My grandparents' vacation cabin in Lake Tahoe is the stuff of legend.
In the '90s, when my parents were just friends, my dad "accidentally" invited himself on a ski trip with my mom and her parents. It was an epic winter when the blizzards created berms as tall as the houses. By the time spring came, my parents were dating.
My grandparents' little house in South Lake Tahoe, which they bought for $113,000 in 1984, quickly became a haven for my family.
I dreamed of getting married there and taking my own kids to the cabin someday. But in May, my mom called to tell me this could be the last year we have the home.
A tax on vacation home-owners might make our place in Tahoe too costly to keep.
A measure on the ballot today proposes an annual tax on every property occupied less than 51% of the year. If it passes, second-home owners would owe $3,000 in 2026 and $6,000 every year after.
In ski towns and cities across the US, home prices have skyrocketed, and young people struggle to pay rent or buy a house. Meanwhile, the wealthy have flocked to mountain retreats where they can vacation and work from home. One of the measure's architects told BI that it will combat this trend by incentivizing second-home owners to rent to local residents, bringing down the cost of housing by increasing the available supply.
Supporters project city revenue gains of $4 million to $8 million in the first year and $10 to $20 million every year after that. The money would go toward rebuilding roads, creating more public transit, and paying the administrative costs of implementation.
Framers of the Tahoe tax measure took inspiration from Berkeley, California, which adopted a vacancy tax this year. The Hawaiian island of Oahu and the Colorado ski towns of Aspen, Vail, and Breckenridge are also considering vacancy taxes.
But some say it's unclear whether the tax will actually lower housing prices for locals.
The opposition in South Lake Tahoe is made up of some of its institutionalized powers, including the local Chamber of Commerce, the South Tahoe Association of Realtors, and the restaurant and lodging associations. In interviews, they told BI that a tax would drive second-home owners away, depriving local businesses of their spending while having no impact on housing affordability for locals. The city's report on the economic outcomes of the tax said it may not actually incentivize homeowners to rent or sell to locals.
Some long-timers feel squeezed: How do they afford to live in these places, and what measures would actually fix the problem? Is it a tax — or is it, say, zoning changes that allow more homes to be built?
Similar battles over housing affordability are happening across the country. I just happen to have a front-row seat to this one.
Since the city of South Lake Tahoe was incorporated in 1965, it's been populated by a healthy mix of year-round and seasonal residents.
Middle- and upper-middle-class mountain enthusiasts from the Bay Area flocked to the city, which, with 21,000 residents per the most recent census data, is more densely populated than any other town around the lake.
This part of Tahoe has long been a relatively more affordable alternative to the ski havens of Colorado and Utah. As of October 2024, the median sales price for homes in South Lake Tahoe was $750,000, according to Realtor.com. By comparison, it was $958,000 in Park City, Utah, $1.4 million in Aspen, and $1.6 million in Vail.
"It's one of these places where you have folks from really different socioeconomic backgrounds," said Amelia Richmond, who favors the tax and leads a group of other supporters called Locals For Affordable Housing. "It's one of the reasons I think mountain towns are so cool."
But that environment doesn't exist without both year-round and seasonal residents in town. Fifty-six percent of Tahoe's 9,125 housing units are filled by renters, while 44% are owner-occupied, according to the US Census' American Community Survey.
Because Measure N will appear on the local ballot, most second-home owners directly affected by the tax can't vote. Nearly half of the property-owning population — my family included — is left watching debates over the tax play out among local residents, who are split on where they stand.
Locals are divided on the tax
Steve Teshara, who has held several roles, including CEO, at the Tahoe Chamber of Commerce, said the tax would hurt the local economy by driving out second-home owners.
He pointed to evidence from a previous measure, which banned Airbnbs and other short-term rentals in certain parts of town. That measure was also intended to stabilize area home prices and rents.
"It has an immediate effect when visitors are not able to spend as much money or when visitors just aren't here anymore," Teshara said.
The previous measure effectively reduced the supply of Airbnbs from 3,350 units in January 2018 to 2,635 units in July 2024, according to the short-term rental data company AirDNA. However, it didn't make the expected dent in housing costs, data from the Realtors' Association shows. Median sale prices continued to increase overall, from $440,000 in 2018 to $750,000 in 2024.
