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HomeMy WebLinkAboutInfo Status Update Short Term Rentals (STRs) PDMC 5.10.120(E) - Imposition of FinesCITY COUNCIL STAFF REPORT CITY OF PALM DESERT DEPARTMENT OF COMMUNITY DEVELOPMENT MEETING DATE: September 27, 2018 PREPARED BY: Kevin Swartz, Associate Planner REQUEST: Receive and File a status update regarding short-term rentals within the City of Palm Desert, and direct staff to initiate clarifying language to the Palm Desert Municipal Code regarding imposition of fines. Recommendation By Minute Motion: 1. Receive and File a status update regarding short-term rentals (STRs) as directed by the City Council at its regular meeting of December 14, 2017. 2. Direct staff to prepare a Zoning Ordinance Amendment (ZOA) to Section 5.10.120 (E) of the Palm Desert Municipal Code (PDMC), removing language "up to" five -thousand dollars. 3. Provide any additional directives to staff related to STRs. Executive Summary Approval of staff's recommendation would provide a status update on STR use as directed by the City Council at its meeting of December 14, 2017. Additionally, staff is recommending one minor revision to the PDMC; removing the term "up to" five thousand dollars as it relates to fines for unpermitted STR use. If so directed by the City Council, staff would return at a later date with a formal ZOA. Background Analysis During the calendar year of 2017, the City had licensed 1,228 STRs, which were divided into four (4) residential zoning districts. Below is a chart showing the zoning districts, total number of residential units within each district, total number of STRs, and percentages for each district. Zoning Total Residential Total STR Permits Percentage of Designation Units STRs P.R. 24,010 840 3.5% R-1 3,977 212 5.3% R-2 1,893 64 3.4% R-3 1,667 46 2.7% September 27, 2018 — City Council Staff Report Update regarding STRs Page 2 of 5 During a year -long moratorium on issuance of new licenses, the City created a Committee that discussed extensively four (4) main topics; Enforcement/Penalties; Operational Requirements; Communication; and Density. The Committee met four (4) separate times with the last meeting held on July 6, 2018. After the last meeting, staff created amendments to the existing ordinance for City Council consideration. The City Council held three (3) separate public hearing meetings (October 26, November 16, and December 14, 2017). The City Council adopted an ordinance implementing new policy standards for STR operations. Part of the updated standards included not issuing any new STR permits in the R1/R2 zones and phasing out all existing permits in those zones by December 31, 2019. The ordinance as adopted included language (PDMC 5.10.070 C), which provides for permit renewals past the 2019 sunset date in individual cases if necessary to avoid unconstitutional takings. Discussion On January 15, 2018, the new STR Ordinance including City Council's new regulations took effect. An update was prepared by staff consisting of permit statistics, enforcement efforts, operations, and hardship extension requests: Permit Statistics Since implementation of the new STR ordinance, staff has issued approximately 230 new permits, largely in Planned Residential (PR) zoning districts. Below is a summary of permits issued: Existing STR New STR New On -Site Inactive Permits Total Permits Permits (2018) Owner Permits (no longer renting, Number of (Pre- 2018) (Non R1/R2) 2018 sold home, etc.) Active STR (R-1 and R-2) Permits 1,228 204 30 (97) 1,365 Staff has tried to keep in close contact with the community related to STR operations, and is largely hearing positive reviews. One concern raised relates to a few neighborhoods with a PR zoning designation that are non -gated and operate similar to an R-1 district. The areas described above are as follows: • Shepherd Lane - The neighborhood is mostly off Shepherd Lane, north of Frank Sinatra Drive, west of Portola Avenue, and south of Gerald Ford Drive. • Hovlev Lane West — This neighborhood is east of Monterey Avenue and west of Portola Avenue. • The Grove - This neighborhood is west of Deep Canyon Road, south of Fred Waring Drive, and north of Highway 111. G \Planr'ng\Ryan Stendell\Staff Reports\2018\September 27\CC Staff Report Update STRs docx September 27, 2018 — City Council Staff Report Update regarding STRs Page 3 of 5 • Lavender Wav — 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. Staff has received three (3) requests from neighbors (attached) within the Shepherd Lane neighborhood, and two (2) from residents within the Lavender Way neighborhood who would like to see the same standards of the R-1 and R-2 zones applied in regards to the issuance of STR permits. They have concerns with the current and future numbers of STRs within their neighborhoods. Below is a chart showing the existing and new STRs