Short-term vacation rentals were not always a part of the Palm Springs tourist market. In fact, prior to 2000, most short-term rentals were monthly or seasonal. The weekend/week long rentals are more recent and have been fueled by the advent of online booking services.
On July 30, 2008, as the city was crafting its original vacation rental ordinance, Palm Springs City Attorney Doug Holland stated that a case could be made that:
“A SINGLE-FAMILY RESIDENCE CAN ONLY BE USED FOR A PERMANENT RESIDENCE… A RENTAL OF 28 DAYS OR LESS CONSTITUTES A HOTEL USE BECAUSE WE’RE GOING TO REQUIRE THEM TO PAY A T.O.T.”
The City’s Attorney was ignored by an industry-friendly council and on that day, a Vacation Rental Ordinance was approved as a way of “dealing with this issue” – to see if the ordinance might dampen the growing residents’ complaints without forsaking T.O.T. revenue. Local rental industry leaders were at the drafting table, ensuring they became the “first responders” to hotline complaints, thus mitigating the tracking and issuing of citations.
Since 2008, the city council has enacted two Vacation Rental ordinances, hired code enforcement contractors, consulted with ONE-PS leaders, rental industry representatives and created a dedicated Vacation rental Subcommittee. These actions have failed to resolve any of the outstanding issues.
After nine years of uncontrolled growth and recurring problems, we conclude, as have other tourist-dependent cities, that allowing these unsupervised de-facto motels in residential neighborhoods is a failed experiment.
We did not come to this conclusion arbitrarily, or with bias. Rather, we sought out hard facts and best practices from other resort cities. We reviewed dozens of vacation rental ordinances in California and across the United States. The results are conclusive and they cannot be ignored by the industry, by the voters or by the Palm Springs City Council.
STRs affect neighborhoods in many ways:
STRs impact the lives of neighbors with the noise and disruption to the peaceful enjoyment of our homes, a right granted us in the city’s General Plan.
STRs create “strangerhoods,” leading to an increase in crime and loss of community.
STRs present unfair competition to our small hotels and inns that must adhere to strict health and safety regulations.
STRs remove housing that is affordable for long-term renters and first-home buyers.
Single-family residential neighborhoods were never intended to provide full-time transient lodging for tourists, yet many of our blocks and neighborhoods have been converted into “motel rows” by this rampant misuse of our zoning code.
PON has studied the successful actions of other California resort cities that address the same issues. Their city officials realized that filling their legitimate hotels was far more important than "blockbusting" residential neighborhoods. In Palm Springs, our current hotel occupancy rate is 63 percent. The high vacancy rate will get even worse when the new downtown hotels open. How does it make economic sense for the city to subject our neighborhoods to short-term rentals with no limit?
Anaheim, Laguna Beach, Ojai, Santa Barbara, Monterey, Carmel and others now treat vacation rentals as commercial motels. These motels can only operate in commercial zones. (The exception is a “home-sharing” arrangement, where owners remain in their homes and rent out only a portion of them.) Their city councils thought through the problems strategically. They weren’t intimidated by industry lobbyists or boisterous realtors. They realized that maintaining the integrity of their residential neighborhoods must be their top priority and that residents are the backbone of a stable community and economy - regardless of any future recession or economic downturn which could potentially threaten a tourist economy like ours.
We discovered that, contrary to economic myths and industry-speak, actual tourists are not abandoning those beautiful destination cities and housing prices have been on the rise.
In February 2016, Protect Our Neighborhoods presented the city with seven ways to mitigate the negative effects of STRs. We requested a temporary moratorium while a new, improved ordinance could be created with neighbor and industry input. As we are the only organization that represents residents on this issue, we believed we could sit down with the industry and city leaders to find effective solutions. We were wrong. It became obvious to us that, once again, investors and developers continue to hold great sway over our elected officials, and residents are merely regarded as “collateral damage.”
In April 2016, hundreds of Palm Springs residents signed a petition supporting our moratorium request. Many shared heartbreaking accounts of uncaring vacation rental owners and ineffective city enforcement. Their calls, letters and complaints were dismissed. Their unanswered letters to prior Councils date back to 2008.
Following the Council’s refusal to impose a temporary moratorium, the floodgates opened last summer as never before. July 2016 saw a record ten percent increase in new vacation rental permits over June. Since that time, the number of STRs has grown 25%. The latest total is estimated to be over 2300 permits (jncluding those in the pipeline.) With no end in sight!
