Tahoe City, CA…Placer County moved closer Tuesday to limiting the number of short-term rental permits in the tourism-focused region of North Lake Tahoe, one of several proposed refinements to its short-term rental ordinance aimed at addressing community concerns and preserving workforce housing availability.

The county Board of Supervisors unanimously approved Tuesday’s first reading of an ordinance that, if adopted, would replace the current short-term rental permit ordinance codified in County Code Chapter 9, Article 9.42. If adopted by a final vote next month, the changes will take effect 30 days later and apply as the application window for the 2022 STR permit cycle opens April 1.

Hotels, motels, timeshares, bed-and-breakfasts and condotel properties offered as hotel-type lodging would not be subject to the ordinance.

“I want to thank our community for being so engaged in the lengthy process that has resulted in these changes,” said Board Chair and District 5 Supervisor Cindy Gustafson. “The short-term rental market has profound positive and negative impacts in our community and continues to evolve quickly. We are fully committed to keeping an open dialogue about what’s working and what isn’t so we can continue to adapt this regulation to best balance the rights and concerns of everyone involved.”

The ordinance would cap the number of short-term rental permits at 3,900 – accommodating existing permit holders and previously approved exemptions that will need to apply for a permit, and allowing for properties operating without an STR permit or active transient occupancy tax certificate to come into compliance with the proposed STR program. Permit holders would be required to rent their STR for a minimum of 30 nights a year to discourage the limited number of permits from going unused.

The proposed ordinance also includes a provision that exempts owner-occupied property with a STR from the cap but still requires the owner to obtain a permit and otherwise comply with the ordinance.

Further clarifications in the proposed ordinance would continue the county’s ongoing adaptive approach to addressing community concerns with STRs by enacting the following: increasing the frequency of fire safety inspections, expanding the enforcement period for noise violations and more than doubling the potential fine amounts for violations of the ordinance, among other provisions. The proposed ordinance also clarifies the requirement that all STR operators must obtain not only a STR permit but also a transient occupancy tax certificate and a business license from the county.

Since the original STR ordinance went into effect in January 2020, the board has approved several updates to address community concerns. On July 27, 2021, the board adopted an urgency ordinance establishing a moratorium on the issuance of new STR permits and extended it Aug. 31, 2021. The moratorium remains in effect until March 31.

If the ordinance is adopted, implementation of the updated STR program will include ongoing evaluation; tracking success metrics and seeking engagement from a planned stakeholder task force. Board members also requested annual updates on the program for the immediate future.

Housing costs for local workers, already high in the region, have continued to skyrocket throughout the pandemic, with the median home sale price more than doubling since April 2020.

An independent economic analysis commissioned by the county concluded the growing share of second homes used as short-term rentals in the region is likely contributing to the increase in housing costs for local workers. The cap on STR permits is intended, in part, to help prevent the further loss of local workforce housing inventory and limit the potential increase in nuisance issues with more STRs.

The proposed ordinance is one of several county efforts to address escalating housing challenges, staff explained in its presentation to the board. A number of new workforce housing projects and programs are under development, and the county remains focused on incentivizing more hotel development to reduce pressure on the local housing inventory.

The additional inspection requirements and ongoing evaluation of the program may increase the costs to the county for management and enforcement, staff reported. Should a permit fee increase become necessary to offset those costs, a fee revision would be brought forward to the board for further consideration at a later date.