The El Dorado County Superior Court has overturned Measure T, the voter-approved initiative that sought to restrict vacation home rentals (VHRs) in residential zones within South Lake Tahoe.
Measure T, passed in November 2018 by a narrow margin, aimed to phase out VHRs in residential areas by December 31, 2021, while permitting them in designated commercial zones and the Tourist Core Area. The measure also included an exception allowing permanent residents to rent their properties on a short-term basis for up to 30 days per year.
The South Lake Tahoe Property Owners Group challenged Measure T's constitutionality shortly after its enactment, arguing that it infringed upon property rights and discriminated against non-resident property owners.
In June 2023, the California Court of Appeal for the Third Appellate District upheld the city's authority to ban VHRs in residential zones but raised concerns about the measure's exception for permanent residents, suggesting it might violate the dormant Commerce Clause by favoring local residents over out-of-state property owners.
The appellate court remanded the case to the El Dorado County Superior Court to address these specific concerns and the lower court concluded that the permanent resident exception was unconstitutional and that this provision could not be severed from the rest of the measure, leading to the invalidation of Measure T in its entirety.
This ruling revives the possibility for property owners to obtain VHR permits in residential zones, effectively reverting to the regulatory framework that existed prior to Measure T's adoption.
Additionally, legal experts suggest that this decision could open the door for potential lawsuits against the City of South Lake Tahoe, as affected property owners may seek damages for lost rental income and other financial impacts resulting from the now-overturned restrictions.
City officials are currently reviewing the court's decision to determine the appropriate course of action.Â
