Scott Sonner, Associated Press
(AP) — City officials have postponed enforcement of new restrictions on short-term vacation home rentals at South Lake Tahoe after local property owners filed a lawsuit saying the unconstitutional rules are wreaking havoc with out-of-town families who plan to spend the holidays at the mountain resort.
The South Lake Tahoe Property Owners Group filed a lawsuit Wednesday in California's El Dorado County Superior Court seeking an emergency injunction blocking implementation of a ballot measure city voters narrowly approved in November.
A new cap on the number of people who can stay in rental homes that officially went into effect on Thursday infringes on the constitutional rights of property owners by arbitrarily restricting the number of individuals who can occupy a vacation unit, according to the suit that lawyer Andrew Pierce filed on behalf of the group.
"The holiday plans of thousands of visitors are in jeopardy and local property owners and local rental agents are facing a crisis because many vacation groups have already made airplane reservations, rental reservations and placed deposits based on current occupancy limits," the lawsuit says.
A hearing on the matter was postponed Wednesday afternoon when Judge Michael McLaughlin cited an unspecified conflict of interest and recused himself from the case.
A new hearing is pending, and the city council plans to discuss the matter after the first of the year. But in the meantime, City Manager Frank Rush Jr. said they won't enforce a new cap on the rental home capacities as long as renters don't violate other rules aimed at stemming neighborhood disturbances.
"We are not going to take a hardline approach given the fact that many people already made reservations for lodging and transportation — in some cases many months ago," Rush told The Associated Press Thursday. "The only time they would be cited for the maximum occupancy limit would be if they were cited for another disturbance such as noise, parking or hot-tub use."
The cap that technically went into effect Thursday limits occupants to two for every bedroom, with a maximum of 12 people total. Violations can carry up to a $1,000 fine.
The ballot measure also permanently bans most short-term vacation rentals in residential neighborhoods outside downtown South Lake Tahoe beginning in three years. It comes in response to growing concerns about parking congestion and noise at rental homes on the alpine lake, a popular ski destination on the California-Nevada line.
The ban effective in 2021 affects more than 1,300 short-term rentals outside the commercial tourist corridor. Permanent residents still can rent out their property up to 30 days a year.
The city estimates the ban will cost about $4 million annually in tourist tax dollars.
An estimated 400 short-term rentals inside the corridor are exempt. The ban doesn't affect neighboring Stateline, Nevada.
The measure passed with only 50.4 percent of the vote, 3,517 to 3,459.
Pierce couldn't immediately be reached for additional comment on Thursday.
On Wednesday, however, he said: "There are groups of 14 people from the San Francisco Bay Area who have rented a house that is permitted to have 16 people and now they are being told they can only have 12."
The overall initiative also "discriminates against people who are not so-called 'permanent residents,' " Pierce said.
"If you live in South Lake Tahoe seven months of the year you can continue to have vacation home rentals indefinitely," he said. "But even if you have owned a house there for 20 or 30 years but only live there five months of the year ... those people cannot. It's a violation of due process and vested rights."
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