The real estate crisis in Palm Springs may dominate headlines, but a related issue – with far less sexy architecture – is happening in tandem.
The big picture: The self-storage business is booming. In just the past five years, construction of new self-storage facilities has spiked. Developers went from spending around $1 billion annually on new construction to $5 billion in just three years.
- Right now, there are twice as many self-storage businesses in the United States than all Starbucks and McDonald’s combined.
But why? There’s a shift in not only where we live, but how. Baby Boomers are downsizing in retirement, and younger people are moving to cities, where there’s less space.
What’s different here: Palm Springs was always popular with retirees, and the pandemic created more of them thanks to a spike in early retirements. The pandemic also saw more remote workers ditch their homes in the suburbs and relocate to second homes here. Combining two homes into one seems like a good idea until you need a place to store inherited armoires and Beanie Babies you’ve been collecting over the years.
In the trenches: The law of supply and demand is definitely playing out in Palm Springs. Consider the following:
- Monthly rent for a 10×10 storage unit — the most common size — averages around $100 across the United States. In Palm Springs, if you can find one, you’ll be paying roughly twice that amount. On Palm Springs social media pages, it’s not unusual to hear of monthly fee hikes of 25% or more when it comes time to renew a storage rental agreement.
- The 10×10 rents here are on par with San Francisco ($199 a month) and Los Angeles ($172). Need better rates? Try Lubbock, Texas, where 10×10 rents are the lowest in the nation — $46 a month.
Help coming: Demand shows no sign of letting up, but what about supply? Some should be coming. A pair of new self-storage projects are in the pipeline at City Hall as developers try to tap into what’s projected to be a $44 billion industry by 2024.
- One developer plans to build a 62,000-square-foot facility called West Coast Self Storage on a 3.5-acre plot of land off Gene Autry Trail near the Escena development. It was approved with conditions last month by the city’s Planning Commission, but failed to move forward Monday evening when discussed by the city’s Architectural Review Committee (ARC). After grilling the developer’s representative for nearly two hours, and criticizing the industrial design of what is ultimately an industrial project, committee members continued their consideration of the project, asking the developer to submit different designs.
- Another developer held a pre-application meeting with the city in January to discuss plans for a third Extra Space Self Storage location in the desert. It would be built at the northwest corner of Camino Parocela and Gene Autry Trail (across the street from a Staples store). No permits have been issued for that project yet.
“Open up some design books or something. This thing looks like it’s straight out of tilt-up world in San Bernardino.”— Sean Lockyer, Palm Springs Architectural Review Committee