City officials grapple with new type of home ownership, old issue of affordability

Faced with ongoing criticism and growing concerns over the lack of available housing for working-class families in the city, members of the Palm Springs City Council agreed Thursday night to do what they could to prevent corporate takeovers of neighborhoods. They may not have much luck.

Their efforts will come in the form of two reviews of existing regulations — one that deals with short-term vacation rentals (STVRs) and the other regulating timeshares. The city’s STVR regulations are among the toughest in the nation and may only need a simple review of current data to determine if any changes are required. But a new type of homeownership that City Attorney Jeff Ballinger has likened to a timeshare has only recently been in operation here and may lead to legal challenges.

Ballinger last year asked that Pacaso, a company offering shared ownership of luxury single-family homes in Palm Springs and elsewhere, cease operations in the city on the grounds its business model qualified as a timeshare, which are not allowed in residential neighborhoods. The company refused, hired a local attorney, and set the stage for a showdown at City Hall.

The first shots were fired on Thursday night, although they mainly consisted of Ballinger and Pacaso’s attorney, Bruce Bauer, repeating points made in letters they’ve been exchanging for three months.

At issue is not what the company does — finding a group of up to eight buyers, creating an LLC for them, then arranging for the LLC to purchase a home. Councilmember Geoff Kors said that was a “creative business model,” although it is “not a good thing in our residential neighborhoods.” Instead, city officials are concerned that different members of the newly-formed LLC will be coming and going from properties dozens of times each year, much like a short-term vacation rental.

Also at issue is the fact the ownership group, with Pacaso’s assistance, divides the time each member can use the home. That resembles a timeshare, and those are not permitted in Palm Springs single-family homes.

“Pacaso is not a timeshare,” Bauer argued. “The city cannot hammer a square peg into a round hole and claim it as such. …In a timeshare, a person purchases a piece of time. Our model is not the same. You are one of eight owners in the property. They are just categorically different.”

With Councilmember Christy Holstege absent and Mayor Pro Tem Grace Garner recused from the discussion, the three remaining elected officials in Council chambers asked staff to review the city’s timeshare regulations to see if they could somehow alter them to prevent the Pacaso model. They also agreed to explore whether the homes could be subject to code enforcement, similar to vacation rentals.

For now, the company can continue to operate without interruption. It already sold one home in the city, currently lists one other for sale on its website, and is believed to be marketing three others. Pacaso refused earlier requests to suspend operations in the city pending Council review and is currently in litigation in at least one other California community.

“None of us are in favor of this business model,” said Mayor Lisa Middleton. “But we know Pacaso will be aggressive in court. Sometimes our positions we take can result in some litigation. But that can also be unlikely depending on which course we choose to go.”

Which course the Council goes with vacation rentals should be known before summer. A study session on the city’s current STVR ordinance is scheduled for March 29, followed by public input and a possible vote on amendments to the STVR regulations.

On Thursday, Council members had a chance to direct city staff on what data they would like to review in the study session. Among the requests were:

• Detailed maps on how many STVRs are in each neighborhood, preferably printed and not digital such as this map created by The Post last year.
• What types of properties are being used as vacation rentals (luxury homes vs. moderately-priced homes, for example); and
• How many homes in the city might be second homes, taking them out of circulation for families to purchase or rent.

? Briefly

HOUSING CONVERSATION: “Stories from Home,” a series of talks presented by Lift to Rise, kicks off Saturday from 12 p.m. until 3:30 p.m. at the Palm Springs Convention Center. The event will include a panel discussion emceed by Kenny Rodgers of Low Income Investment Fund, with Deiter Crawford of the Desert Highland Gateway Estates Community Action Association and Palm Springs Black History Committee, Pearl Devers of the Palm Springs Section 14 Survivors, and Tanaya Hall, daughter of James O. Jessie, discussing the history and impact of Section 14 in Palm Springs. A photography exhibition by award-winning artist Noé Montes and music by the local folk band Las Tías, as well as a performance by the James O. Jessie Desert Highland Unity Center Team & Drum Squad, will round out the event. More information, and registration, are available via this link. 

CHANGE YOUR CLOCKS: Do we lose an hour of sleep or gain one this weekend? Are clocks moved one hour forward or backward? The answer to those questions may not be as important as the answer to this one: Why do we still go through the Daylight Saving Time dance twice a year? The short answer is you can blame Congress. Multiple states, including California, have introduced legislation to stop the outdated practice. But most of those bills require an act of Congress to put them in motion. There was a glimmer of hope in January 2021. That was when the Sunshine Protection Act was introduced in the US House. But it was never put to a vote, so here we are. For the record, you should move your clock one hour ahead on Sunday, which means you lose an hour of sleep. Still, you can look on the bright side: Sunday’s sunset is scheduled for almost 7 p.m.

☀️ Weekend events

• The Richard M. Milanovich Legacy Hike and 5K Run at Indian Canyons is today at 7 a.m.
   
• Palm Canyon Theatre concludes it runs of Palm Springs Getaway this weekend with performances tonight through Sunday.
   
• Dezart Performs is staging The Mountaintop tonight through Sunday.
   
• Well in the Desert distributes food every Saturday at 6 a.m. and 10 a.m. at 181 N. Indian Canyon Dr.
   
• The Palm Springs Certified Farmers’ Market  takes place at 2300 E. Baristo Rd. from 8:30 a.m. until 1:30 p.m. on Saturday.
   
• Desert Open Studios takes place this weekend. More than 100 artists throughout the Coachella Valley are opening their studios.
   
• Want to help plant trees? More than 150 volunteers are needed on Saturday to plant trees at Desert Highland Park, Victoria Park and Demuth Park.
   
• The Shamrock 5K will be held Saturday at 8 a.m., starting at the Palm Springs American Legion. Registration is open now.
   
• The Palm Springs Sunshine Sisters will enjoy a tour of the Palm Springs Air Museum, followed by a catered lunch and cocktails Sunday at 11 a.m.
   
• The Palm Springs Sisters of Perpetual Indulgence holds its next bingo event Sunday at 7 p.m. at One Eleven Bar.

For more events in Palm Springs, check the complete community calendar.
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