South Lake Tahoe's Vacation Rental Ban Overturned: What It Means for Homeowners and Locals
South Lake Tahoe’s long-standing debate over vacation home rentals (VHRs) took a significant turn this week. On Thursday, El Dorado County Superior Court Judge Gary Slossberg struck down Measure T, effectively reviving the vacation rental industry in residential neighborhoods.
What Was Measure T?
Passed in 2018 by a narrow margin, Measure T sought to phase out VHRs in South Lake Tahoe’s residential areas by the end of 2021. The measure allowed full-time residents to rent their homes for up to 30 days per year but restricted non-residents from short-term renting their properties.
It was this 30-day rental provision that Judge Slossberg ruled unconstitutional, citing a violation of the Dormant Commerce Clause—a law that prevents states and cities from discriminating against interstate commerce. Since this provision was integral to Measure T, the judge determined that the entire measure had to be overturned.
While Measure T banned VHRs in residential areas, it still permitted them in the tourist core and industrial zones of the city.
Legal Battle and Homeowner Pushback
Shortly after Measure T’s passage, the South Lake Tahoe Property Owners Group challenged its constitutionality, arguing that it violated property rights and unfairly discriminated against non-resident homeowners. Their legal battle took them to the California Court of Appeals, which upheld the city’s authority to ban VHRs. However, the case was eventually sent back to El Dorado County Superior Court, where it was ultimately overturned.
What’s Next for Vacation Rentals in South Lake Tahoe?
Now that Measure T has been struck down, city officials face a new challenge: regulating vacation rentals in a way that balances neighborhood preservation, housing affordability, and economic interests.
South Lake Tahoe Mayor Tamara Wallace sees this as an opportunity for city leaders to rethink how VHRs should be managed.
“This is a huge opportunity for the Council to be real leaders to address the issues while allowing them back,” said Wallace.
She referenced a prior plan proposed by former City Manager Frank Rush, which suggested allowing VHRs within 1,000 feet of navigable waterways and ski resorts—a zoning approach that might help manage the industry more effectively.
Meanwhile, the South Tahoe Chamber of Commerce is pushing for better enforcement and updated regulations to ensure a fair system for both residents and homeowners.
Economic and Community Impact
With the overturning of Measure T, many locals are celebrating the potential return of jobs and revenue.
“We are happy locals can go back to work at hundreds of jobs like snow blowing, house cleaning, gardening, painting, etc.,” said Duane Wallace, CEO of the South Tahoe Chamber of Commerce. “The city will also regain Tourist Occupancy Tax (TOT) funds, which help fix roads, support safety services, and fund housing initiatives.”
Vacation rentals have long been a popular lodging alternative to hotels in South Lake Tahoe, and the city has been regulating them since 2003. Over the years, ordinances have been revised to address concerns about traffic, noise, and trash, with enforcement funded through TOT revenue.
Will the City Appeal the Ruling?
Following the judge’s official entry of judgment, the South Lake Tahoe City Council will have 60 days to decide whether to file an appeal. Until then, the fate of vacation rentals remains in the hands of city leaders, business owners, and residents.
Stay tuned for updates as this story develops!
Citation: Peterson, Paula. "Vacation Home Rental Ban Overturned in South Lake Tahoe." South Tahoe Now, 2025, https://southtahoenow.com/03/13/2025/south-lake-tahoes-vhr-measure-t-overturned-in-court
