South Lake Tahoe, population 21,939 (2019), occupies the southern end of Lake Tahoe at an elevation of 6,237 feet in the Sierra Nevada Mountains. South Lake Tahoe is within the watershed of Lake Tahoe, which is internationally recognized for its outstanding clarity. In order to restore and protect water quality and aquatic ecosystems, development in South Lake Tahoe and five counties is regulated by the Tahoe Regional Planning Agency (TRPA) and its TDR program. This TDR mechanism is described in the profile of the TRPA program. South Lake Tahoe is given this separate profile because of the city’s success at transferring TDRs from environmentally-sensitive sending sites to urban receiving sites.
Like other locations in the Lake Tahoe watershed, South Lake Tahoe experienced a building boom over half a century ago, much of which was spurred by the 1960 Winter Olympics held in Squaw Valley, a few miles north of the city. Much of this development consisted of motels and hotels built prior to the imposition of modern regulations for stormwater management. These older tourist units were also discouraging the development of new lodging and depressing the city’s potential for greater tax revenues considering that the region is a winter sports mecca and the city itself is home to Heavenly Mountain Shi Resort.
The South Lake Tahoe Redevelopment Agency was at one time a major reason for the city’s successful TDR program. The Agency acquired many older, nonconforming properties. Some of these acquired properties were recycled for new development using modern environmental standards. In some instances, an acquired site was unsuitable for development and was restored to its natural state in order to promote water protection benefits that in turn protect the water quality of Lake Tahoe. Importantly, the Agency banked marketable development rights from the sites it acquired.
The entire South Lake Tahoe redevelopment effort carried a price tag of $230 million. Much of this cost was recouped by improved property tax receipts and a transient occupancy tax of 12.05 percent on the room rates of tourist units. Importantly, the cost of acquiring the marketable rights needed to build new tourist units was offset by sales of the rights that the Agency acquired, such as the sale of 400 tourist unit rights and 6,000 square feet of commercial floor area rights to a single Embassy Suites hotel complex for $3.8 million (Solimar 2003).
The Redevelopment Agency also facilitated transactions by serving as a TDR bank where developers knew they could acquire marketable rights without having to find willing sellers and go through the time and expense of securing the necessary approvals. Furthermore, the Agency was able to write down the cost of these marketable rights in other to make redevelopment projects financially viable (Solimar 2003).
By 2001, the Redevelopment Agency had acquired 781 Tourist Accommodation Units (TAUs) and used 696 TAUs in downtown revitalization projects. Many of these TAUs resulted from the acquisition of environmentally sensitive sites that had been inappropriately developed under pre-TRPA regulations. Some of these sites underwent a natural restoration process to provide habitat and/or water protection features including storm-water retention basins. Alternatively, some properties in non-sensitive locations were reused for downtown revitalization but using development techniques designed to safeguard the clarity of Lake Tahoe (Solimar 2003).
Solimar Research Group. 2003. Tahoe Basin Marketable Rights Transfer Program Assessment. Ventura, California: Solimar Research Group.