Lake Tahoe’s “Para-regulatory” regime: Clean at all costs

In his recent op-ed, Jesse Patterson of the League to Save Lake Tahoe wrote, “Tahoe is One of One.” On this, we agree: Lake Tahoe is truly unique. But what sets us apart isn’t just the lake’s beauty—it’s the tangled web of government agencies and “para-regulatory” nonprofits, like the League to Save Lake Tahoe, that have created a quasi-religious regime of regulation. Here, questioning the system is treated as heresy, and the costs—both financial and social—are staggering, yet too often ignored.

I’ve written before about the Tahoe Regional Planning Agency (TRPA), which began as a check on runaway development but has since evolved into an entity wielding pseudo-tax, police, and judicial powers. Alongside it, the City of South Lake Tahoe has embraced a culture of “over-planning,” never missing a chance to add another layer of rules and regulations, and rarely if ever liberalizing them. The League to Save Lake Tahoe, with its catchy slogan, has become a powerful gatekeeper, not just a guardian—frequently using lawsuits and policy papers to stall or block projects, driving up costs and delays. Their influence is outsized, their accountability minimal, and their property ownership near zero.

In most of America, owning property means you can reasonably improve, maintain, or develop it. Not in the Tahoe Basin. Here, homeowners must navigate a maze of permits just to fix a deck or remove a hazardous tree. Adding a bedroom or garage? That’s a bureaucratic odyssey, dependent on the whims of officials and the depth of your pockets for consultants and lawyers. 

I think we can all agree that virtually anything is better than a dilapidated gas station at one of the busiest intersections in the City, but the Asters are approaching five years to transform the former Runnel’s site, and still don’t have final building permits. It will likely take over a decade to build a new seismically safe hospital (on the site of a former casino!), most of that time consumed by permitting and environmental studies that will never be thorough enough. The “hole in the ground” near Stateline is celebrating 20 years of life this year, partly due to economic factors, but largely driven by interminable planning processes across multiple layers of government. This is not the American norm, and it doesn’t have to be this way to preserve and protect the Lake.

Small businesses fare no better. Want to swap out a sign, add a couple of tables or expand your patio? Prepare for environmental studies, mitigation fees, and the constant threat of litigation. The cost of compliance is measured not just in dollars, but in vacant buildings, years of stalled progress and missed opportunities to serve our community.

Affordable housing is the issue everyone claims to care about. Yet, after years of studies and tens of millions spent, the result is a few hundred subsidized units—built at three times the private market rate and serving only a small fraction of the need. The solution is clear: developers can only build in three dimensions – they need greater density either in the form of height or coverage throughout the Basin to have the possibility of building enough homes for our workforce. But instead, we’ve allowed the TRPA and “para-regulators” like the League to enforce a regime that keeps new housing scarce (and therefore expensive), relegating workers to aging motels or overcrowded rentals. Studying the issue ad nauseum, workshopping it for decades, filing lawsuits and hoping for a different result is not a viable strategy, yet it’s the one we’ve allowed to perpetuate through this “one of one” system.

And what do we have to show for all this sacrifice of living conditions, jobs, community fabric and economic vibrancy? After spending billions on clarity initiatives since 1997, the lake’s transparency has improved by just one foot. I guess one could argue it would have been worse; but that’s a tough position to take given the immense costs. It also ignores the technological improvements made and demonstrated elsewhere in the last four decades to protect the environment while also meeting the demands of the people who live here.

The human cost of these policies is staggering. Our communities are largely comprised of retirees and second-home owners, while young families and workers—the backbone of our economy—are priced out or forced into substandard housing, or out of the Basin entirely. We are left with a divided community: wealthy part-timers on one side, struggling workers on the other, and a disappearing middle class. The problem will only get worse with time as our largely 1960’s and 1970’s-era housing and commercial buildings continue to  age without any realistic plan for revitalization or redevelopment – perpetuated and enforced by this “one of one” regime.

