by second-home owners,” Dan Brown, a longtime resident, told the council. “This is what this town has been for [a long] time.”
Dan May, another longtime resident, said he supported the initiative because it seemed fair.
“It gives homeowners a choice, a choice to either live here and participate in our community or pay additional taxes to help support the community that they love,” he said. “And if they don’t agree with it, they have the ability to sell it to someone who does agree with those options.”
Some speakers said the measure put an unfair burden on them to fix the region’s housing crisis. They urged city leaders to find alternative options, such as loans and tapping into state programs to renovate abandoned buildings.
Christopher Rowe, a buyer for a large outdoor store who has lived in South Lake Tahoe for more than 30 years, said that while he understood both sides, he supported the measure.
“The Tahoe property you [bought] 30 or 50 years ago, if the vacancy tax passes, which I hope it does, it will cost you a little more to keep it as an empty house,” Rowe said. “But if you really care about South Lake Tahoe, you should be fine chipping in a little bit, because you have an empty house, and there’s no real way to deny that keeping a house empty in South Lake Tahoe is chipping away at the community and causing a slight detriment.”
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“When you get 40% of the houses doing that, it makes a difference,” he added.
Richmond said the measure is not meant to divide the town but rather is an effort to preserve what she considers to be a more liveable mountain resort than others where residents and workers have been priced out, such as Aspen, Colo., and Jackson Hole, Wyo.
“This isn’t about residents versus second-home owners,” she said. “This is about making it a community for all of us and to make it sustainable and not follow in the trajectory of these other resort towns.”
This story originally appeared in Los Angeles Times.
Source Agencies
