Longtime Cathedral City resident Teri Hargreaves is used to going all out to deal with the rotating cast of visitors at the short-term rental behind her house.
She monitors the booking page to see what days are filled. She hung up a tarp outside to prevent people at the rental from being able to look into her backyard. She’s recorded noisy revelers throwing parties that keep her up at night.
Hargreaves even put up a sign on her front lawn: “Neighborhoods are for Neighbors NOT Short Term Vacation Rentals,” one of at least a dozen that’s been spotted in front of houses around the city this fall.
“Unless you actually live near one, you have no idea what it’s like,” she said.
2020 has been a roller coaster of a year for short-term rentals in the desert. While the pandemic shut down activity for much of the spring, a boom of tourists booked homes in the summer. Palm Springs, the valley city that typically gets the most revenue from overnight guests, received $2.6 million from taxes on vacation rentals, compared to $2.2 million from hotel-related occupancy taxes, from July to September. But city hotlines across the desert lit up with calls.
That is at the crux of one of the most controversial policy debates raging across the Coachella Valley: Are vacation rentals an important boon to the tourist economy, or unruly mini-motels that disrupt neighborhoods? Small but vocal groups on both sides are waging a fierce battle as cities have tried to address the concerns.
The city council in Rancho Mirage recently voted to phase out short-term rentals in residential neighborhoods without homeowners’ associations, and hiked annual permit fees to $1,700. La Quinta has a moratorium on all new vacation rental permits through Feb. 2 and enacted stiffer fines. Palm Desert, which already bans vacation rentals in some neighborhoods, extended a moratorium on new permits in others.
And after the Cathedral City Council unanimously voted to phase out short-term rentals in non-HOAs in September, supporters gathered more than 3,500 valid signatures to force the council to overturn the ordinance or put it to the city’s voters. The council on Wednesday decided to call for a special election for the referendum on March 2.
Hargreaves is part of the leadership of a group dubbed Cathedral City Residents that’s organizing to oppose the ballot measure. They say vacation rentals disrupt life for full-time residents — and if it comes to a vote, Hargreaves thinks her side will win.
“I personally feel the residents will be able to oppose the industry,” Hargreaves said. “These are our neighborhoods.”
A pandemic-induced spike?
According to figures in some cities, calls and messages to Coachella Valley city hotlines over short-term rentals shot up this year as travelers descended on the desert. Each city has its own process for responding to hotline calls, which aren’t necessarily indicative of a real-time nuisance issue; a few calls in Palm Springs during the lockdown, for example, were inquiries about local occupancy rules. Some calls might be made about the same house or incident multiple times.
In La Quinta, residents contacted the hotline far more during the post-lockdown summer than they did the year before. The city received 676 calls and other mesages June to Labor Day, compared to 212 the summer before.
The total number of vacation rentals can vary from month to month, or even day to day, as permits expire and new ones are issued, but La Quinta had around 1,285 vacation homes this fall compared to around 1,300 at the end of last year, with a moratorium on new permits instituted in August and in place through February.
In Palm Desert, there were 118 hotline calls in the summer of 2020, compared to 71 the year before. The city also saw a jump in the number of unpermitted houses, with 76 homes were not permitted in 2020 compared to 40 in 2019. In the same timeframe, there were 779 permitted homes in 2020, compared to 809 the year before.
In Rancho Mirage, there were 75 calls this summer compared to 29 the year before with roughly the same amount of permitted houses around 270.
Bruce Hoban, the co-founder of the Vacation Rental Owners and Neighbors of Palm Springs, said many concerns have settled down after Labor Day, as guests have mellowed out. “There’s this pent-up crowd that came in the summer,” Hoban said. “After Labor Day, it was calm again.”
He said those who are pushing to crack down on rentals now have a “July, August mentality” that doesn’t reflect the situation on the ground.
That appeared to be the case in Palm Springs, where September saw 35 citations compared to 44 the year before; October had 15 citations in both years. But residents are still lighting up the hotline: September had 120 calls compared to 60 last year, and October had 90 compared to 77 last year.
