Ordinance would redefine lodging in SLT
By Kathryn Reed
South Lake Tahoe has an overabundance of lodging units. With 26 percent of the more than 5,000 rooms within the 120 hotels-motels being used for long-term rentals, the city is on a quest to change the rental market landscape.
In doing so, it could help the hotel market so the less desirable rooms are off the market and are not dragging down the average daily rate.
Average daily rate for South Lake Tahoe hotels in fiscal year 2013-14 was $127.65, according to the Lake Tahoe Visitors Authority. Those are the most current statistics. That number has been rising since 2009-10, but is still off the peak of $137.11 in 2008-09.
Occupancy in 2013-14 was at 25 percent. Since 2003-04, occupancy has ranged from 20 to 28 percent. Hotel occupancy in a tourist destination should be double those numbers, according to officials. City officials would like an occupancy rate of 60 to 70 percent.
“As far as single occupancy motels, I think any destination is served well with a mix of property types, but we just have more than we need from a demand perspective. And from a visitor perspective, we think he/she is looking for more amenities than that typical property would be able to provide,” Carol Chaplin, LTVA executive director, told Lake Tahoe News.
The single room occupancy ordinance will essentially legalize long-term rentals, even though city officials say that is not the case.
“We are working with TRPA because these are still in essence short-term housing. They are not intended for long term,” City Manager Nancy Kerry told Lake Tahoe News. “They are transient occupancy.”
The city is calling this change a hybrid model.
Property owners will still get to keep their transient occupancy units, which in the Lake Tahoe Basin are a commodity. The Tahoe Regional Planning Agency decades ago created them as a way to control growth. Mission accomplished. However, the unintended consequence is that these properties have a higher value than they would if left to the free market.
What the ordinance is intended to do is address the quality of life for people in these units. Many people are cooking in them, stressing electrical systems that were not designed for this use, and they don’t have laundry facilities.
Rent at some of these places is $900 a month. People are in them because they can’t save enough for first, last month’s rent and a deposit.
Val McClay, 17, lived in the Elizabeth Lodge with her dad and younger brother when they first arrived to town last year. The room had a mini refrigerator and microwave. It was small, pretty clean and didn’t have laundry.
“The best thing about it was it was a place to live. The worst were the neighbors and the people there were not good. They were loud and disruptive,” McClay told Lake Tahoe News.
Current code does not allow inspections of hotels. The proposed ordinance would allow inspections similar to what is done with multi-family residential housing.
One of the problems is the city doesn’t have many places for short- or long-term rentals. That is how the hotels got into the business of providing residential housing instead of tourist accommodations.
“I think the city is creating an opportunity for people such as myself to provide better quality moderate income housing,” Dave Kurtzman, who owns 20 units that would be affected by the ordinance, told Lake Tahoe News. “I am not sure how I will go about doing it. It will depend on what the regulations are.”
His goal, as well as the city’s, is for tenants to have better accommodations.
It will be up to the property owners if they act more like a traditional motel, where paying transient occupancy tax is required, or if they comply with the ordinance to essentially act as a long-term rental.
Kerry hopes the changes will attract capital investors to the area; as well as better align the supply-demand of tourists-hotels and residents-living quarters.
“Government can create policy to help incentivize change. The ordinance is intended to do that,” Kerry said.
Neither Lake Tahoe South Shore Chamber of Commerce’s board nor its Government Affairs Committee hacw taken an official position on this topic.
“There are numerous perspectives in addition to intended and unintended consequences to be discussed and addressed during the process,” B Gorman, CEO of the chamber, told Lake Tahoe News. “There are questions that need to be answered related to the impacts on lodging such as the direct impact these properties have or could have on lodging rates and property values. There are additional community and societal concerns related to the aesthetic impact these properties currently have on the community versus the potential improvements as well as crime, health and safety issues.”
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Notes:
• Single room occupancy ordinance workshop on April 22 at 5pm at South Lake Tahoe Senior Center, 3050 Lake Tahoe Blvd.
• The ordinance should be voted on this spring by the City Council.
• Property owners would have one year from July to become compliant.
Great article on the coming changes to our town! We have too many hotels/motels. I hope these changes help the occupancy rates increase.
Also, the 30 day motels are a hotbed for crime and other safety issues. I look forward to the town being cleaned up.
Maybe next the city can courting developers to provide quality low income housing. We have a problem with our housing offerings on the lower income bracket. Next up on the city docket, slumlords?!
This ordinance will not increase the number of visitor nights, nor will it increase the ADR as the visitors are not staying in these motels. The city is dreaming if they think by doing this they will increase their TOT or ADR. Quite posibly it may have the opposite effect if some of these rooms go back as nightly rentals, with lower ADRs. Though for the life of me i cant see how the city is going to get 70% occupancy unless we bring our hotel rooms down to 2100 total, but wait that would mean that on the nights we are currently sold out we would not have places for the visitors to stay. The real answer is to get more visitors in town and the city does not want to market to do that. BTW occupancy is much higher than 25%, try 39% the morons that are giving this number keep including the 1300 rooms that are being used as long term rentals. Try tthis, on the city’s own reports there were 530k room nights rented divide by 365 days devided by the available rooms of 3700 equals a smug over 39%.
A good mix is what is needed. Too many high priced rooms and not enough people to pay for them- I checked on Trivago.com for room rates July 1, 2015 Mont Bleu $242, Harrah’s $159, The Ridge $199, Lake Tahoe Resort $219. Too many old and tired rooms no one wants to stay in. Do you think… just like anywhere there are too many hotel rooms, golf courses,restaurants, etc. to have a balance for success of all.
More moderate priced, clean rooms in the $100 range. More like Park Tahoe Inn for $125. The timeshare market has also taken away from the occupancy rate.