The last thing Tahoe needs is more gatekeeping, more litigation, more consultants producing more studies, more unchecked enforcement power for TRPA, and more “para-regulation” through specious lawsuits. This “one of one” system of government and “para-regulators” with outsized influence has created an environment where the only growth industries are government and lawsuits – nice work if you can get it. It is also profoundly un-American (if not unconstitutional) in so many ways, with one largely unelected, unrepresentative agency possessing legislative, executive and judicial authorities. If we want to clean up something, let’s start there.

Stirring the Pot: Environmental Services' Crusade Against MEHKOs

Resistance to change is a hallmark of bureaucracy, but El Dorado County’s Environmental Services has taken this to new heights in its campaign against Microenterprise Home Kitchen Operations (MEHKOs). Their efforts to maintain the status quo are as unappetizing as the proverbial sausage-making process they seem determined to obscure.

For years, I’ve been an advocate for MEHKOs. Authorized by California legislators in 2018, the program allows counties to “opt-in” and permit small-scale home-based food businesses. The regulations are reasonable: amongst the many facets of the program, annual revenue is capped at $100,000; meal production is limited to what a family of four might consume daily; food must be prepared on the same day it’s sold; and operators must complete food safety certification. Twenty-two counties small and large, from Sierra to San Diego, have embraced MEHKOs. Data from these counties show negligible issues with foodborne illnesses or neighborhood disturbances. In fact, eating at a friend’s house (or your own) carries significantly more risk than dining on a MEHKO-prepared meal. Even El Dorado County’s own data that I obtained through a public records request confirms this.

Nonetheless, Environmental Services has launched an aggressive campaign against MEHKOs. They’ve lobbied both the City of South Lake Tahoe and the City of Placerville to oppose the program, citing hypothetical concerns like “lack of ventilation” or “potential parking issues.” These arguments are unsupported by evidence from other counties where such problems have not materialized. Internal documents reveal a troubling inconsistency: at one point, they supported MEHKOs when grant funding was available, yet shortly thereafter urged cities to oppose adoption.

This bureaucratic resistance creates absurd regulatory gaps. For instance, my private chef business (Tahoe Persian Kitchen) can legally prepare meals in a client’s home without a health permit. I can also cook for invited guests in my own kitchen. But if I charge for that same meal or deliver it elsewhere, it suddenly becomes illegal. My wife’s business (Tahoe Charcuterie Co.) faces similar contradictions: washing grapes at home is deemed unsafe, but doing so at a commissary kitchen or client’s house is perfectly fine. These rules are not just illogical—they’re stifling innovation and entrepreneurship. 27 people expressed interest in starting MEHKO’s when surveyed by the County last year; those are all potential entrepreneurs and potential future restaurateurs whose business (and tax revenue) is reduced or eliminated by current regulation.

Unfortunately, it appears Environmental Services’ lobbying has succeeded in delaying MEHKO adoption indefinitely. Armed with letters of opposition from local cities and their own relentless advocacy against the program, county Supervisors are unlikely to approve it anytime soon. Remember this next time your Supervisor campaigns on a pro-business, pro-small-government, “pull yourself up by your boostraps” message.

The most distressing aspect of the last few years of my advocacy is that the issue at hand has never been anything to do with public health. Other counties have adopted MEHKO regulation and they have not become hellscapes of noise, grease and disease. El Dorado County Environmental Services’ actions amount to nothing more than protectionism of a bureaucracy and a regulatory regime not based on evidence or reason. It’s simply resistance to change at any cost. That’s bad for small business, bad for innovation, bad for public health, and bad for economic opportunity - in my opinion, bureaucratic governance at its worst.

The biggest self-inflicted wound

The prognosis for El Dorado County and the City of South Lake Tahoe isn’t looking good. Sacramento’s unfunded seismic retrofit requirements for hospitals have forced Barton Health to make a bitter pill of a decision: relocate its main hospital to Nevada, while keeping some services on life support in California.

