Palm Springs council to consider cap on number of short-term rental permits

Ema Sasic Paul Albani-Burgio
Palm Springs Desert Sun
Racquet Club Estates is one of seven Palm Springs neighborhoods housing the majority of the city's new short-term rentals, according to city data.

Palm Springs may soon cap the number of short-term vacation rental permits if the city council moves forward with recommendations that will be presented at its meeting Thursday.

The 11-member Vacation Rental Work Group recommends capping permits at 2,500 citywide, plus passing a new rule that no neighborhood could have more than 10% of properties used as short-term vacation rentals.  

The group recommends grandfathering in existing permits, as well as any application that's already been submitted.

The council is not set to vote on any changes Thursday. Instead, it will discuss what changes it might support and whether it wants city staff to draft amendments to city code that it would then vote on at a future meeting.

Council members have said they're open to new rules for short-term rentals, but that an outright ban is not on the table.

"I hope the public is taking away from the conversation that we've had today that we're trying to act tactically and act in a fashion that is balanced," Mayor Lisa Middleton said during a council meeting in March. "We're not trying to make radical change here."

On Friday, Middleton told The Desert Sun the study group's recommendations appear to be thoughtful and balanced. She said she looks forward to the group, council members and the public discussing them at the upcoming meeting, adding that city officials have worked hard to "make this a hospitality option that is available to those who follow our very strict rules."

Growth in rentals

Palm Springs is already close to reaching 2,500 vacation rentals: There were 2,445 as of July 28.

Vacation rentals have increased steadily in the city over the past five years. There were 1,888 in December 2017, 2,004 in December 2019 and 2,268 in December 2021.

Neighborhoods with the highest percentage of homes used as short-term rentals include Racquet Club Estates at 39%; Sunmor at 28% and Twin Palms and El Rancho Vista Estates at 27%. There are 12 neighborhoods where at least 17% of homes have active vacation rental permits.

In response to residents' concerns over the growing number of rentals, especially in some neighborhoods, the city council asked staff in March to put together a working group of residents to recommend changes.

The city received 124 applications to join the group, and 11 members were selected. They include several homeowners, multiple homeowner's association board members, a Realtor and four members of Palm Springs Vacation Rentals Owners and Renters, an organization with around 1,400 members that advocates for "responsible vacation rental ownership and management." 

Over the course of several meetings, the working group had discussions and votes on both a citywide cap and caps for each neighborhood, with a majority of the members voting to support both the 2,500-permit citywide cap and 10% neighborhood caps.

The working group also wrote in its report that the solution for Palm Springs' affordable housing issues "should start with the construction of more affordable housing, such as multi-family housing."

Dispute within group

Working group member Hank Plante said the recommendations are the "best compromise that will ever be on the table."

"Under this plan no one loses anything. No one with an short-term rental permit will be forced to give it up. No money will be lost to the City," he said in an email. "The number of short-term rentals in over-saturated neighborhoods will decrease very slowly and will take many years or even decades, given the low turnover rate of Palm Springs homes."

Bruce Hoban, a member of the working group who is also a co-founder and board member of the vacation rental owners group, said both he and group support the 2,500 citywide cap. 

"We are always concerned about the balance between vacation rentals and residents across the city," he said. "By limiting the number, we hope to ensure we don't get bad actors in the vacation rental community."

However, Hoban said he and the group oppose the 10% neighborhood cap, which he called "a giant social experiment" that could cause property owners to put rentals in areas that don't have many.

He said people come to Palm Springs for historic houses and experiences that are concentrated in certain neighborhoods and that if they are not available, some people could lose interest in coming to Palm Springs altogether. 

He also questioned how the 10% number was chosen, and said it did not appear to be based on any data or analysis. 

Palm Springs is not the only area to consider temporary bans on short-term rentals recently. The Riverside County Board of Supervisors approved a 45-day moratorium on new short-term rentals in Idyllwild, Pine Cove and Mountain Center, as well as in the unincorporated Temecula Valley wine country, this month. An ordinance for Joshua Tree and other high desert communities was also approved this summer.

Ema Sasic covers entertainment and health in the Coachella Valley. Reach her at ema.sasic@desertsun.com or on Twitter @ema_sasic. Paul Albani-Burgio covers breaking news and the City of Palm Springs. Follow him on Twitter @albaniburgiop or email paul.albani-burgio@desertsun.com.