I agree with Cautious — more moderate-priced rooms are needed, and motels can get fixed up to be able to provide them, and other motels could be repaired to be open for low-cost (& employee) housing. I think the level of “amenities” referred to by LTVA is a little over the top – and maybe those can be provided by the Stateline hotels. Employees who are living on the rediculously low pay rates of $8 per hour are not usually looking for amenities. A nice clean room with a microwave & mini-fridge would likely suffice.
Also, with the focus on a more outdoor-recreational visitor, folks want to bring their toys (bikes, kayaks, etc.) and enjoy more natural-type amenities. Sprinkle in some eating places with outdoor seating, fire-pits, etc and close-by retail, and you will generate sales income. The olden days of gambling and crystal chandeliers is over….
Think of how Tahoe City & Kings Beach are laid out…. Their motels are attractive and inviting.
Start by separating any action the City might take. Use the areas of the city identified in its own Plans.
The issues above are already addressed in both the TOURIST CORE AREA plan, as well as the GENERAL PLAN NODE 2 (Stateline Node) and Neighborhood’s 17 (Bijou Park) and 18 (Stateline Residential) Priority Lists.
Higher hotel occupancy results in more $$ (TOT) for the city. Whether it’s 25% or 39% the city would like 60-70%. By focusing on the TOURIST CORE AREA the city should provide incentives for those property owners to upgrade their hotels to be more attractive to tourists, relocation of current long term renters to move into nearby apartments outside TOURIST CORE AREA which would be better accomodations (neighborhoods 17 and 18 are the closest). The average daily rate should go up if the monthly rental rate, which works out to $30/day or less, is removed from the TOURIST CORE.
If you like disincentives, the city could require TOT collection on all hotel/motel (not built as an apartment) dwellings in the NODE 2. This would most likely result in current monthly hotel room renters moving outside the TOUTIST CORE where there are hopefully more apartments at a similar price and may encourage the TOURIST CORE property owner to invest in their property so they can attract daily paying customers who will pay more.
In addition to the above plan actions, Reloman hit it on the head about getting more visitors to fill the empty hotel rooms. I am continually amazed when I see all the events planned in Reno. They seem to have major tourist attractions going on almost every week throughout the year. Who leads their efforts? Do they wait until a single local business decides to host an event and then advertise it? I doubt that. Who is/are their event coordinator and integrated marketing group?
My impression in SLT is we don’t have the same level of community energy which Reno has found to bring together the city, casinos, supporter of bowling, water ski contests, barbque cook-offs, motorcycle gatherings, old car gatherings, art auctions, etc., etc., etc. to let people know why they should come to Reno and fill their hotels.
How do we find it????
Notice I didn’t mentioned the Lake and Skiing since they don’t need those to attract visitors.
I don’t think you find that energy by simply passing ordinances.
Sounds like it’s nothing more than manipulating numbers/statistics/classifications to hit a certain target.
Let the market decide.
tahoeadvocate, a lot of areas have event co coordinators that help promoters but on events. Some cities like Long Beach even organize the events themselves. Long Beach has one or two events every weekend for 14 weeks in the summer. This city does not have one event that draws tourist that they themselves put on. There are events that the LTVA sponsors like the fireworks, bike races, ect. But the city does not put any money into these things to bring more tourist. Most cities do promote their area but not ours.
Seems that small Virginia City has found a way to create an event infrastructure on top of their mountain. Would it be possible for SLT to create something like this on the airport property discussed a few weeks ago?
El Dorado Beach, now being called Tahoe Commons, doesn’t seem to have the same pull for tourists that Virginia City is looking for. My view of the “Commons” is that if everything is free “they will come”.
http://www.rgj.com/story/news/2015/04/02/virginia-city-build-arena-fairgrounds/70856606/
We simply have way to many motel rooms that will never be occupied. We need to get rid of them and the remaining motels need significant upgrading or to be bull dozed and redeveloped with much higher quality.
Slapshot, you seem to have a clear vision of what you want. Get out your checkbook or borrow the money, buy up what you want to get rid of and clear the land. Then create open space or whatever your vision is. That’s called a market economy with little or no government control. I’ll support you doing that so long as you aren’t asking me to pay taxes to do it since the government knows so much better how to spend my money than I do.
Slapshot, how do you think. We should finance this? The city can’t pay for this as they have huge issues with paying to fix our roads. We can not just bulldoze the buildings without paying the owners. You must remember that many of these owners have their life savings in these properties. The Tahoe Concervancy does plan on purchasing about 200 rooms or more. I agree with tahoeadvocate, we need to increase the number of tourist we bring to town. More tourist more money. That can be used to fixup lodging properties.
More events would really help.
Redefine lodging, This an issue that needs to be looked at by the city and many local agencies.
SLT does have many less motel rooms compared to years ago, but our number of people visiting our area has diminshed as well.
Some of the people living in the motels full time have no other choice as they are working for a very low wage and can’t afford to rent a house.I know this because some of the folks coming to look to rent my low rent place are living in motels, because thats all they can afford.
A sad situation for too many. Our motels were not built to house full time residents.
Being in the motel business off and on over the years I hope this problem can be fixed. Make our town look better and help those needing help to secure a real permanent residence. OLS
The following was posted above:
“This city does not have one event that draws tourists that they themselves put on. There are events that the LTVA sponsors like the fireworks, bike races, etc. But the city does not put any money into these things to bring more tourists. Most cities do promote their area but not ours.”
Promoting events costs money and money for the City is derived from various taxes or from user fees. If the residents of this City don’t want to pay any more taxes and are unwilling to charge/pay user fees for the use of what assets the City has, then that’s that.
You have to have money to make investments to make more money.