within the four (4) neighborhoods: Neighborhoods Existing STR Permits New STR Permits (2018) Shepherd Lane 15 11 Hovley Lane West 11 9 The Grove 3 0 Lavender Way 2 3 Based on the existing and new permits, and the lack of complaints/citations in these areas, staff does not believe that there is a need to revise the ordinance at this time. Staff will keep a close eye on these four (4) neighborhoods, and if there is a surge of new permits, or if the homes are creating a public nuisance, then staff will bring an action item back for City Council's consideration to include these neighborhoods with the similar standards as the R- 1 and R-2 zones. Enforcement and Penalties Enforcement and Penalties was the largest topic 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 (up to $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 Thursdays 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 issued 59 administrative citations. Most of the citations were issued to property owners operating an unlicensed STR, while the others were noise and trash bin violations. Below is a matrix indicating fines issued since implementation of the new STR ordinance: G \Planning\Ryan Stendell\Staff Reports\2018\September 27\CC Staff Report Update STRs docx September 27, 2018 — City Council Staff Report Update regarding STRs Page 4 of 5 Number of Citations Dismissed/Suspended Amount of by Hearing Officer Administrative Fines Issued 59 21 $285,000 Amount of Administrative Fines Collected $70,000 Notices of Lien for Failing to Pay 14 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. Every complaint is taken seriously, and is followed up on with the reporting party. While there are a few cases of alleged abuses of the STR ordinance, staff believes they are limited. Section 5.10.120 Violations E states operating a STR without a permit shall result in a fine in an amount up to five -thousand dollars ($5,000). The language "up to" is difficult for Code Compliance Officers and the City's Hearing Officer in determining what a fair fine amount should be. Staff is requesting to remove the "up to" language and set the fine amount at five - thousand ($5,000) dollars for unpermitted STR use. Operational and Communication Requirements These two categories were created because many residents stated that the previous ordinance lacked 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. So far, 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. G \Plann ng\Ryan Stendell\Staff Reports\2018\September 27\CC Staff Report Update STRs docx September 27, 2018 — City Council Staff Report Update regarding STRs Page 5 of 5 STR Hardship Extension process On May 10, 2018, the City Council adopted Hardship Extension process for considering Hardship Extensions. The policy allows for the possibility of extending an STR permit in the R-1/R-2 zone if the owner has not reasonably recovered the investment in the property. If the total investment is more than the total actual and potential revenue (projected at 12/2019), the owner is accorded a hardship extension calculated to provide additional time to generate sufficient revenue to offset a reasonable investment. Staff has had numerous conversations with property owners about the application, but to date, no Hardship Extension applications have been formally submitted. Fiscal Analysis: There is no Fiscal Analysis impact related to this staff report. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW CITY MANAGER N/A Robert W. Hargreaves City Attorney N/A Ryan Stendell, Director of Community Janet Moore Development Director of Finance APPLICANT: City of Palm Desert Lauri Aylaian City Manager ATTACHMENT: Three (3) letters from residents within the Shepherd Lane neighborhood G \Planning\Ryan Stendell\Staff Reports\2018\September 271CC Staff Report Update STRs docx Dovt,aJ stevevts y-4-o '52 Chi-14401e CLYCLe PaLm. Desert, CA 92212 (y- o) y-73-5238 Ken Swartz Planning Department City of Palm Desert 73510 Fred Waring Drive Palm Desert, CA 92260 Dear Mr. Swartz: City af Palm Desert CommuallY L LP L L AU6 $ 8 Z018 August 28, 2018 I am writing to request that you amend non -gated Planned Residential neighborhoods to fall under the same category as R1 and R2 designated neighborhoods. I understand this will come before Council at the September 27, 2018 meeting. I purchased my home because of the tranquil neighborhood and the feeling of peace I have when in my backyard. Recently however, our several of my neighbors have sold their homes and investors have purchased those homes and now we have a short-term vacation rentals next door and behind me. My peace and tranquility have vanished! Those of us in this neighborhood who live here full time now must endure party noises every weekend. It's not just the loud booming music that at times is louder than our television, it's the screaming, hooting and hollering