🌲 South Lake Tahoe VHR Updates: What Owners and Neighbors Need to Know in 2026

South Lake Tahoe’s vacation home rental (VHR) landscape has shifted significantly over the past year, and as we head into 2026, it’s more important than ever for homeowners, prospective hosts, neighbors, and local businesses to understand where things stand. From legal battles to new rules and evolving city conversations — here’s the latest.

⚖️ A Turning Point: Measure T Overturned

The biggest shake-up came in March 2025, when an El Dorado County Superior Court judge struck down Measure T — the ballot initiative that had banned many short-term rentals in residential areas outside the Tourist Core. The court ruled that a key part of the measure — a permanent-resident exception — was unconstitutional because it discriminated against non-resident property owners, and that this flaw couldn’t be separated from the law’s other provisions.

That decision effectively reopened the door for vacation rentals throughout most of South Lake Tahoe — but it also set the stage for entirely new regulation rather than a return to the old status quo.

🛠️ New VHR Ordinance Adopted

In June 2025, the South Lake Tahoe City Council adopted a brand-new VHR ordinance to manage vacation rentals responsibly and address common community concerns around noise, parking, and neighborhood impacts.

The updated rules took effect July 17, 2025 and include:

📍 Permit Requirement:All short-term rentals (less than 30 days) must now have a city-issued VHR permit.

📏 150-Foot Buffer Rule:Single-family VHR properties outside the Tourist Core must be spaced at least 150 feet apart — a provision designed to prevent clustering in residential areas.

👨‍👩‍👧 Occupancy Limits:Rental occupancy is capped at two adults per bedroom, with up to five children (13 and under) not counting toward that limit.

👥 24/7 Local Manager Requirement:Permittees must have a local property manager available at all hours to handle guest check-ins and respond to complaints or violations.

📹 Nuisance Controls:Properties must include indoor noise monitoring and outdoor cameras to prevent disturbance issues.

🎉 Activities Restrictions:Weddings, receptions, commercial events, and outdoor amplified music after 10 pm are prohibited.

🅿️ Parking & Outdoor Rules:No parking on unpaved surfaces or neighboring property without permission; no tent camping, RVs, or travel trailers onsite.

These provisions aim to strike a balance between economic activity and preserving neighborhood character.

📅 Permit Rollout and Numbers

When permits first opened:

• An initial 60-day priority application period was available starting June 23, 2025, exclusively for property owners with prior VHR permits or qualified VHR (QVHR) status.

• Afterward, the application window opened to all eligible owners.

• As of late August 2025, the city had received over 1,000 applications and issued about 100+ permits, while hundreds were rejected due to buffer requirements or ineligibility.

Unlike some cities with permit lotteries, South Lake Tahoe does not maintain a waitlist — applications are processed on a first-come, first-served basis as they are deemed complete.

🔄 Ongoing Discussions and Potential Changes

VHR policy isn’t static — the City Council continues to review how the new rules are working in practice. In the fall of 2025 and into 2026, council members discussed possible amendments to the ordinance, including:

🔁 Removing or modifying the 150-foot buffer in favor of a permit cap (e.g., 1,200 total permits)👶 Establishing a minimum guest age (e.g., renters must be 25+)🏢 Allowing condos with HOAs to obtain VHR permits more easily⚖️ Changing the appeals process to involve an independent hearing officer👨‍👩‍👧‍👦 Encouraging “family-friendly” language in rental platforms’ listings🗂 Different rules for residential versus commercial/tourist core areas

Many of these proposals are still under consideration and may shape future updates.

🏡 What This Means for South Lake Tahoe

For owners and hosts, the takeaway is clear: VHRs are back — but under a structured, regulated system. Responsible operation is more important than ever, with formal monitoring, neighborhood-friendly policies, and active enforcement in place.

For neighbors and community members, the new ordinance reflects years of feedback and attempts to balance local quality of life with economic benefits that short-term rentals bring to a tourism-dependent town.

And for future property buyers or investors, understanding the evolving VHR landscape — including buffer rules, permit requirements, and possible future changes — is essential before making decisions in South Lake Tahoe’s competitive real estate market.