HomeMy WebLinkAboutStatus Update - Short Term Rentals (STRs)CITY COUNCIL STAFF REPORT
CITY OF PALM DESERT
COMMUNITY DEVELOPMENT DEPARTMENT
MEETING DATE: November 14, 2019
PREPARED BY: Kevin Swartz, Associate Planner
REQUEST: Receive and File a status update regarding short-term rentals within the
City of Palm Desert.
Recommendation
By Minute Motion:
1. Receive and File a status update regarding short-term rentals (STRs) as
directed by the City Council
Backaround Analvsis
During calendar year 2017, the City had 1,228 licensed STRs, which were divided into four
(4) residential zoning districts. Below is a chart showing the zoning districts, the total number
of residential units within each district, the total number of STRs, and percentages for each
district.
2017 STR Statistics
Zoning
Total Residential
Total STR Permits
Percentage of
Designation
Units
STRs
Planned Residential
24,010
840
3.5%
(PR)
Residential Single-
3,977
212
5.3%
Family (R1)
Residential Mixed-
1,893
64
3.4%
Family (R2)
Residential Multiple-
1,667
46
2.7%
Family R3
On January 15, 2018, the new STR Ordinance, including City Council's new regulations took
effect, as well as the plan for phasing out all existing permits in R1/R2 zones by December 31,
2019.
On September 27, 2018, staff provided an update to the City Council consisting of permit
statistics, enforcement efforts, a discussion of the non -gated residential neighborhoods zoned
PR, operations, and hardship extension requests.
November 14, 2019 — City Council Staff Report
Update regarding STRs
Page 2 of 5
Discussion
This update includes information from January 15, 2018, to present consisting of permit
statistics, non -gated residential neighborhoods zoned PR, enforcement efforts, operations, and
the STR hardship extensions.
Permit Statistics
Prior to the 2018 STR Ordinance update, the City had 1,228 STRs. Currently, the City has
1,139 STRs. The decline in STRs is due to homeowners selling their homes, or not renewing
their permits within the R1 and R2 zones, and the City is working with homeowners'
associations (HOAs) to not issue/renew permits where HOA does not allow rentals for less
than 30 days. Below is a summary of permits issued:
Existing STR
New On -Site
Inactive Permits
Total
Existing R1/R2
Permits
Owner
(No longer renting,
Number of
Permits Set To
(Pre- 2018)
Permits
sold home, etc.)
Active STR
Sunset in 2020
(R-1 and R-2)
Permits
1,228
(276 were
40
(129)
1,139
218
zoned R1/R2)
Non -sated Residential Neiahborhoods Zoned PR
At the direction of City Council, staff has been monitoring non -gated PR neighborhoods since
some residents have expressed concerns. The main concern from the residents is that their
neighborhoods should have the same standards as R1/R2 properties since they function the
same. Below please find a description of each neighborhood and associated complaint
history:
• Shepherd Lane - The neighborhood is mostly off Shepherd Lane, north of Frank
Sinatra Drive, west of Portola Avenue, and south of Gerald Ford Drive.
2018 — Three complaints
2019 — Five complaints
Hovlev Lane West — This neighborhood is east of Monterey Avenue and west of
Portola Avenue.
2018 — Zero Complaints
2019 — Zero Complaints
The Grove - This neighborhood is west of Deep Canyon Road, south of Fred Waring
Drive, and north of Highway 111.
2018 — Zero Complaints
2019 — 30 Complaints. Letters have been received from all 30 residents
GAPlanning\Kevin Swartz\Word\City Ordinances\Short-Term Rentals\Staff Reports= Staff Report Update STRs Nov 14.docx
November 14, 2019 — City Council Staff Report
Update regarding STRs
Page 3 of 5
• Lavender Way — This neighborhood is east of Deep Canyon Road, west of Palm
Desert High School, north of Fred Waring Drive, and south of the Whitewater Storm
Channel.
2018 — Two Complaints
2019 — Five Complaints
Below is a chart showing the existing and new STRs within the four neighborhoods:
Neighborhoods
Existing STR
New STR
Total STR Permits
Permits through
Permits 2019
2018
Shepherd Lane
26
3
29
Hovley Lane West
21
2
23
The Grove
3
0
3
Lavender Way
5
1
6
Staff is closely monitoring these four neighborhoods. If there is a surge of new permits, staff
will bring an action item back for the City Council's consideration to include these
neighborhoods with similar standards as the R1 and R2 zones.
Enforcement and penalties
Enforcement and penalties were the largest topics of discussion during the 2017 year -long
STR study. Many residents stated that the City needed to do a better job with enforcement.
The City Council approved the following:
• Stricter fines ($1,000, $3,000, and $5,000) for owners, renters, and management
companies.