that goes on all day long and well into the early morning hours. We have seen vehicles parked on the street (and in front of my house because there is no room in front of the rental!) because there are too many vehicles to fit in the garage and driveway and walked out front to find empty beer bottles, cans and trash left on the street. We now have the vacation rental hotline in our contact list, and on speed dial. I, along with my neighbors have called to report the issues and the person handling the vacation hotline is very responsive. We miss being able to sit out on our patio and enjoy our home. Our choice now is to fight or leave and I prefer to fight for my home and neighborhood. I understand that we are not designated as an R1 or R2 neighborhood. Our neighborhood is designated as Planned Residential, however we have over 300 homes in our neighborhood and even though we are a non -gated residential area, we should have the same consideration that an R-1 or R-2 zoned neighborhood. Again, I urge you to amend non -gated Planned Residential neighborhoods to fall under the same category as R1 and R2 designated neighborhoods. Thank you for your consideration in this matter. Sincerely, ona J. Stevens Cc: The Honorable Sabby Jonathan r°'RECEIED I'�1 S CITY CLERK'S OFFICE Rez41100.1(ide PALM DESERT. C A (eeeiet- to let/� Me AUG 22 AM II: 56 69 e )-( 0f ►'Q d�. clok_ ►' The Honorable Sabby Jonathan and Council Members August 21, 2018 W j' .F Ie City of Palm Desert •� 73510 Fred Waring Drive /art- �7`- rP1e Palm Desert, CA 92260 recAfd Dear Mayor and Council Members: I am writing to request that you amend non -gated Planned Residential neighborhoods to fall under the same category as R1 and R2 designated neighborhoods. We understand this will come before Council at the September 27, 2018 meeting. We purchased our home in Palm Desert in 2014. We purchased our home because of the neighborhood and the quiet we have when in our back yard. Recently however, our neighbors sold their home and two investors purchased it and now we have a short term vacation rental behind us. Our peace and quiet has vanished. Those of us in this neighborhood who live here full time now must endure party noises every weekend and sometimes all week. It's not just the loud music that at times is louder than our television, it's the screaming, hooting and hollering that goes on all day long and well into the early morning hours. We have found broken water balloons in our yard which is dangerous for our dog if he picked it up. We have had guests here and had to go inside since we could not carry on a conversation. We also had one of the tenants/owner looking over the 10 ft wall asking about some non-existant ball in our yard. He could have come and rang our bell. We felt our privacy was invaded! We now have the vacation rental hotline in our contact list, on speed dial. We, along with our neighbors have called to report the issues and the person handling the vacation hotline is very responsive. We miss being able to sit out on our patio and enjoy our home. Our choice now is to fight or leave and we prefer to fight for our home and neighborhood. We understand that we are not designated as an R1 or R2 neighborhood. We are designated as Planned Residential, however we have over 300 homes in our neighborhood and even though we are a non -gated residential area, we should have the same consideration that an R-1 or R-2 zoned neighborhood. Again, we urge you to amend non -gated Planned Residential neighborhoods to fall under the same category as R1 and R2 designated neighborhoods. Thank you for your consideration in this matter. Sincerely, Jan Pauletich Teresa Felix 74074 Kokopelli Circle Palm Desert,Ca 92211 Ph: 442-227-4676 C O PY TO c tr-Y mn,t/4(7 &g- PATE 8/aa/i8 Co(t� K r �`awle)1 o 41 CRy of PaIm Des t g%LL awol Rewee Mowtawte j 4-083 ak .v.00le C%rcLe AUG 2 7 2018 Pa Lvu 'Desert, CA 922-r (y60) 568-1590 Community Development August 22, 2018 The Honorable Sabby Jonathan and Council Members City of Palm Desert 73510 Fred Waring Drive Palm Desert, CA 92260 Dear Mayor and Council Members: I am writing to request that you amend non -gated Planned Residential neighborhoods to fall under the same category as R1 and R2 designated neighborhoods. We understand this will come before Council at the September 27, 2018 meeting. We have lived in the great City of Palm Desert for over 50 years. Although we've worked outside the city of Palm Desert, we have never considered living in any other city in the Coachella Valley. We have lived in our current home since 2012. We purchased our home because of the tranquil neighborhood and the feeling of peace we have when in our back yard. Recently however, our neighbors sold their home and two investors purchased it and now we have a short term vacation rental next door to us. Our peace and tranquility has vanished. Those