This move, while not a complete flatline for our local economy, still poses significant challenges for South Lake Tahoe. Barton isn’t just any employer; it’s the city’s largest and one of the few with well-paid professional jobs not tied to the tourism sector. This partial amputation will have notable economic side effects. The financial impact will be felt directly and indirectly – as these jobs move, payroll taxes will decrease and foot traffic from employees, patients and their families will cause side effects at local businesses near the Y. Many businesses on the West side of town cited a decline in foot traffic when Measure T was passed; that will be dwarfed by the loss of business this time around. I’d be surprised if the net present value of the economic losses isn’t significantly greater than the incremental cost of giving Barton the money to construct in California.

Barton’s dual-campus strategy, aiming to maintain outpatient services in South Lake Tahoe while building a new hospital in Stateline, Nevada, shows they’re not completely pulling the plug on our community. However, this compromise, necessitated by California’s shortsighted policies, still results in a net loss that’s hard to swallow.

What’s particularly nauseating is the deafening silence from our elected officials and unions. Our county, state, and federal politicians have done little to prevent this partial exodus, seemingly suffering from a severe case of political paralysis. The nurses’ union has been practically mute.

Here’s where the diagnosis gets even grimmer: over time, employees will be incentivized to move to Carson City or Gardnerville to work at the new location. The commute from these towns will be about the same as from Meyers or Christmas Valley but with the added bonus of lower taxes. The resulting brain drain and loss of well-paid, full-time residents from these communities will reverberate throughout the housing market and local businesses.

Dr. Clint Purvance, President & CEO of Barton Health, has tried to sugarcoat the pill, stating, “As we build in Nevada, Barton remains committed to California, and will continue to have robust services in both Stateline and South Lake Tahoe”. While this commitment is admirable, it doesn’t cure the economic ailments California’s policies have caused.

California has managed to shoot itself in the foot yet again, and just like virtually every town that borders Arizona or Nevada, the California side (in this case the City of South Lake Tahoe) is the one limping. In trying to ensure hospitals can withstand earthquakes, California has instead shaken the very foundation of our local economy. It’s a textbook case of the cure being worse than the disease. This self-inflicted wound will take more than a band-aid to heal. While we can appreciate Barton’s efforts to maintain services on both sides of the state line, we must also recognize that this compromise was forced by myopic policy.

The health of our cities depends not just on access to medical care, but also on the economic vitality that institutions like Barton bring. It’s time for California to take a more holistic approach to healthcare policy – one that considers not just seismic safety, but also the economic tremors that can result from unfunded mandates. Otherwise, we might find ourselves in need of more than just a second opinion – we’ll need a full-scale economic resuscitation. I call on newly elected State Representative Heather Hadwick, State Senator Marie Alvarado-Gil and Congressman Kevin Kiley to take this issue head on. There’s still time to find the money or incentives to keep Barton’s hospital and their jobs in the City of South Lake Tahoe (or simply exempt Barton from the mandate). As is often the case, prevention is the best medicine, and much cheaper than treating disease.

The problem is us

In an op-ed I wrote in August entitled “The HOA no one signed up for,” I said, “would-be developers at Homewood, Crystal Bay, and South Lake Tahoe are learning similar expensive lessons with multi-decade approval processes.” Those words turned out to be somewhat prophetic, as the Biltmore is in financial distress and Homewood recently announced they wouldn’t be opening at all this season.

With these announcements alone, thousands of jobs and hundreds of millions of dollars in economic activity has evaporated, including the nearby small businesses now without an anchor to draw foot traffic.

