The Basics of Vacation Rental Regulations in Palm Springs
Part 2 in a Series on Palm Springs Vacation Rentals
[Updated 3/28/18 with a note at end about how Palm Springs Measure C puts enforcement of these regulations at risk.]
Given how much conversation there has been about vacation rentals over many years in Palm Springs, it often surprises me that many residents are unaware that there are regulations in place at all. Additionally, I also see confusion expressed about the extent of the regulations and how they are enforced.
Make no mistake: The City of Palm Springs has one of the most sophisticated (you might say, “complex”) and stringent regulations governing short-term rentals of any municipality in the US. The administration and enforcement of those regulations is handled by a dedicated Vacation Rental Compliance Department (“VRCD”), which is funded not by tax dollars but entirely by Vacation Rental Registration Permit fees.
The VRCD has a pretty comprehensive set of FAQs about the current ordinance on their website (which is accessible via the somewhat easy-to-remember domain psvacationrentalcompliance.com). These can be found on the Ordinance 1918 Tool Kit page that they maintain there.
Should you read those FAQs, you’ll be pretty well up to speed on the basics, but I explain them and try to put a bit of historical context around them in rest of this article. Additionally, I explain how the Palm Springs Vacation Rental Ordinance applies in some situations that you might not have thought about.
Core Requirements of the Palm Springs Vacation Rental Ordinance
When first enacted in 2008, the Palm Springs Vacation Rental Ordinance was one of the first municipal regulations to require registration, tax collection and monitoring of vacation rentals. It became a model for vacation rental regulations (often called “short-term rental” regulations in other places) in many other cities, not just in the broader Coachella Valley, but across the US.
The following core requirements have been in place for many years and continue to be part of the ordinance today:
- Permit required: Vacation rentals (and now homeshares) must have a valid permit, renewed annually. Under the current ordinance, the application process is rather more complicated than in previous years and involves some new safety inspections and certifications (for details, see VRCD’s “Applying for a VR Certificate / Renewals” page).
- TOT Tax Collected: Vacation rental permit holders must also have a Transient Occupancy Tax permit and collect, report and remit TOT on a monthly basis. (Fun fact: In fiscal year 2016–2017, vacation rentals generated $7.58 million in TOT revenue, which goes directly to the city’s general fund. This was more than 25% of the total TOT ($29.3 million) collected by all forms of transient lodging in Palm Springs.)
- Occupancy limits: The ordinance set limits on the number of overnight and daytime guests that may be present on a property and these are noted in the permit. The current ordinance lowered these limits to reduce maximum occupancy and also set limits on the number of vehicles (belonging to overnight guests) that can be present, as follows:
- Contract required: Owners or managers must execute a signed contract for each guest stay, with a variety of requirements for what the contracts must stipulate. Under the current ordinance a summary of each contract must be submitted to the VRCD in advance of each guest stay. (This is done via an online form at present.)
- Local response contact required: All vacation rentals must have a local contact who is available 24 hours per day to respond within minutes to any complaints or issues at the property, as required by enforcement staff.
- Vacation Rental Hotline: The VRCD operates a 24-hour Vacation Rental Hotline that can be used to report active nuisances or disturbances (such as noise, parking or trash) created by short-term rentals. Originally, local response contacts were tasked with responding to Hotline complaints. Today, City staff are now the first responders to complaint calls — which has resulted in citations being issued with greater frequency than in the past. (I’ve studied and written about the Hotline at length and you can learn a lot more about that on my “Palm Springs Vacation Rental Hotline Map” page. BTW, you can always find the current Vacation Rental Hotline number on the VRCD’s home page.)
Aside: I’m unsure of the exact date that the Vacation Rental Hotline service was established. There is no mention of such a service in the 2008 ordinance (№1748) as originally drafted. However, the 2014 ordinance (№1848) makes mention of it in the ordinance itself. I believe the Hotline service was established sometime prior to adoption of Ordinance №1848. Let it suffice to say that the Hotline has long been part of vacation rental enforcement here in Palm Springs.