While the Palm Springs City Council has not taken up any possible changes to its ordinance this year, the city did modify how enforcement calls after-hours are routed in order to achieve faster responses. The city’s ordinance and a “three strikes and you’re out” violation policy is frequently held up as a model for enforcement in the desert and beyond. Still, some in the city are pushing for an update to the rules, including former city Councilman JR Roberts who helped craft the original ordinance.
Hoban said he doesn’t think the movement to ban short-term rentals altogether will stick, citing the possibility for illegal short-term rentals to crop up and cause more problems.
He’s also hesitant to back the neighborhood-specific bans that some have raised as a possible solution, saying travelers seek a range of cost options for their rentals.
“I think vacation rentals are appropriate anywhere as long as they are properly behaving, and properly managed,” he said.
Cathedral City ballot fight looms
Karyn McQueen is vice president of I Love Cathedral City, a group of short-term rental owners and their supporters. A Bay Area resident with a home in Cathedral City that she uses herself and rents out, McQueen is also involved with Share Cathedral City, the group that organized petition signatures to overturn the city’s phase-out.
While Share Cathedral City is readying to back the ballot measure, McQueen said she would’ve liked to see the city come back to the bargaining table to come with a stricter enforcement model.
“We want to be able to work with everybody, to come up with a resolution that meets everybody’s needs,” McQueen said.
The fight over vacation rentals in Cathedral City dates back several years, but it reached a tipping point this September. In addition to the vote to phase out non-HOA rentals, the city also hiked annual permit fees to $1,950, and raised the fines for violating regulations or operating without a permit, with the proceeds to help fund stepped-up enforcement.
The crackdown may already be having an effect: Some short-term rentals owners may be selling their homes or finding long-term renters. Cathedral City had around 400 rentals when it passed the ban, it’s now down to about 340 as of late October.
McQueen said getting rid of short-term rentals is a poor economic choice — not only could it drive tourists away from Cathedral City, but many vacation rental owners use the profits to cover their mortgage. She said it’s “unreasonable and unrealistic” to suggest they should sell their homes because of a policy change.
“I don’t think that’s a fair conversation to have with people who’ve purchased their homes,” she said.
Additionally, she said residents who have issues with vacation homes get used to having empty homes next to them and are disrupted when they’re filled.
“I would rather have someone who is annoying be next door to me for two days than eight years,” McQueen said.
Doug Evans, a longtime Cathedral City resident and former city planner in La Quinta, is helping lead the group with Hargreaves that supports the phase-out.
On his street in the Panorama neighborhood, he counts about 14 properties, including several homes that he believes operate as unlicensed vacation rentals. His grown children are hesitant to visit because of the noise from vacationing neighbors, he said.
That’s why Evans, like Hargreaves, has spent several years looking to fight off vacation rentals at city hall.
“There are very few times as a homeowner in your life you have to fight for your home,” Evans said.
He said short-term rental owners don’t have to live with the noise or nuisance their guests’ cause.
“The problem occurs and the best they can do is make a phone call,” he said.
Evans and others in Cathedral City residents have blasted “corporate interests” for backing the push to keep short-term rentals afoot. But some of those in the vacation rental industry make it clear they’re open to restrictions as necessary.
Richard de Sam Lazaro, California policy director for Expedia Group that includes vacation rental platform VRBO, said party houses are a “significant problem” that the company doesn’t want to see any more than the neighbors do. But there’s no one-size-fits-all policy for vacation rental regulation and enforcement, he said.
“This is an active conversation in so many jurisdictions, and everyone is different,” de Sam Lazaro said. “The concerns from one city to another vary, as do the policy solutions.”
A new ban in Rancho Mirage
In Rancho Mirage, the City Council voted 4-1 to phase out vacation rentals in non-homeowners associations on Nov. 5, affecting 121 properties. A few weeks later, the city hiked fees for annual permits from $399 to $1,700, the second-highest in the desert after Cathedral City.
Some vacation rental owners say the city is overreacting. Resident and rental property owner Louisa Davis is spearheading a newly formed group called Vacation Rental Owners and Neighbors of Rancho Mirage, modeled after Hoban’s group in Palm Springs.