The problem isn’t part-time residents, a lack of bike infrastructure, a lack of government sponsored affordable housing, or a lack of open space. Instead, the problem is us. We metaphorically chain ourselves to ski lifts we rode as a kid, and get angry when that money losing operation says “no more.” We fight tooth and nail to preserve an artificially dense forest that looks nothing like the one the Washoe lived in, and get angry when our insurance companies don’t renew our policies. We have entire organizations centered around educating and rehabilitating selected charismatic megafauna, while ignoring those that don’t fit into our Disneyfied vision of nature. We weaponize permitting processes with specious lawsuits and procedural delays under the banner of environmentalism, and then wonder why there are few well paying jobs to support families. By doing these things, we have created a different kind of unsustainability. This isn’t working.

Our infrastructure is rotting, our housing stock is aging and built for a world that is no longer affordable for most, and our commercial corridors are filled with end-of-life buildings built for a pre-Internet economy that doesn’t exist anymore and will not exist in the future. Fighting change and development at any cost through taxation, lawsuits, #activism, bureaucracy and excessive regulation has significant costs. How much longer would you like to look at blighted and shuttered buildings and the shadows of the jobs and livelihoods they once housed?

Redevelopment agencies were abolished in California in 2012: the government isn’t coming to help us out of the hole this time. We simply must get past ourselves. The perfect can no longer be the enemy of the good, and romanticized visions of the past can no longer be the enemy of the reality of the world we live in. The Basin needs to attract billions of dollars of outside investment for the housing and jobs we purport to want. We need to create a regulatory environment that decreases uncertainty and allows investors to have a fair rate of return for the risk they take. No doubt there are externalities to these changes, and everyone (including me) has a hard time embracing them. However, without significant changes to our planning practices and #activism, we won’t have to worry about a “vibrant, not vacant” community; there won’t be the economy to sustain any community at all.

It's time to stop talking about affordable housing

The recent lawsuit filed by Mountain Area Preservation against the Tahoe Regional Planning Authority to stop implementation of their Phase 2 housing program is a prime example of everything that is wrong with the governance of the Tahoe Basin.

Even if the TRPA’s very modest changes were implemented, any affordable housing unit would still need hundreds of thousands of dollars per unit in government subsidies to be built. Their plan would only allow for about 1,000 new deed restricted units, when their own studies (that took years and millions of dollars to produce) show the need is six times that amount. As a reminder, Sugar Pine Village is subsidized to the tune of $850,000 per unit, and they got the land for free (and property tax free).

Enter Mountain Area Preservation, representing their 350 rich donors with their lawsuit. Even these modest changes were too much for them, and now TRPA will spend even more tax money fighting the lawsuit for years.

Layer on top of that local politicians, who love dreaming up ordinances and regulations that read like a fantasy novel, further restricting height, width, density, coverage, wastewater, parking, color, shape, setbacks, transit, landscaping and probably how many angels fit on the top of a pin. Plan approvals take months, if not years – and that’s just at the local level.

There isn’t a sane developer or businessperson that will invest a serious sum of money with the uncertainty of a project moving forward given all the uncertainties and high costs of building here. It simply is less risky and higher return to invest capital elsewhere. In our current system, the only winners are the bureaucrats and their consultants, who take our tax dollars and slowly convert them into works of fantasy for us to sue each other over and steady paychecks for them. It would take roughly a billion of today’s dollars in subsidies to build out ⅙ of the affordable housing need in the Basin. I’m sorry to be the bearer of bad news, but that money isn’t coming anytime soon.

Take a drive down Highway 50, and the result of all of this is plain to see – vacant storefronts, a museum of 1960’s era houses and commercial buildings no longer fit for purpose, a population that has declined 20% or more, a dead airport, and a community with close to the highest cost of living in the world. Just how Mountain Area Preservation and perhaps TRPA wants it, I suppose.

We’re so far away ideologically and structurally from an environment that would promote a healthy diversified economy and growing population to support it that talking about those reforms would be a work of fantasy worthy of a bureaucrat’s fever dream. Rather, I think that we should pivot from discussions of affordable housing to one of managed decline, which is the reality we actually live in.

Oh, and one more request: would the last person leaving South Lake Tahoe please turn out the lights? Mountain Area Preservation and TRPA say it will help preserve the night sky.