Late in the summer, PON obtained a copy of a letter from the head of the Greater Palm Springs Convention & Visitor Bureau (CVB) which described plans for another assault on our neighborhoods -- namely to assess a special 1% tax on STRs in order to further “promote” them to investors and visitors. We believe the CVB will also earmark this revenue to build a reserve to fight any legal or political action residents might take in the future to reclaim their neighborhoods.
Enough is enough!
The City has failed us in its primary role: to protect the safety and quality of life of its residents and maintain the integrity of its residential neighborhoods. It has done so by allowing the commercialization of its R-1 zoned neighborhoods. Since 2008, our City Councils have ignored our zoning laws, our General Plan, and our neighborhood communities while allowing investors and developers to take over our homes and streets. Neighbors are fed up with the City’s inept enforcement and many want to leave before the real estate dam breaks. There are more hotline complaints, fewer long-term rental units, and more police calls diverting officers from real emergencies. The Palm Springs Police responded to 1,453 calls to STRs last year alone.
Nine years of this failed “experiment” lead us to conclude that incremental changes to the code, better enforcement, minimum stays—none of these stop-gap measures can change the fact that these commercial, for-profit businesses are illegally operating in violation of zoning laws. They are fundamentally incompatible with residential neighborhoods.
They destroy our streets one home at a time.
Prospective home buyers have begun to ask whether there are vacation rentals located next door or nearby as part of their own due diligence. Realtors licensed only to sell residential real estate frequently advertise homes as having commercial “investment potential.”
Through careful analysis, we have concluded there is no middle ground regarding a solution. Here’s why:
- If we do nothing, Palm Springs’ vacation rental inventory will continue to grow at an accelerated rate turning our neighborhoods into motel rows for weekend warriors. Legitimate hotels will continue to see high vacancy rates.
- If we “cap” the number of rentals, neighbors who are now surrounded will not be helped and will in fact be harmed when the time comes to sell: prospective buyers do not want to live in a house surrounded by STRs and a cap would prevent these same houses from being permitted as short-term rentals themselves.
- If we beef up our inadequate, part-time enforcement process, neighbors still must continue to play policeman 7/24, minding another’s business investment, problems will continue and enforcement costs will spiral.
- STRs will continue to present unfair competition to our legitimate small hotels and inns that must comply with costly safety, health and accessibility regulations.
- STRs will remove more affordable long-term rental inventory and single-family homes for first time home buyers, many of whom work and send their children to school in Palm Springs.
The vacation rental experiment threatens our neighborhoods. It threatens our real estate industry. And it has failed our citizens. It is just not feasible to operate motels—or any commercial businesses—in residential-zoned neighborhoods.
In December of last year, a new Vacation Rental (VR) Ordinance 1907 was approved 4-0 by City Council. It was the result of several meetings between ourselves, VR representatives, residents and Council members Kors and Roberts. Rentals of 28 days or longer were exempt. So was “home sharing” where the owner was present.
The ordinance, though not perfect, was a step in the right direction and would have gone a long way in stopping outside business interests from coming into our neighborhoods and converting our homes to full-time commercial motels. The ordinance put a stop to more than one home per natural person operating as a short-term vacation rental. Set maximum guests to 2 per bedroom for all homes. It allowed 32 rental contracts per calendar year and the elimination of multiple owned STRs by one person within 4 years. Another feature of the ordinance was the creation of a city department to receive and respond to all complaint calls directly (funded 100% by permit fees). No longer would owners and rental agencies be first responders to hotline calls. After months of meetings, PON thought that this would be a compromise all sides could live with.
Immediately after passage, a group of out-of-town business interests, lead by Wyndam Worldwide and The National Realtor Association, joined by STR owners, local vacation rental agencies and realtors had second thoughts. They saw our city council was seriously concerned about the rights of residents and neighbors, and intent on curtailing the overreach of an industry that prior councils had facilitated. The new ordinance, which permitted only one STR per person, was suddenly unacceptable. And so these business interests spent thousands of dollars to collect petition signatures for a referendum that would kill the new ordinance.
Their dollars worked. The petition succeeded. And despite a public announcement that the City was prepared to run a counter ballot measure requiring that all STRs adhere to the same SAFETY, HEALTH and ADA requirements as our legitimate hotels in order to PROTECT THE SAFETY of our residents and tourists, the referendum was filed.
