South Lake Tahoe had been wrestling with short-term rental (STR) regulations, and 2025 ushered in another turning point. The court recently overturned the voter-approved Measure T, which once banned most STRs in residential neighborhoods. In response, the City Council enacted a revised Vacation Home Rental (VHR) ordinance. The measure reopens residential areas to STRs, but under a new set of rules.
For property owners and investors, the ordinance creates fresh opportunities alongside stricter compliance standards. Understanding these changes is essential for protecting your investment while staying on the right side of city requirements.
Lake Tahoe Real Estate Market Watch
Recently, South Lake Tahoe homes have been selling within 58 to 66 days. The July 2025 figure shows a balanced market with steady demand. However, Lake Tahoe’s real estate trends can quickly change. If you’re planning to buy or sell, it’s wise to work with an experienced local professional. For personalized guidance, contact Michelle Keck. She specializes in helping clients navigate the Lake Tahoe housing and rental markets.
The Fall of Measure T and the Return of STRs/VHRs
In 2018, voters passed Measure T, a near-total ban on short-term rentals (STRs) in residential neighborhoods outside the Tourist Core. It eliminated about 80% of existing permits but allowed residents to rent their homes for up to 30 days annually. That exemption sparked a lawsuit, and in March 2025, an El Dorado County judge overturned Measure T on constitutional grounds.
The City of South Lake Tahoe opted not to appeal the ruling, effectively reopening the STR market in residential neighborhoods. To prevent the flooding of applications, the City Council imposed a 45-day moratorium on new permits. Legislators are taking this time to develop regulations that address community concerns, property owner rights, and legal standards.
The New STR/VHR Ordinance’s Salient Points
On July 17, 2025, the new VHR ordinance took effect. It establishes a more transparent and enforceable framework for short-term rentals. Major updates include the following:
Permit Requirements
- Operators must acquire VHR permits.
- All online listings or any form of advertisement must include the STR permit number.
Location Rules
- STRs/VHRs must be located at least 150 feet apart from each other.
- STRs/VHRs are not allowed in multifamily properties
- ADU’s are not allowed to apply for a STR/VHR permit
- Attached condominiums that share a wall, floor or ceiling unless that condominium had a STR/VHR permit as of September 1, 2016. Detached condominiums are allowed to apply for a STR permit.
- Deed restricted units prohibiting short term rentals are not allowed to apply for a STR/VHR permit
- For more information on properties allowed to apply for a STR/VHR permit, go to the City of South Lake Tahoe website.
Guest Check-In and Management
- Guests must complete an in-person or virtual check-in.
- Every guest must sign a Good Neighbor Contract.
- Guests must follow city rules on noise, parking, and garbage disposal.
- A local property manager must be available 24/7 and respond within 60 minutes.
- Properties must install Indoor noise monitors and outdoor cameras for trash and parking enforcement.
Occupancy
- Two guests per bedroom are allowed, subject to parking availability.
- Multi-bedroom homes may host an additional five children under age 13.
- Studios are limited to two adults and two children.
Prohibited Uses
- STRs cannot be used for weddings, parties, or commercial events.
Other Requirements
- No two-year waiting period applies after a property sale.
- Properties must pass a defensible space inspection for fire safety.
- The South Lake Tahoe Police Department issues and oversees permits.
- Violations are handled through a tiered system, with the Planning Commission hearing final appeals.
- Three violations in 24 months result in permanent loss of permit.
What’s Next: Permits and Appeals
The city has begun issuing VHR permits in phases. At present, they are prioritizing applications from previous permit holders who maintained good standing before the city enacted Measure T. During this rollout, the city will issue no more than 150 permits per month, with new applications opening once the initial backlog clears.
It’s also important to note that the legal situation may not be fully settled. Having originally supported Measure T, the Tahoe Neighborhoods Group has filed an appeal of the lower court’s decision. Further court rulings could still shape the future of the ordinance. Therefore, to avoid compliance issues, property owners must keep an eye on city updates.
FAQs on South Lake Tahoe’s STR/VHR Ordinance 2025
How much do I need to pay to renew a STR/VHR permit or apply for a new one?
For information of STR/VHR application and permit fee’s, visit the City of South Lake Tahoe’s website. Currently, the VHR/STR application fee for properties outside the tourist core is $548.
The annual STR/VHR fee is based on occupancy.
- 4 or less is $670/year
- 5-8 is $1340/year
- 9-12 is $2680/year
- 13 or more is $3485/year
The property inspection fee is $285.
How long does it take to get a permit approved?
Processing and approval times vary. The city currently caps new approvals at 150 permits per month, so timing depends on application volume. Once your application has been submitted, you will receive an email with instruction on paying your application and inspection fee. Staff has 30 days to review the application and determine whether it is complete. Once your application is determined to e complete, you will receive an email containing the next steps, information about scheduling an inspection, and information about paying transient occupancy taxes. If your application is incomplete, you will be provided with instruction to correct your application and resubmit within 30 days. Applications will be processed in the order in which they are deemed complete.
Are there limits on the total number of STR/VHR permits the city will issue?
There is no permanent cap in place. However, the phased approach ensures compliance and monitoring remain manageable.
Can a homeowner apply for multiple STR/VHR permits if they own more than one property?
Yes, but each property requires its own application and compliance review. The city does not guarantee approval for all properties under one owner.
Are pets allowed in STR/VHRs under the ordinance?
The ordinance does not regulate pets. Property owners may set their own pet policies.
Where to I apply for a STR/VRH permit?
You can apply through the City of South Lake Tahoe’s online portal.
Your STR/VHR Investment in South Lake Tahoe
The South Lake Tahoe VHR/STR Ordinance 2025 not only reshaped the rental market. It also reopened residential neighborhoods to the venture while imposing stricter operating standards. For homeowners, this development means new income opportunities, but also a greater need to stay compliant.
With over 20 years of local expertise and more than $150 million in real estate transactions, Michelle Keck helps property owners navigate the permit process, understand guest requirements, and identify investment opportunities. Michelle’s expertise ensures you can confidently move forward when reactivating a rental or buying your first STR property.
Take the Next Step Toward STR/VHR Success
The new ordinance balances the rights of property owners and the concerns of the neighborhoods. It serves as a fresh start for South Lake Tahoe’s VHR/STR market. You can maximize compliance and the profitability of your investments by staying informed, proactive, and well-advised. Educating guests about proper trash disposal to protect wildlife (bear boxes), to be courteous of residential properties in the area and keep noise to a minimum, and to adhere to parking only in designated spaces (not on the street) not exceeding the amount of cars is crucial to maintaining the integrity of residential neighborhoods, and for STR’s/VHR’s to avoid citations and possible revocation of permits.
Are you ready to start your VHR/STR journey with Michelle Keck? Reach out to her today to discuss the best opportunities in South Lake Tahoe’s short-term rental market.
