The Tahoe City area has a diverse population, with 173.8% of residents being white, 0.9% black, and 3.4% Hispanic. The city's population is based on the fact that most residents are homeowners, with only 1.96 percent of the population living as renters. Tahoe City has a median household income of $70,407, and a 35% college dropout rate.
The Tahoe area is home to many part-time residents and experience seasonal population influxes. Within the City's sphere of influence are residential, designated open spaces, commercial, industrial, and recreational uses. The area is also under the jurisdiction of the Tahoe Regional Planning Agency, which is responsible for regulating growth near the lake. While the population of the City is steadily increasing, it is still small enough to maintain a quality of life.
There are currently no plans for major annexations within the city's sphere of influence. This is because existing communities receive service from South Lake Tahoe PUD, and police protection is provided by the El Dorado County Sheriff's Department. The Tahoe Region Plan aims to promote growth management in Tahoe City by directing growth toward existing communities. Growth outside the city limits is restricted to infill development, which most likely has existing services.
The Tahoe region is rich in timber, and its forests became a major resource. This fuel-rich area supported mining operations under Virginia City. Over the years, the availability of timber has resulted in devastation of the forest, but in addition to the richness of its resources, Tahoe City has become an exclusive retreat for elite San Francisco families. In 1968, California and Nevada established the Tahoe Regional Planning Agency, which oversees the development of the Tahoe Basin while protecting the region's unique resources.