In response, the city in negotiations with the "industry", dropped that counter ballot measure and agreed to a new Urgency VR Ordinance designed to replace 1907. The Urgency Ordinance was negotiated behind closed doors without the input of any citizens or organizations with opposing views. PON was informed of the industry agreement. The “deal“ was declared non-negotiable by Councilpersons Kors and Roberts.
Backroom dealings haven’t benefited the citizens of Palm Springs.
PON opposed the Urgency Ordinance as both unnecessarily hasty and a continued give away to the industry that neither lives nor votes in Palm Springs.
The Council officially repealed Ordinance 1907 this February, eliminating the anticipated referendum, but failed to pass the Urgency Ordinance which required 4 votes. Instead Council returned the urgency ordinance to the Planning Committee to review its planned change to Zoning Code, in a special session, the same night the Council will once again attempt to vote it in (or not).
PON FILES FOR INJUNCTION
On March 13th, in response to the City's failure to adequately regulate vacation rentals, Protect Our Neighborhoods filed a lawsuit against the City of Palm Springs in Riverside Court. PON is seeking an injunction to stop the City from issuing STR permits unless and until 1) the City has conducted adequate environmental review of vacation rentals as required by CEQA, the California Environmental Quality Act, and 2) the City adopts adequate regulation requiring STRs to obtain a Land Use or Conditional Use permit prior to operating.
VR Ordinance 1918 Approved by Council
On March 15th, The Palm Springs City Council did pass VR Ordinance 1918 (the previously referred to "urgency ordiance") in its entirety, including the changes to the zoning code giving Land Use Permits (LUP) for “Estate” homes - those with 5+ Bedrooms in particular ZONES allowing for larger lots. Even though earlier that same day, the Planning Commission voted unanimously not to approve the LUP requirement and required zoning code change. A variety of reasons were cited and discussed. Apparently, asking for Planning Commission approval was just a formality not a requirement. More evidence of city dysfunction!
The City Council approved the new ordinance 3-1, with Mayor Moon voting “no”, and Councilman Mills recusing. Moon was adamant that the revised ordinance drifted too far from placing expanded restrictions on STRs. “A vacation rental is, in fact a residential business, and that cannot operate in a residential neighborhood,” said Moon.
The new VR Ordinance (1918) allows up to 36 rental contracts per year plus unlimited use by five designated “friends and family”. Effectively allowing the home to be occupied every weekend of the year as a vacation rental.
Homes on lots under 15,000 square feet will be allowed to rent out only 4 bedrooms for up to 8 overnight guests, plus 2 children. 14 guests would be allowed to enjoy the home during the daytime. Land Use Permits (LUP) will be given to “Estate Homes", those with 5+ Bedrooms in particular ZONES allowing for larger lots (R1-A,R1-B,R1-AH,GR-5).
For owners (individuals and corporations) of multiple STR properties – they will be able to now keep them forever. The new ordinance grandfathers them in.
VR Ordinance 1918 will become effective on April 16th.
They wanted more!
Just as 1918 was being implemented, the city council slipped in yet another concession to the industry and another step to undermine the health and viability of Palm Springs neighborhoods.
After a few vacation rental business owners balked that they couldn’t make ends meet if they only rented out four of their five-, six-, and seven-bedroom “hotels” located on small lots, the council removed this one remaining vestige of good zoning.
For no apparent reason, other than to placate these owners of very large short-term rental homes, they introduced an ordinance change which further weakened the already-watered down new vacation ordinance. They removed the restriction limiting the number of bedrooms that can be rented. SO, all STRs may now rent up to 6 bedrooms (no matter lot size or proximity to neighbors) and sleep up to 14 "guests." It passed unanimously 3-0 (Foat and Mills absent).
Court date set to hear PON's motion for temporary moratorium.
Riverside Superior Court, on May 1st, will hear the motion for an injunction to stop the City of Palm Springs from issuing any more Short-term Rental (STR) permits until the city has adopted adequate regulations to ensure new vacation rentals do not add to the commercialization of streets and neighborhoods that are already burdened by too many. This is a temporary moratorium until the court rules on the merits of the overall case.
[ Stay tuned... more history is in the making]
Remember, we are all just one For Sale sign away from having a full-time transient motel next door to us.
Please join us today, as we fight to Protect Our Neighborhoods!