of us in this neighborhood who live here full time now must endure party noises every weekend. It's not just the loud music that at times is louder than our television, it's the screaming, hooting and hollering that goes on all day long and well into the early morning hours. We have seen vehicles parked on the street because there are too many vehicles to fit in the garage and driveway, and walked out front to find empty beer bottles and cans left on the street. We now have the vacation rental hotline in our contact list, on speed dial. We, along with our neighbors have called to report the issues and the person handling the vacation hotline is very responsive. We miss being able to sit out on our patio and enjoy our home. Our choice now is to fight or leave and we prefer to fight for our home and neighborhood. We understand that we are not designated as an R1 or R2 neighborhood. We are designated as Planned Residential, however we have over 300 homes in our neighborhood and even though we are a non -gated residential area, we should have the same consideration that an R-1 or R-2 zoned neighborhood. Again, we urge you to amend non -gated Planned Residential neighborhoods to fall under the same category as R1 and R2 designated neighborhoods. Thank you for your consideration in this matter. Sincerely, t4a and Renee Montante 13,1.LL awd Renee MoKta►nte 4-083 Ch%wool2 C.rcle PalvL& Desert, CA 922i1 (J 60) 558-1590 September 14, 2018 The Honorable Sabby Jonathan and Council Members City of Palm Desert 73510 Fred Waring Drive Palm Desert, CA 92260 Dear Mayor and Council Members: I am writing to request that you amend non -gated Planned Residential neighborhoods to fall under the same category as R1 and R2 designated neighborhoods. We understand this will come before Council at the September 27, 2018 meeting. We have lived in the great City of Palm Desert for over 15 years. Although we've worked outside the city of Palm Desert, we have never considered living in any other city in the Coachella Valley. We have lived in our current home since 2002. We purchased our home because of the tranquil neighborhood and the feeling of peace we have when in our back yard. Recently however, our neighbors sold their home and two investors purchased it and now we have a short term vacation rental next door to us. Our peace and tranquility has vanished. Those of us in this neighborhood who live here full time now must endure party noises every weekend. It's not just the loud music that at times is louder than our television, it's the screaming, hooting and hollering that goes on all day long and well into the early morning hours. We have seen vehicles parked on the street because there are too many vehicles to fit in the garage and driveway, and walked out front to find empty beer bottles and cans left on the street. We now have the vacation rental hotline in our contact list, on speed dial. We, along with our neighbors have called to report the issues and the person handling the vacation hotline is very responsive. We miss being able to sit out on our patio and enjoy our home. Our choice now is to fight or leave and we prefer to fight for our home and neighborhood. We understand that we are not designated as an R1 or R2 neighborhood. We are designated as Planned Residential, however we have over 300 homes in our neighborhood and even though we are a non -gated residential area, we should have the same consideration that an R-1 or R-2 zoned neighborhood. Again, we urge you to amend non -gated Planned Residential neighborhoods to fall under the same category as R1 and R2 designated neighborhoods. Thank you for your consideration in this matter. Sincerely, Beckie Biedebach 74071 Chinook Circle, Palm Desert, CA (760) 413-1155 Klassen, Rachelle From::.:. Sent: To: Subject: Attachments: Rachelle, :. Swartz, Kevin :.:. Friday, September 21, 2018.7:50 AM Klassen, Rachelle ... .. FW: Noise issues;.: Palm Desert:City Council Letter -;Vacation rentals - 14SEP2018:docx Attached is.a letter from a residentregarding the agenda item for short-term.rentals. Kevin Swartz = Associate -Planner Ph: 760.346;0611 . Direct: 760.776:6485 kswartz@cityofpalmdesert.org From: Beckie:Biedebach[mailto:oeckie.biedebach@conferencedirect.co.ni]:. Sent: Thursday, September 20, 2018 6:47 PM To: Stendell,.Ryan<rstendeli@cityofpalmdesert.org>; Swartz, Kevin <kswartz@cityofpalmdesert.org> Subject: Noise:issues... Hello Ryan and Ken; y letter :is self-explanatory. Everyone on Chinook is Thank you,. Beckie Beckie Biedebach Vice President: ConferenceDirect ram at Co rife rerice.Direc 74071 Chinook Circle Palm Desert, CA 92211 : 760-346-37.19 — Direct 760-413-1155 - Mobile 760-406-5077 = Fax hoping for some relief from these renters. We look forward to seeing you at one:of our upcoming signature customer and partner events! Learn more at htto://conferencedirect.com/events-media%events