Council agrees short-term vacation rental permit cap needed, identifies larger issues to address

Elected officials were united on one point — the city must find a way to ensure vacation rental owners have closer ties to the community.
Many of the city’s midcentury modern homes, including most of the homes on this block, are used as short-term vacation rentals.

The Palm Springs City Council voiced support for further regulating vacation rentals in the city Thursday evening, including a cap on their volume. Still, it stopped short of fully backing recommendations of a workgroup formed this summer or issuing a moratorium while discussions continue.

In a 32-page report reviewed by councilmembers before Thursday’s meeting, the 11-member workgroup recommended capping short-term vacation rental permits at 2,500 and limiting their density to 10% of any city neighborhood. City staff reported Thursday evening that there are already 2,500 permits, with hundreds more in process.

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“At what point do we stop issuing new permits?” asked Mayor Lisa Middleton, expressing concern that would-be vacation rental license holders would rush City Hall. The answer appeared to be not yet. City Attorney Jeff Ballinger suggested staff frequently update councilmembers and that they be prepared to act on a moratorium of some sort at future meetings.

Also undecided was what to do about density. Councilmembers agreed that the current clustering of vacation rentals — seen in this map produced by The Post last year — was troublesome but that the workgroup’s suggestion of limiting permits to 10% of any neighborhood seemed unworkable.

“It’s the clustering, not the neighborhood lines,” said Councilmember Geoff Kors.

While a unified position on any moratorium, an exact cap figure, and a clustering solution remained elusive, councilmembers were united on one point — the city must find a way to ensure any short-term vacation rental owners have closer ties to the community.

“In my neighborhood alone, several homes have been flipped” and used as vacation rentals, said Councilmember Dennis Woods. “They have been seen as an investment. We really need to find a way to stop that.”

Councilmembers directed city staff to explore ways to ensure permit holders live in permitted homes for at least part of the year. They were also asked to look into the possibility of additional permit types that would allow full-time residents to rent their homes a handful of times each year.

Councilmembers also agreed that issues with a lack of affordable housing in the city could not be placed solely at the feet of vacation rental owners. Members of the workgroup attempted to address the issue but could not fully agree.

“We are losing some of the fabric of our city because people are taking advantage of this market, and we can’t fault them for that,” said Mayor Pro Tem Grace Garner. “I completely understand how people are missing what Palm Springs used to be. … I just don’t know if it’s the vacation rental industry that’s to blame.

Those remarks were likely to delight many in attendance at the meeting. During an hour of public testimony before the Council discussed the issue, opponents of the workgroup’s recommendations outnumber supporters roughly two to one. Many claimed that the makeup of the workgroup was skewed because it did not contain real estate professionals and that its report fell short because it did not include an economic impact analysis.

Interim City Manager Teresa Gallavan said city staff would work on that analysis and bring it back to councilmembers at a future meeting.

“I think we’ve taken very good notes, and we can proceed with the next steps and bring back additional information,” she said. “We know where you do have consensus.”

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