SOUTH LAKE TAHOE, Calif. – The citizen’s ballot initiative Measure N, also known as the Tahoe Vacancy Tax, has had a bumpy ride as far as the text goes. Like many measures that go up for vote, there are portions that are written to be legally defensible, but can be largely unclear for the average reader. To clarify some of those elements, the Tribune has gone through the text (which can be found in full here) to answer some of the common questions people have.

What actually counts as a residential unit?

As defined in the text, a residential unit is “a house, an apartment, a group of rooms, or a single room that is designed as separate living quarters. Separate living quarters are those in which the occupants live and eat separately from any other persons in the building and which have a kitchen and direct access from the outside of the building or through a common hall.”

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Under the same stipulations, residential units don’t include hotels, accessory dwelling units or junior accessory dwelling units, units in operational nursing home or residential care facilities, or units exempt from property tax under section 214(g) of the California Revenue and Taxation Code.

How is vacant being described?

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Measure N counts the days that a property is unoccupied, not the days it’s occupied. Vacant in this case means unoccupied for more than 182 days, either consecutively or nonconsecutively.

When would the tax take effect?

If passed, the Vacancy Tax would take effect on January 1, 2026.

If I’m a renter, who would pay the vacancy tax?

The person who owns the vacant residential unit would be responsible, which means renters would not be responsible for paying the vacancy tax. In addition, there can’t be more than one tax per residential unit, even if multiple people own the property. Each owner would be jointly liable for the highest amount of tax payable by any owner.

Who’s in charge of the vacancy tax?

There are three different entities who would be in charge. First, City Council would be responsible for making decisions on how the funds are distributed. Second, enforcement of the tax would primarily be overseen by the city manager, who is appointed by the mayor and City Council. The city manager can also specify designees to help with this. Lastly, the vacancy tax specifies that there must be an oversight committee, which would help inform City Council on the use of funds.

What’s the difference between exemption and exclusion?

Exemptions are reasons that the city of South Lake Tahoe wouldn’t be able to impose the vacancy tax, while exclusions are reasons that a residential unit would be counted as occupied during a time it was vacant.

The exemptions listed in Section 3.60.040 are organizations exempt from income tax; federal government, city, state, municipal corporation, district, and other political subdivisions of the state; residential units that don’t have year-round access due to seasonal road closures (existing prior to January 1, 2024); and residential units that lack suitable insulation or heating for winter living, as long as they were constructed before January 1, 2024.

The exclusions listed are a care period for the occupant of the residential unit, a civilian service period (for firefighters or other emergency service workers), disaster period (up to three years following a natural disaster that would cause a residential unit to be uninhabitable), an emergency period (as declared by the City Council by a two-thirds vote for periods of 60 days), military service, owner death (up to two years), and a rehabilitation period of renovation or construction on the building that would render the building uninhabitable. The exclusion period does not currently contain text that would cover the primary occupant of a residential unit leaving to take care of an ill family member.

The exclusion and exemption periods are both amendable according to Section 5 of the measure.

How is the city tracking vacancy/occupancy?

The major outlined way that the city would keep track of occupancy is through a filing of a Declaration of Occupancy. Every owner of a residential unit or representative authorized to act on their behalf must file this document annually.

The Declaration of Occupancy document itself is not strictly defined in the text, but must include a means to declare the residential unit as vacant, not vacant, or subject to an exemption, which could include the submission of supporting documentation.

The text also describes that there must be a website or online portal that explains the tax and allows electronic submission as well as a paper declaration form which explains the tax and allows mail or in-person submission.

Nowhere in the text does it say that the city or any designees of the city would be allowed to surveil properties to track vacancy/occupancy.

Why would the city be allowed to audit properties for up to five years?

In Section 3.60.060(b), the text states that the City Manager or their designee shall establish reasonable processes for auditing residential units to verify the Declaration of Occupancy. It states, “Audits may take place at any time for up to five (5) years after the applicable calendar year.” This provision was put in place to disincentivize lying on the Declaration of Occupancy form for multiple years in a row. These audits would only take place after January 1, 2026, since that’s when the vacancy tax would take effect if passed.

Other measures that disincentivize lying on the form include a penalty of 100% of the amount owed for each subject year that a false declaration was made, as well as a possible increased penalty for owners who make repeated false declarations. The city may also charge the owner of a residential unit for audits that reveal that taxes were unpaid.

How can the vacancy tax be spent?

Section 3.60.090 establishes that “all revenues generated by the Residential Vacancy Tax, together with any interest and penalties, shall be collected each fiscal year and deposited into [a special fund]. Revenues in the Fund shall be used exclusively to carry out the purposes of this act as specified in Section 3.60.100.”

Section 3.60.100 states that the special fund may be used for housing purposes, roadworks and related infrastructure, transit projects and related infrastructure, and reimbursing the city for administrative costs of establishing the collection of the tax and continuing costs of administering the tax. The funds may also be held in reserve and accumulated for spending in subsequent years for the stated purposes.

In the housing section, the money may be spent on construction of housing; purchase of property within the city to create new housing opportunities; paying property owners to add deed restrictions to property; purchasing property that contains existing housing to continue its operation; renovation, maintenance, expansion, or operation of housing units which includes rehabilitation loan programs; housing assistance programs like rental subsidies, security deposit assistance programs, and home buyer assistance programs; housing incentive programs like property developer incentive programs and landlord incentive programs; housing support services like housing issues hotlines, legal aid, and fair housing programs; and enforcement of allowed uses of residential properties. The measure text also outlines the eligibility standards based on certain factors.

The roadworks section says that the money may be spent on the repair, maintenance, replacement or new construction of road infrastructure, bicycle and multi-use paths, and stormwater management.

For the transit project section, the money may be used for the operational or capital equipment costs of public transit services and the repair, maintenance, and replacement of public transit infrastructure.

In the administrative costs section, it says the costs may include but are not limited to independent, third-party audits of the use of the special fund; monitoring and enforcing compliance of the tax; developing ordinances and regulations to implement the tax; collection and public communications of the tax; and legal defense of the tax.

Currently, the tax has no wording on whether funds can be spent on items like fire insurance or schools.

Who oversees how the funds are spent?

Section 3.60.110 states this committee would review expenditures and appropriations, recommend new expenditures, and make recommendations to the city to improve the way the tax is implemented and enforced.

The committee would consist of at least five members, who would be appointed by City Council and would be residents of the city. Members would serve for four-year terms and could not serve more than two consecutive terms. If five members could not be found due to a failure to appoint or a lack of applicants, the committee could also operate with three members.

The committee would receive support from the city manager’s office for clerical, administrative, and technical support. They would also be able to convene community meetings to get input on the tax.

Does the measure need a simple majority to pass?

No. Although other measures typically need a two-thirds vote to pass, the measure is a citizen’s ballot initiative. Therefore, it only needs passage by a 50% plus one majority of voters. Section 6 of the measure says as much and that the ordinance would be considered adopted on the date that the city declares the results of the election, then would be effective 10 days thereafter.

Eli Ramos is a reporter for Tahoe Daily Tribune. They are part of the 2024–26 cohort of California Local News Fellows through UC Berkeley.