California voters are considering the controversial tax on vacation homes in the iconic Lake Tahoe area

SOUTH LAKE TAHOE, Calif. — Vacation home owners in Northern California’s South Lake Tahoe could face a significant tax increase if voters in the mountain resort approve a troubled measure on Tuesday’s ballot. affordable housing against private property rights.

South Lake Tahoe, located on the shores of the iconic mountain lake, has approximately 7,000 vacant homes — 44% of the city’s estimated housing units — according to the 2022 American Community Survey. Measure N would levy a flat $3,000 tax on homes that are vacant for 182 days within a calendar year.

The tax would increase to $6,000 for each additional year the house is vacant for six months.

The city is the latest in the United States with a growing debate about the impact of holiday homes. Critics say vacant second homes have worsened the nation’s housing crisis by contributing to a shortage of affordable rentals, especially in expensive resort areas like South Lake Tahoe.

Supporters of the measure say they want to encourage homeowners to rent to workers or pay into a fund for housing, roads and transportation projects. They say the city is repel families because companies have difficulty hiring staff in a region where little land is available for housing construction.

Kelly Bessem works at least 50 hours a week at multiple jobs as a hydrology and land management field scientist and snowboard instructor. She is currently sleeping in her car to buy a house in Markleeville, a 40-minute drive from South Lake Tahoe.

“I’ve done everything I need to do, but it’s still to the point where I’m just squeezing through it,” Bessem said.

Nancy Dunn, a homeowner who has lived in South Lake Tahoe part-time since 2018, is against the measure as unfair and un-American.

“This is my home, and I want to be able to return to it whenever I want, and come and go as I please,” Dunn said as she filled her home with firewood earlier this month. “The American way is to have the right to own property and do whatever you want with it.”

The California Association of Realtors and the National Association of Realtors together contributed $1 million to defeat the measure in a city with just 12,000 registered voters.

While this is still rare in the US, more and more countries are considering a vacancy or vacant home tax to address the workforce housing shortage by tapping underutilized housing to expand the long-term rental market.

In Hawaiithe Honolulu City Council is trying to pass an empty housing tax third attempt since 2018while the Colorado Association of Ski Towns is seeking legislation that would allow cities and counties to ask voters to approve vacant home taxes.

Margaret Bowes, executive director of the Colorado Group, said seaside resorts have few options where they can build. The lack of housing “has reached crisis levels” affecting basic services and commerce “from ski resort businesses to local small businesses,” she said.

Perhaps the best-known example is Vancouver, Canada, which in 2017 imposed a 1% tax on the assessed taxable value of a vacant home. The tax is now 3% and the city says it has generated $142 million for affordable housing projects.

In California, San Francisco and Berkeley passed taxes on vacant properties in 2022.

Vacancy taxes may work to a limited extent in larger cities, but a vacancy tax can make a big difference in smaller cities like South Lake Tahoe, said Shane Phillips, who leads the Randall Lewis Housing Initiative at the University of California, Los Angeles.

He did not know enough about the proposed tax, but is generally in favor of vacancy taxes on holiday homes in regions where there is a shortage of housing. Taxes can be used to discourage harmful behavior, he said, such as taxes on cigarettes.

“And I think a similar argument can be made here, which is that people who consume multiple homes and don’t live in them in communities like South Lake Tahoe … are actually harming other people,” Phillips said.

Measure N has roiled the small community, which with about 21,000 year-round residents is the most populous city around Lake Tahoe and a popular weekend destination. It is located 300 kilometers northeast of San Francisco.

The city has a median household income of $68,000, lower than California’s median of $95,000. The average home sales price was $750,000 in September, up from $427,000 five years ago, according to Redfin.

Modeled after Berkeley’s vacancy taxthe city projects that the proposed tax will take place raise up to $8 million in the first year and up to $20 million per year thereafter.

Amelia Richmond, co-founder of Locals for Affordable Housing, the group that collected the signatures to get the issue on the ballot, said this is an opportunity to ensure South Lake Tahoe doesn’t go the way of other mountain towns with yet higher vacancy rates. .

Property owners would self-report each year, although documentation may be required. There are exceptions to the occupancy requirement, for example in homes that are being renovated.

To avoid the tax, vacation home owners could sell their property, rent it year-round to a tenant, or rent to seasonal travelers or employees. They can no longer offer their homes as short-term rentals after the city voted to shorten rentals to less than 30 days, citing noise and the housing shortage.

Opponents say many of them have scrimped and saved for modest second homes and should not be punished for the region’s lack of affordable housing. They are also angry because as part-time residents they cannot vote on the measure.

Tom Fields, 85, divides his time between a three-bedroom house that he describes as nothing special except for its location on Lake Tahoe and a spot in central Oregon.

“This is crazy and I don’t even know if it’s constitutional,” he said. “If you buy the land and they start taking away the rights, that’s when people get upset.”

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Har reported from San Francisco.