Armed with new data, friends and foes of vacation rentals prepare to make a case for their cause

Opponents and proponents of short-term vacation rentals, working off the same set of city-supplied data, have widely differing views of what it means. The interpretation of the Palm Springs City Council, however, may ultimately decide if the data means anything at all.

Both sides will get a chance to state their case Tuesday evening when the Council holds a study session on the issue starting at 5:30 p.m. Coming out of the session, city staff may be directed to make amendments to current regulations governing short-term vacation rentals in the city — believed to be some of the strictest in the nation — or may be asked to do nothing at all.

At the center of the discussion will be the data, prepared following a March 10 regular Council session. Among the findings outlined in a staff report made available last week:

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  • Roughly 6.6% of the 35,000 units of housing in the city — 2,268 — are licensed as vacation rentals. A vast majority are single-family homes, as seen on this map done by The Post last year.
  • At least 17% of the homes in 11 city neighborhoods are short-term vacation rentals, led by Racquet Club Estates (36.7% of the homes), Sunmor (29.5%), and Twin Palms (27.7%).
  • While getting copies of rental contracts has often proved difficult and sometimes inaccurate, the city estimates the average vacation rental was used roughly 20 times for an average of five days in 2021. About five people stayed in the average unit during each rental period.
  • Approximately 190 citations were issued in 2021 to owners of vacation rentals — a decline of 55% from the prior year. Not surprisingly, citations for loud music were most common. Also not surprisingly, the overwhelming number of nuisance calls to the city’s vacation rental hotline occurred between 12 p.m. and Midnight on Saturdays. Vacation rentals in the Movie Colony East and Gene Autry neighborhoods had the most complaints.
  • The city collected $15.5 million in transit occupancy tax (TOT) from the permitted vacation rentals in the fiscal year that ended in June 2021. So far this fiscal year it has collected $9.1 million from the vacation rentals, with five months remaining.

Nobody is disputing the data, including figures that show the number of permits have increased 7% since adoption of the most recent regulations in 2017, one year prior to an overwhelming rejection of a vacation rental ban in the city in 2018. What they dispute is what it shows.

“Bottom line: the problem is density,” said Hank Plante, a frequent critic of short-term rentals (STRs) whose neighborhood is comprised of 17% of them. “We have too many party houses that have taken over neighborhoods.”

Also at issue, Plante claims, is the long-term impact of allowing 6.6% of the city’s available housing stock to become “mini-motels” instead of homes for renters and buyers. Available properties for sale across the entire Coachella Valley are at record lows, helping to push the cost of an average Palm Springs single-family home to more than $1 million. Data from Zillow shows rents in the city have doubled since 2014 and have increased an average of $530 since the start of the pandemic.

“Many national studies have proven that short-term rentals lead to housing shortages,” Plante said. “That’s why San Diego just limited its STRs to 1% of its housing stock in most neighborhoods. We must act on this over-saturation of STRs.”

Among the actions he would like to see city leaders take, Plante said, are a cap on vacation rental permits in Palm Springs and an immediate moratorium on issuing them.

“The solution (is to) immediately freeze any new STR permits,” he said, “and then reduce the number of vacation rental homes in Palm Springs, as other cities have done.”

Claims that the volume of short-term vacation rentals in Palm Springs or anywhere else are a factor in housing shortages are naturally disputed by the owners of local vacation rentals. They point out that the city is ultimately responsible for attracting developers committed to building homes that full-time residents can afford.

“The city has not gathered data on the number of housing units approved since 2010 and the average price of that housing,” said Bruce Hoban, one of the co-founders of Vacation Rental Owners and Neighbors of Palm Springs (VRON-PS). “Anecdotally, from listening to City Council meetings, most single-family housing projects approved by the Council were for homes around $500,000 or more. That is not low or middle income housing. …(T)o our knowledge not one major rental apartment complex has been built in Palm Springs in the last 10 years.”

Hoban doesn’t dispute data that shows some neighborhoods have a higher density of vacation rentals than others. However, he rejected the notion that any neighborhood is overrun with “party houses.”

“The city’s data shows there is no correlation between density and nuisance,” he said. “Take Racquet Club Estates for example. Racquet Club Estates has a 37% vacation rental density, but just 4% of all citations among the permits in that neighborhood. While it ranks No. 1 in density, it ranks No. 26 in citations. Some of the neighborhoods with the most vacation rentals have the lowest instance of call complaints, citations or suspensions.”

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