Davis said instead of a phase-out, she’d like to see more enforcement — such as a fine issued directly to the guests who are committing a noise violation. Currently, Palm Springs has such a policy while La Quinta, Rancho Mirage and Cathedral City do not.
“We as owners want (stricter rules)” she said. “We want to figure out, in all the cities, how we can be a part of the community.”
Another possible enforcement mechanism that Davis would support is a three-night minimum; a similar measure was put into place in Newport Beach this year as part of an overhaul to its vacation rental rules.
Davis has five vacation rental properties in the desert and manages multiple others — after renting out her own home in Rancho Mirage a few years ago, her neighbors also got involved in renting their properties, Davis said. At her properties, guests agree to be responsible for any city fines incurred during their stay as well as an additional fine to Davis. She operates with strict rules in place, mostly entering into contracts with families and steering clear of bachelorettes.
“The guests and the neighbors are my two priorities,” she said.
Davis said she doesn’t think the number of citations merit the phase-out that was passed. While Rancho Mirage had roughly 270 vacation rentals in both 2019 and 2020, the city issued 29 citations to permit holders in 2019 and 12 in 2020, according to city documents obtained by Davis’ group and shared with The Desert Sun. Some of those were for administrative reasons like failing to submit tax reports on time, but half of the citations issued to permit holders this year were for loud outdoor music.
The city issued 17 citations to non-permit holders in 2020, and 29 in 2019.
Mike Ziskind, a former Palm Springs resident who rallied against rentals there, moved to Rancho Mirage and now leads a group called Neighbors of Rancho Mirage that sent out mailers to residents pushing support for the new rules. He said task forces, committees and ordinance rewrites haven’t gone far enough.
“These are noisy, incompatible for-profit businesses,” Ziskind said in a statement. “They are approved by the city without zoning hearings, transparency or citizen input.”
Efforts in other valley cities
Indio leaders recently discussed measures to improve the short-term rental industry, but none are codified yet. Steps include requiring property owners to live about 30 minutes from a site and notifying homeowners of new rental properties if within 500 yards.
“We don’t want to be heavy-handed, but we want to make sure people are in compliance and everyone is treated equal,” Indio Mayor Glenn Miller said. “It’s gonna be a give and take. We do enjoy short term rentals. The city of Indio could not exist as the City of Festivals without it.”
His city had at least 327 hotline calls since March with around 740 vacation rentals citywide, although city staff said about 50% of them were associated with non-licensed properties. The city has 40 fewer permitted homes then it did last year.
Miller said he thinks the desert’s resort atmosphere would have attracted a surge of visitors regardless of the pandemic. The area was attractive to people escaping smoky conditions during this summer’s wildfires, he said.
“We have no problem with (short-term rentals). We just want to make them better partners with the people,” Miller said.
Rancho Mirage:City to ban STRs in non-gated, residential neighborhoods
In La Quinta, a short-term vacation rental ad hoc committee is expected to present additional recommendations on Dec. 15, following a decision to create stiffer fines for violations.
City Manager Jon McMillen said the majority of complaints in his city are noise-related; the new fee hikes made the first violation for loud music $1,000 instead of $500.
Data from the city of La Quinta shows that far more citations have been issued in the summer and fall this year compared to last: there were 45 citations in September and October of this year, compared to 11 and 10 last year.
McMillen thinks since people can’t partake in activities like concerts or movies, they opt to rent and relax in vacation homes, which has driven up activity.
“They get a rental out here and all of a sudden, they think it’s a party,” McMillen said.
But rental properties are spread out in different parts of the city and no single rule could apply to all of them, McMillen said. Some HOAs, for example, allow rentals and have their own guidelines, he said.
For the most part, property owners have been cooperative.
“I’m hearing about less and less complaints,” McMillen said in October.
Staff writers Colin Atagi contributed to this report. Melissa Daniels covers economic development, hospitality and local business in the Coachella Valley. She can be reached at (760)-567-8458, [email protected], or on Twitter @melissamdaniels.