Tough new vacation rental law takes effect in City of South Lake Tahoe

The City of South Lake Tahoe is cracking down on short-term vacation rentals with a restrictive new ordinance, additional staff, and outside experts to help with monitoring and enforcement.

The new law went into effect Dec. 22 and includes a $1,000 fine for both renters and owners for violations. Violators will no longer be given warnings before they’re fined for breaking the rules.

The city’s efforts send a strong signal to South Lake Tahoe vacation rental operators that the city is serious about controlling the industry and enforcing rules ranging from hot-tub operating hours to lodging tax collection. To avoid hassles and severe penalties, owners need to understand the rules and get compliant.

Those rules include a “three strikes” provision in which rental owners who have three violations within a 24-month period can permanently lose their permit to offer short-term rentals. The city has also set a cap on the number of short-term rentals in the city (outside of the tourist core) at 1,400. Other rules include:

• No excessive noise, especially after 10 p.m.
• No outside hot-tub use between 10 p.m. and 8 a.m.
• No street parking by renters
• No commercial events or weddings allowed in vacation rentals
• Trash must be kept indoors or in a bear-safe box

Short-term vacation rental operators must also be licensed and renew their registration every year.

Unlike legislation in many communities, South Lake Tahoe’s law comes with a commitment to enforcement. City law enforcement, code enforcement, and the planning department are working together on enforcing short-term rental regulations, and the city has hired three new staffers focusing solely on short-term vacation rentals.

The city has also hired an outside company, Host Compliance, to help with identifying and monitoring vacation rental operators as well as tax collection. Host Compliance will also run a 24-hour hotline for complaints about rentals. The city is paying the company $118,400 a year, which is expected to be offset by increased tax collection and fines.

Short-term rental operators in South Lake Tahoe are required to collect a transient occupancy tax of 12 percent of the cost of accommodations from their guests and pass those tax revenues on to the city. For certain redevelopment properties, the transient occupancy tax is 14 percent.

Although Airbnb collects lodging taxes on behalf of its hosts in some California cities, it does not collect them in South Lake Tahoe, and neither do other listing platforms such as VRBO or HomeAway. That means that short-term rental operators are responsible for registering, collecting taxes from their guests, and filing tax returns and remitting taxes to the city.