Teshara believes the housing crisis must be solved in the long term, pointing to the local government's affordable housing construction projects. He is a fan of indirect measures currently in place, like vanpooling, which shuttles people who live further away — where prices are lower — through the mountains to work.
Richmond, the pro-tax organizer, said that business from year-round residents is more important to many shops and restaurants than purchases from occasional visitors.
"How many beers do you have to buy to make up that difference when you're up just once a quarter?" she said. "Local economies are actually robust when you have a healthy middle class that can spend small amounts of money on a regular basis."
Taxing second home-owners may not make them rent to locals
The city of South Lake Tahoe conducted an independent study on the tax's economic outcomes if it were to go into effect.
The findings supported Richmond's assertion that the measure could modestly boost sales tax revenue if second homes vacated by owners were converted into permanent residences or long-term leases.
But the report also cautioned that the measure's impact on housing availability will depend largely on how second-home owners react if the tax is adopted — behavior that's nearly impossible to predict.
Second-home owners could sell their properties, like my family is considering. But because of current home prices, buyers would likely be people who don't see an additional $6,000-a-year expense as a deterrent. While the city could collect additional tax revenue from a wealthier population of second-home owners, that wouldn't make it any easier for locals to buy.
Homeowners could also decide to rent and become landlords instead of selling, as Richmond hopes. But that may be a longer shot, the city report found.
Based on the previous leasing programs in the area, "it appears that financial incentives are not particularly effective to motivate owners of vacant property in South Lake Tahoe to rent out their homes for longer terms," the report said.
Some second-home owners told Business Insider they would refuse to rent to tenants.
Sherri Maslyar, who has owned a home in South Lake Tahoe with her husband since 2013 and visits monthly, said she heard a horror story about a neighbor's long-term tenant who defied the landlord's no-pets rule and ruined parts of the house. She said she would rather pay the tax than risk renting her home to someone untrustworthy.
"That's not what we bought the house for," she said.
Tahoe's character — and prices — have changed over the years
The median income in South Lake Tahoe grew 65% from $40,972 to $67,686 between 2000 and 2022, according to census data. In the same period, median home prices in the area ballooned by 288%, from $189,000 to $732,500.
Zillow's rent data, which only goes back to 2020, shows that typical rents in South Lake Tahoe grew from $2,101.52 in October 2020 to $2,653.05 in October 2023. The typical rent as of September 30 was $2,682.50.
The neighborhood where our family's cabin sits was once populated by eclectic A-frames and modest one-story structures, whose kitschy exteriors tended to match the eccentricities of their owners. Now, vaguely chic rustic McMansions with smooth angles and wood finishing are common.
Part of why building more houses or apartments — which might stabilize prices — has been so difficult is due to strict development laws. In Lake Tahoe, all development projects must be approved by the Tahoe Regional Planning Association (TRPA), whose primary objective is conservation, not housing construction.
Jeff Cowen, TRPA's public information officer, told BI the agency's main goals were environmental, adding that "we have to consider community impacts of our regulations." It doesn't have a stance on the tax.
One thing opponents and proponents of Measure N agree on: TRPA's mandate has made it difficult to build new housing in Tahoe to address the housing shortage. But they disagree on whether radical and rapid changes should be made to make Tahoe affordable right now.
It might be the end of Tahoe as we know it
A place that was once accessible as a seasonal destination for a middle-class family risks becoming a playground for the very rich if changes in the Tahoe market continue to make buying a home there relatively unaffordable.
I am benefiting from generational wealth stemming from my grandparents' choices, and I will always be grateful for the investment they made.
My family isn't sure what we'd do if the tax passes. One option is to rent to a long-term tenant, but we'd likely lose the freedom to come and go seasonally. Another is to sell the house.
Either way, we'd be saying goodbye to the home as we've known it for the past four decades.
It's hard to imagine giving up my ties to a place that has such emotional value — that is very much the second home my grandparents intended it to be. And if the tax doesn't do what proponents hope it will, I'd be losing Lake Tahoe for nothing.
All I can do now is wait and see.