• Stricter fines ($5,000) for an unlicensed STR.
• Three (3) violations within a year results in loss of the permit.
• Swing shift Code Compliance Officer on duty Thursday through Sunday from 4:00 p.m.
to 1:00 a.m. The hours are being adjusted during the festival months and busy holiday
weekends.
• Professional services contract with STR Helper to manage a 24/7 hotline and identify
non -permitted STR listings.
From January 15, 2018, to present, the City has handled 432 total cases and issued 106
administrative citations. Most of the cases and citations were issued to property owners
operating an unlicensed STR, while the others were noise and trash bin violations.
GAPlanning\Kevin Swartz\Word\City Ordinances\Short-Term Rentals\Staff Reports= Staff Report Update STRs Nov 14.docx
November 14, 2019 — City Council Staff Report
Update regarding STRs
Page 4 of 5
Below is a matrix indicating fines issued from January 15, 2018, to present:
Number of Dismissed/Suspended Amount of
Amount of
Notices of
Citations by Hearing Officer Administrative
Administrative
Lien for
Fines Issued
Fines
Failing to
Collected
Pay
106 36 $464,000
$145,168
20
Staff believes that the new ordinance, including stricter penalties, is yielding positive results.
Staff continues to hear many positive outcomes from having the availability of a swing shift
compliance officer, as well as the 24-hour hotline. While there are a few cases of alleged
abuses of the STR ordinance, staff believes they are limited.
On June 30, 2018, staff extended the contract for one additional year with STR Helper.
Overall, staff is satisfied with the services provided by STR Helper. STR Helper provides staff
a web -based software that scans internet listings for illegal activity. In several instances, data
provided from STR Helper has aided Code Compliance Officers in finding illegal STR
operators.
Operational and Communication Reauirements
These two categories were created because many residents stated that the previous
ordinance lacked the accountability of the owners, operators, and renters. Below is a
summary of what was added to the new ordinance:
Prior to occupancy of a STR unit, the operator must do the following:
• Meet and greet the renter on -site and obtain his or her name, address, and a copy of
a valid government -issued identification.
• Provide the renter with a copy of the Good Neighbor Brochure.
• Provide the renter with information about the STR regulations.
• Require the renter to execute a formal acknowledgment in the form acceptable by the
City that he or she is legally responsible for compliance of all occupants of the STR
unit and their guests, with all applicable laws, rules, and regulations pertaining to the
use and occupancy of the STR unit. Provide the Responsible Person with the
Operator's 24-hour availability information.
• Provide the renter with a copy of the maximum number of overnight occupants and the
maximum number of daytime occupants as permitted pursuant to the chapter.
• Provide the Responsible Person with a copy of trash pick-up day and applicable rules
and regulations pertaining to leaving or storing trash on the exterior of the property.
• Include in the Good Neighbor Brochure that no music will be played outdoors after
10:00 P.M.
To date, staff believes these new requirements are working for both operators and surrounding
residents. As mentioned above, complaints have been lower since the new standards have
been in place.
G1Planning\Kevin Swartz\Word\City Ordinances\Short-Term Rentals\Staff Reports= Staff Report Update STRs Nov 14.docx
November 14, 2019 — City Council Staff Report
Update regarding STRs
Page 5 of 5
STR Hardship Extension process
At its meeting of May 10, 2018, the City Council adopted an STR Hardship Extension process
for considering Hardship Extensions. The policy allows for the possibility of extending an STR
permit in the R1/R2 zones if the owner has not reasonably recovered the investment in the
property.
Since the last update (September 27, 2018), staff has received eight Hardship Extension
applications. To date, the City has granted four extensions, issued two denials, and two are
in the reviewing stage. Below please find extension periods for the four properties listed
above.
• STR 2016-042322: Received an extension from December 31, 2019 to March 2022.
• STR 2017-047231: Received an extension from December 31, 2019 to December 31,
2020.
• STR 2016-043345: Received an extension from December 31, 2019 to December 31,
2021.
• STR 2016-043877: Received an extension from December 31, 2019 to December 31,
2020.
Fiscal Analvsis:
There is no Fiscal Analysis impact related to this staff report.
LEGAL REVIEW DEPT. REVIEW FINANCIAL ASSISTANT
REVIEW CITY MANAGER
4W. Ha reaves Ryan Stendell J t Moore Andy Fire ine
Director of Comm. Dev. Director of Finance Assistant ity Manager
City Manager Lauri Aylaian:
APPLICANT: City of Palm Desert
GAPlanning\Kevin Swartz\Word\City Ordinances\Short-Term Rentals\Staff Reports= Staff Report Update STRs Nov 14 docx