EASTERN LAKE TAHOE, Nevada (October 22, 2023) – In a recent Thursday meeting, the Douglas County Commissioners delved into the potential financial implications of a proposed ban on Vacation Home Rentals (VHRs), an initiative driven by local residents and scheduled for a 2024 voter decision. The prospect of this ban has raised concerns about significant annual revenue losses, with an estimated impact of a staggering $2.106 million for the county. This total includes $1.294 million derived from the Tourist Occupancy Tax (TOT) and $881,000 in various fees and charges.
The VHR Dilemma: The commissioners find themselves in a challenging position, grappling with a complex decision. If the ban is approved, it could lead to travelers seeking available hotel rooms. However, this creates a nuanced situation as the peak demand for VHRs often coincides with the busiest months for hotels. Additionally, the youth athletics segment, a significant part of the Tahoe Events Center’s clientele, typically does not opt for casino accommodations. To assess net losses, the county has factored in a projected nine percent increase in hotel occupancy.
Notable Hotels and Repercussions: Prominent hotels in Douglas County, situated around Lake Tahoe, include Edgewood Tahoe, Zephyr Cove Resort, Pine Cone Resort, and timeshares. The potential repercussions of the VHR ban extend to services for seniors and parks and recreation, a concern voiced by Commission Chair Mark Gardner.
Room Tax and Financial Impact: In the previous year, Douglas County collected a substantial $4.49 million in room tax, which includes revenue generated from casino lodging properties. Of these funds, $1.02 million was allocated to support county parks and recreation, $297,000 was designated for the Tahoe Transportation District, and $2.7 million was dedicated to lake promotions, among other crucial allocations.
Unconsidered Factors: It’s crucial to note that the commissioners could not account for the $5 per night surcharge in Tahoe Township, which contributes to repaying the Tahoe Events Center bond, amounting to nearly $289,000 in the preceding year.
Fiscal Impact Discussion: Throughout the discussion, the commissioners and the public were reminded by the district attorney’s office that the primary agenda was to analyze the fiscal impact in case the citizen petition secures voter approval.
Repercussions Beyond Finances: The proposed VHR ban could have financial implications not only for those employed in the industry but also for entities like the Tahoe Douglas Visitors Authority and Lake Tahoe Visitors Authority.
Possible Shift and Speculation: If the measure is passed, only one currently active VHR in Tahoe Township will be allowed, specifically the unit above Dart Liquor. There are ten potential locations in Tahoe Township that could become eligible as VHRs, primarily in commercial areas at the bottom of Kingsbury Grade.
Room Permits and Availability: Currently, there are 580 permits for the Tahoe Township area of Douglas County, out of approximately 5,600 dwellings. The maximum permissible permits stand at 600. If the ban passes, the measure could lead to a shift of VHRs to the valley floor area of the county, broadening the scope of VHR operation into select commercial and tourism zoning areas, including the valley.
Data Challenges and Uncertainty: The commissioners acknowledge that estimating potential losses is challenging, given the volatility of room tax revenue. Factors like a significant decline in gaming revenue, the pandemic, increased day-trippers, fluctuating room rates, and weather and road closures have contributed to this uncertainty.
Unregulated Rentals and Enforcement: Commissioner Wes Rice highlights the importance of considering the potential return of unregulated vacation rentals if VHRs are eliminated, necessitating ongoing enforcement efforts.
Differing Opinions and Hotel Occupancy: Commission Chair Mark Gardner expresses concern about an $811,000 loss in fees generated from permits, which fund enforcement and sheriff’s deputies. However, Commissioner Danny Tarkanian suggests that casino room occupancy may increase as VHRs decrease, mitigating revenue decline.
Unresolved Questions: The evidence is inconclusive regarding whether Douglas County vacationers would automatically transition to casino hotels for their outdoor recreational vacations.
Public Input and Disagreements: The meeting saw public comments reflecting diverse viewpoints. South Lake Tahoe Councilman Scott Robbins argued that TOT revenue increased following Measure T, citing higher room rates and increased usage. He advised the commissioners not to be swayed by what he considered flawed information from pro-VHR advocates.
Conclusion and Ongoing Debate: These discussions reflect the complexity of the decision to permit or ban VHRs in Douglas County, with far-reaching implications. Ultimately, the commissioners voted 3-2, with Tarkanian and Walt Nowosad opposing the motion that the citizen initiative might have an anticipated financial impact on Douglas County if passed.
Accompanying Statement: With the motion’s approval, the commissioners must also adopt a statement that would accompany the initiative should it receive sufficient signatures for the November 2024 ballot. This statement will illustrate a net loss from fees of $881,865 and a TOT loss of $1,294,678, resulting in a total estimated loss of $2,106,543.