Vacation Rental Ordinance Modifications Over Time
Over time, the ordinance has been revised by both city council actions and administrative regulations issued by the city manager. A major update to the original ordinance, adopted in 2014, and various administrative regulations have, over time, imposed additional regulations (which continue to be part of the current ordinance) including:
- Minimum age for responsible renter: The guest signing a vacation rental contract must be at least 25 years of age (this was raised from the original of 18).
- Prohibition on outdoor/amplified music: Originally, guests of vacation rentals were subject only to the same noise restrictions as any other resident. The 2014 ordinance added a restriction that vacation rental guests cannot enjoy outdoor amplified music at any volume and that music from indoors be completely contained within the property— it must not be audible at the adjacent property line. (Any such music audible is grounds for a citation — it need not exceed any particular volume level. These are the most common types of nuisance citations issued, by the way, and represent more than 70% of citations issued in response to Hotline calls since April 16, 2017.)
- Walk-up trash service required: Single-family home type rentals are required to have upgraded “walk up” trash service to help ensure waste bins are not left in public view.
- Registration number required in advertising: In order to assist the City in identifying unregistered vacation rentals, a requirement was added that registered vacation rentals must post their TOT numbers in all advertising (such as listings on vacation rental websites). The current requirement is now to post the “City ID number” associated with the property’s permit. (I’ve written about this requirement and the issue of unregistered vacation rentals in a previous article, which I intend to update in the near future.) It should also be noted that advertising a residence’s availability for short-term stays without first obtaining a permit is prohibited.
New Requirements of the Latest Ordinance
The current version of the ordinance added many new and modified regulations, some of which I summarized above. Additional regulations added with the adoption of Ordinance 1918 include:
- New restrictions on permit eligibility and number of permits: Business entities are no longer allowed to acquire or renew vacation rental permits. (It is unclear that this was ever a significant issue and, once VRCD reports on the number of permits held by business entities, this will be the subject of a future article. It’s a complex topic.) An owner may now only be issued and hold one Vacation Rental Registration Certificate at any time. (Holders of multiple VR permits prior to Jan 10, 2017 can continue to renew their existing permits.) Vacation rental permits cannot be issued for apartments (this restriction was actually adopted several months before Ordinance 1918) and existing permits of that type are being sunsetted. (This, too, is a rather complex topic and may be the subject of a future article.)
- Note that there is no specific residency requirement for obtaining a Vacation Rental Registration Certificate and I occasionally see people confused on this point. For more detail, see this supplemental note, “Who Can Hold a Vacation Rental Permit? Do they Have to Live in Palm Springs?”]
- Limits on number of rental contracts per year: Any given vacation rental can host a maximum of 36 short-term guest stays per year. (This restriction is fairly complex. I’ll refer you to this VRCD document for more detail.)
- “Three strikes” and suspension risk: Three citations (including administrative and nuisance type citations) for violations of the ordinance in any 12 month period can result in a two-year suspension of the property’s permit.
- Increased penalties for violations: Fines for violations were substantially increased (to $500 for first violation and $1000 for subsequent violations). Certain types of violations can be assessed even higher fines. (For a short summary of fine schedules, see this Vacation Rental Compliance Department document, “Courtesy Reminder — Violations, Fines and Penalties.”)
- Failure to register is an extremely serious violation: Operating a vacation rental without a permit is now punishable by a $5000 fine and permanent ineligibility to ever be issued a short-term rental permit.
- Various enhanced guest standards, hosted check-in/meet and greet: All adult guests must now sign a “statement of rules and regulations” certifying that they understand the conduct/noise restrictions outlined in the City’s “Good Neighbor Brochure.” Guests must have an in-person meeting with the local property manager to go over these rules (either as part of check-in or within 24 hours of arriving at the property).
- “Friends and family” list/restrictions on unpaid stays: Even unpaid guest stays count as a vacation rental “contract” and must be reported to the city. An exception is made for five named individuals who are allowed to stay at the property in the owner’s absence without being counted as a contract. This is the so-called “friends and family” list. Even though such stays need not be reported as a contract summary, all of the other restrictions of the Vacation Rental Ordinance apply to “friends and family” stays.
- Restrictions on non-emergency weekend maintenance: Except for cases of emergencies, repairs and services such as garden, yard and pool maintenance are not to be performed between 5 PM on Friday and 8 AM on Monday at homes with vacation rental permits.