CD:Forum I November 27;30, 2018 I The. Waterfront Beach Resort .. . Annual Partner Meeting. I .March 3-7; 2019 I.Atlanta Marriott Marquis One Source for.Globd1 Meetings Site Selection .f ,Contract Negotiation Conference Management I Housing Management Registration Services I. Mobile•Applications I. Strategic Meetings Management: Visit our website for the latest on our:services, events and publications: www.conferencedirect.com Klassen, Rachelle From: Stanley, Jane Sent: Wednesday, September 26, 2018 7:43 AM To: Klassen, Rachelle Subject: FW: E-mail for Distribution to Mayor and Councilmembers re: STR Blind copied to the City Council From: Doug Bouche [mailto:dpbouche@gmail.com] Sent: Tuesday, September 25, 2018 6:03 PM To: Stanley, Jane <jstanley@cityofpalmdesert.org> Cc: Diane Bouche <dbouche89@gmail.com> Subject: E-mail for Distribution to Mayor and Councilmembers Dear Mayor Jonathan and Council Members Susan Marie Weber, Jan Harnik, Kathleen Kelly, and Gina Nestande: We are part-time residents of Palm Desert. We understand that the City Council is reviewing progress since implementing the new STR regulations that took effect at in January. We understand also that city officials have found very few violations over this time period, and that the majority of those were related to operating without a permit. In fairness to those STR homeowners who have been operating legally and responsibly, we kindly ask that you consider grandfathering in those R-1 and R-2 zoned properties that 1.) are currently permitted, 2.) have not had any complaints, and 3.) are current with transient occupancy tax payments. We respectfully request that you consider this proposal. Sincerely, Douglas and Diane Bouche (858) 822-8708 L- o) w Q - w K 4J ❑ CV z0= LLJ >- < 0 N 1 September 26, 2018 Palm Desert CityCouncil 73-510 Fred Waring Drive Palm Desert,CA RECEIVED.. CIPALM DE5ER C A ICE M1118 SEP 26. PM 2: 22 Dear .Mayor. Jonathan and: Members of the City Council, Thank you for .providing an opportunity for the public to: review the city's progress In implementing the new short-term, rental ordinance,'The report from city staff., • • demonstrates something we have long advocated: strongi regulations backed by • robust enforcement are the best way to balance property .rights -with quality of.life. In the eight months since the new ordinance took effect, the city issued ,59 citations, an average of"approXimately� 1.7 citations per'week+The staff report notes that most, of thecitations wererelated to operating without a permit-- not quality -of -life violations: This is consistent with data the city collected before 2018, which also showed a :small number of complaints and citations. :The evidence in -Palm Desert, and in: nearby cities:showsthat the overwhelming majority of short-term rental owners are responsible, thoughtful' people' who work. hard 'to be good neighbors andaddvalue. to>thew communities This is just as true, ofowners- in :R`=1 and R-2 neighborhoods as it: is of owners and guests in the 'rest of the city Given the limited volume of 'complaints and :citations.' even after expanding and strengthening the city's enforcement program, weurge the council to reconsider the ban: on whole -home short-term rentals:in R-1 and R-22oneg, Responsible,.. respectful` homeowners should have the same rightsin these neighborhoods as they do in the rest of the city. At the very least, in an effort to minimize harm, the council should remove the 2019 sunset and allow 'the remaining permits to expire by attrition: We also encouragethe cityto:,improve data collection, and data sharing:going forward: There is a significant:public interest: in information .about how the 'short - tern rental program is working. This week's hearing is a positive, step, but more information would be valuable to .everyone. 'TheCity of Palm Springs, for example, regularly posts detailed weekly reports of complaints and citations., These detailed updates: have helped educate: the,. public, revealing that over: the. 'course of -the, fiest year after a new -Ordinance tookeffect there, 78 percent of :rentals: were not subject to a single complaint call,and: only9percentof.rentals,. 1011 1N.10th Street,l. Austin, TX :7,8703 512:684.,1100:1 Fax 512.684.1101.I w.ww:homeaway.com received..a citation;, in the span Of 'that year. Such information would be valuab.Ie in.:: Palm: Desert as the `city: continues to evaluate its regulations: Thank you again for your careful ;consideration of this matter and our recommendations.Please feel free to contact me if HomeAway :can be of any assistance to the City's efforts regarding short-term rentals:.I can be reached at wgonzales a(�homeaway.com or.512:505.1615. Sincerely, Walter R,_'Gonzales Government Affairs Manager HomeAway 1011 W.. 5ni:Street I Austin, TX: ia703 512,684.1100-:I Fax 512.684.1101 I:www.homeaway.eom';