South Lake Tahoe is offering financial incentives to owners of second homes, encouraging them to rent their properties to local workers for extended periods. The initiative, known as the Long-Term Rental Incentive Program (LTR), aims to address a critical shortage of affordable housing in the popular vacation destination.
Under the program, homeowners can receive $4,500 for committing their second home to a 12-month lease or $2,000 for a six-month lease. The primary goal is to increase the availability of long-term rental housing for moderate and low-income households.
Program Requirements and Restrictions
To be eligible, properties must be legally permitted units that meet health and safety standards and be located within the City of South Lake Tahoe. Acceptable properties include single-family homes, townhomes, condos, or even vacant rooms within owner-occupied homes. Crucially, homeowners must sign a lease agreement with qualified tenants for either a six- or 12-month term.
A significant stipulation of the program is that the city will set the rental rates, with a maximum rent of $3,500 per month for units with one bedroom or more. Additionally, the property cannot have been utilized as a long-term rental within the past 18 months.
Tenant Eligibility
Prospective tenants must meet specific income criteria, with their average household income not exceeding 125% of the Area Median Income (AMI). For El Dorado County in 2021, this threshold was $79,688 for an individual. The program also prioritizes renting these homes to working adults, requiring that at least 50% of a home's occupants are adult tenants who work in the South Shore area for at least 20 hours per week.
The city has experienced a dramatic increase in its affordable housing waitlist, underscoring the severity of the housing crisis. This program represents a novel approach to bolster the local housing supply by leveraging existing second-home inventory.