- This isn’t everything embodied in the latest ordinance, but these are some of the key changes. The entire ordinance (which you can find here as a PDF) is about 22 pages.
For those who may not be aware: The adoption of Ordinance 1918 was rather controversial. Most of the changes embodied in 1918 were previously adopted by the City Council as Ordinance 1907, which was ultimately repealed in response to a referendum petition launched by a group called Citizens for a Better Palm Springs. If you’re interested in the history of that, see my articles “Revised Palm Springs Vacation Rental Ordinance (№1918) Comes Back to City Council for Vote” and “Palm Springs Vacation Rental Ordinance to be Reconsidered by City Council.”
To Whom does the Vacation Rental Ordinance Apply?
It’s not just those who offer (or desire to offer) their homes as short-term accommodations who should be familiar with the city’s Vacation Rental Ordinance. The ordinance can actually apply in some ways that may seem surprising or unexpected:
Long-term Rental Landlords
Owners of long-term rental properties should be aware that violations of the Vacation Rental Ordinance are assessed against the property’s owner. We’ve already seen one case where long-term renters of a home were offering it for short-term stays via a vacation rental website without a permit and, apparently, unbeknownst to the owner. The owner was issued a “Failure to Register” citation and $5000 fine. The owner successfully appealed the citation on the grounds that they had not allowed nor been aware of the renter’s actions.
(Though the owner seems to have been admonished by the City Attorney to, “pay attention to his tenants and use of the property.” I do not know if, after the owner’s successful appeal, whether the tenant was cited instead. But read on for a similar case where a long-term tenant was cited.)
This is but one example. I am also aware of citations having been issued to owners of long-term (monthly/seasonal) rental properties who have been cited for “Failure to Register” because their properties were advertised in a way that might imply that the property is available for short-term stays.
(Many monthly/seasonal property renters also use services such as Airbnb, VRBO, and the like to advertise their availability. Having calendar/availability settings configured in such a way that would make the property appear in search results for stays of 28 days or less — regardless of the intent, or lack of intent, around such settings — has been interpreted as a violation of the advertising provisions of Ordinance 1918 and as “operating a vacation rental” and, as a result, citations have been issued to such owners.)
Long-term Rental Tenants
[Updated Feb 15, 2018 with new info based on a recent appeals case.] The flip-side of the above: Long-term rental tenants (regardless of whether they reside in single-family homes, condominiums or apartments) should be aware that they can’t sublet the properties they rent as short-term rentals.
Were they to try and apply for a permit, they would likely be denied as they would be unable to show proof of ownership. And, of course, to sublet the property as a short-term rental without a permit is prohibited.
The current version of the ordinance doesn’t seem to anticipate a situation where a rental tenant — with permission from the owner — might seek a short-term rental permit. However, there is evidence that such situations exist.
There’s been an interesting appeal of a “Failure to Register” citation that was issued to a long-term rental tenant. (This case happened after the case I describe above where an owner was cited for the illegal short-term rental actions of their tenant.) The tenant claims to have been given bad information by the City about permitting requirements for vacation rentals and only learned of the correct procedure upon being issued a citation. The tenant’s landlord (the home’s owner) appeared at the appeal hearing and testified in support of the tenant (so, presumably, the landlord was OK with the tenant’s desire to sublet the home).
Ultimately, the citation to the tenant (and her permanent ineligibility for receiving a vacation rental permit) was upheld. (The case against the tenant is described here and the outcome of appeals board hearing is described here.)
Aside: If the inconsistency in the handling of these two similar cases — one where the owner was cited and the other where the long-term tenant was cited — is puzzling to you, you’re not alone. I’m not a lawyer, but from my reading of the ordinance and Vacation Rental Compliance Department’s application materials, it seems that the letter of the law does not allow anyone but the owner of a property to obtain a permit. Further, since violations and citations are also associated with the property and its owner, it’s not obvious to me that anyone but an owner can be cited for violations of this type. At any rate, this would seem to be one of those areas where the ordinance needs clarification…
Full-time Resident Homeowners
Resident owners of homes in Palm Springs should be aware that the definition of a vacation rental stay does not require that the home was “advertised” as such nor that any rent was paid. Even “gifted” or “granted” short-term stays are governed by the Vacation Rental Ordinance (see this Administrative Regulation that defines “Operation of a Vacation Rental” posted in July 2017).
I’m unsure how common it is for Palm Springs homeowners to allow non-resident friends or family members to stay in their homes in the owner’s absence — and I’m not yet aware of a situation where such activity has garnered a citation. However, based on enforcement actions we’ve seen so far, it would not surprise me if such a situation arose.
Similarly, the activity of “house swapping” or “home exchanges” — where the owner of a home trades accommodations with another owner somewhere else (for example, while each of them is on vacation) —could be construed as a violation of the Vacation Rental Ordinance, if the exchange is for less than 28 days and the owner does not have a Vacation Rental Registration Certificate.
I don’t have any insight into how popular or common home swaps might be in Palm Springs. But I will note that, just as in the case of “traditional” vacation renting, there are a variety of online services that help to organize and facilitate such exchanges and this may be fueling a rise in the popularity of such practices.
It should be noted that even trying to advertise, arrange or negotiate such a short-term home exchange (without first obtaining a permit) would be considered a violation.
Part-time Resident or Non-resident Homeowners
Similarly, non-resident or part-time resident owners of second/vacation homes in Palm Springs should be aware that allowing friends or family members stay in those homes for short periods may be considered a violation of the Vacation Rental Ordinance (unless, of course, they have a valid Vacation Rental Permit) — even if they have no intention of engaging in what we might typically understand as “operating a vacation rental.” (The same would apply for short-term home exchanges, as discussed previously.)
Aside: Are there similar “surprising” or unexpected implications of the homesharing ordinance? I’m not yet sure. The definition of Homesharing includes a compensation component. So, it would seem that casually hosting overnight guests in one’s home does not put one at risk of violating the homesharing ordinance, unless one does so in exchange for compensation. However, it’s unclear to me if the July 2017 Administrative Regulation is meant to clarify only “vacation rental” stays (where the owner is not present) or if it’s also meant to clarify Homeshare stays (where the owner is present). As we say here on the interweb, “I am not a lawyer.”
Post Script: The Measure C Vacation Rental Ban Puts Effective Vacation Rental Enforcement at Risk
Palm Springs Measure C — a ballot measure which attempts to ban the vast majority of short-term rentals in Palm Springs — is coming to the June 2018 ballot. One of the major problems with Measure C is that, while making nearly all existing Palm Springs vacation rentals illegal, it also would also result in the dismantling of the City’s Vacation Rental Compliance Department and enforcement capabilities.
As noted by our Mayor and City Council, bans do not work. Illegal short-term rentals will appear or remain, but the City will be without resources to enforce the rules against them. A small number of legal rentals will remain, but enforcement resources for ensuring their ongoing compliance with the ordinance will be severely curtailed.
The City Attorney’s impartial analysis of Measure C confirms this, writing, “Measure C passage would leave the City unable to fund vacation rental enforcement at or near present levels, and result in the termination of the City’s Vacation Rental Compliance Department as it currently operates.”
If you share my support for sensible short-term rental regulations and effective enforcement, I encourage you to join me in opposing Measure C. You will find yourself in good company: Our Mayor and City Council, Police and Firefighters, Palm Springs Chamber of Commerce, Main Street Palm Springs, Palm Springs Hospitality Association, PS Resorts, and many others oppose Measure C. Learn more about why we should Vote NO on Palm Springs Measure C at WeLovePalmSprings.org.
For Further Reading
Other articles in this series:
- Part 1: What is a Vacation Rental, Anyway?
- Part 2: The Basics of Vacation Rental Regulations in Palm Springs
- Part 3: Was there a “Failure of Enforcement” Under the Previous Ordinance?
- Part 4: Is Enforcement of the Palm Springs Vacation Rental Ordinance “Working”? If so, How?
As other articles in this series are published, I’ll link to them here.
BTW: If you have specific questions or suggestions for future topics in this series, please share them in the comments! Additionally, if you found this article useful, do express your appreciation by giving it a “clap.” (This is the Medium version of a “like.” Yes, I find the term funny as well.)