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Home My WebLink AboutA. Request for direction regarding Short-Term Rentals in the R-1 Zone CITY OF PALM DESERT DEPARTMENT OF COMMUNITY DEVELOPMENT PLANNING COMMISSION STAFF REPORT REQUEST: DIRECTION REGARDING SHORT-TERM RENTALS IN THE R-1 ZONE. SUBMITTED BY: Tony Bagato, Principal Planner DATE: January 19, 2010 Recommendation Direct staff to either prepare a Zoning Ordinance Amendment prohibiting short- term rentals in the R-1 zone, or to continue to allow them as a Conditional Use and approve them on a case-by-case basis. Executive Summary Currently the R-1 zone allows a single-family home to be rented or leased for periods less than 30 days with a Conditional Use Permit (CUP). On May 19, 2009, the Planning Commission, on a 4-1 vote, denied a CUP application by a homeowner on Utah Circle to operate her second home as a short-term rental in an R-1 zone. The majority of the Commissioners believed short-term rentals are not compatible with single-family neighborhoods. The applicant appealed the decision, and the City Council denied the appeal, upholding the denial by the Planning Commission. Staff is currently aware of at least nine homeowners within the R-1 zone who are renting or leasing homes for less than 30 days without CUPs. Before staff contacts any of the homeowners operating short-term rentals, staff is requesting direction from the Planning Commission to either prohibit them in the R-1 zone or to continue to review each one on a case-by-case basis, potentially approving them with conditions and restrictions. Background 1. Conditional Use Permits (In General): A Conditional Use Permit (CUP) allows a local government the ability to permit a range of land uses required for a community to function and to provide flexibility to land use owners, while maintaining control over individual properties. Since each individual property has certain characteristics, conditional uses require Staff Report Short-term Rental Discussion January 19, 2010 Page 2 of 4 special consideration to make sure that they are properly located while meeting the objectives of the Zoning Ordinance. In order to achieve this purpose, the Planning Commission has the authority to approve or deny applications for CUPs for any conditional use prescribed in each zoning district. A Conditional Use Permit is approved with conditions to make a certain use more compatible with the surrounding land uses within the zone it is located. As an example, the following uses may be permitted win the R-1 zone with a CUP: A. Boardinghouses and rooming houses; B. Churches, convents, monasteries and other religious institutions; C. Day nurseries and nursery schools; D. Fire stations; E. Private recreational facilities such as country clubs, tennis and swim clubs, golf courses, with incidental, limited commercial uses which are commonly associated and directly related to the primary use; F. Private schools and colleges, not including art, business, or trade schools or colleges; G. Public educational institutions; H. Public utility and public service facilities; I. Commercial parking lots when directly adjacent to the C-1 general commercial zone and consistent with recommendations of an adopted specific plan; J. Professional office parking lots when directly adjacent to the O.P. office professional zone and consistent with the recommendations of an adopted specific plan. K. Rental or leasing of a single-family dwelling for periods of less than thirty days. 2. Short-term Rentals (less than 30 days): As a resort community, there are many second homes within Palm Desert and some are rented out on a short term basis to vacationers for periods ranging from a single weekend to several months. The vast majority of these rental homes are located in Planned Residential (PR) zoned gated communities and country clubs. These communities are regulated through private CC&Rs that typically control and manage these vacation rentals. Vacation rentals in these communities have not generated any complaints. In 2000, planning staff began to receive complaints about a few homes located in the R-1 zone being rented as vacation rentals. At that time, the Zoning G:\Planning\Tony Bagato\Word Files\Formats\Staff Reports\MISC\Short Term Rentals\Short Term Rentals Staff Report Planning Commission.doc Staff Report Short-term Rental Discussion January 19, 2010 Page 3 of 4 Ordinance did not specifically restrict the permitted occupancy length of a rental in the R-1 zone. Since homes located in the R-1 zone are not located within gated communities or country clubs, staff was concerned about the land use compatibility of a short-term rental in an R-1 zone. On September 14, 2000, the City Council approved a zoning ordinance amendment allowing short-term rentals upon approval of a Conditional Use Permit following a noticed public hearing by the Planning Commission. Since the ordinance was enacted, staff has processed five applications for short-term rentals in the R-1 zone. Two of the five have been approved, while three have been denied. Staff typically becomes aware of a home being operated as a short-term rental by a complaint from an adjacent resident. Similar to hotels or motels, single-family homes rented for less than 30 day periods located in any residential zone are required to pay the City a Transient Occupancy Tax (TOT). This tax is nine percent (9%) of the rent charged by the operator, paid to the City and used in the general fund. According to the City's Finance Department, the current amount of money being provided to the General Fund from short-term rentals is about $2,800 annually.. Discussion: On May 19, 2009, the Planning Commission, on a 4-1 vote, denied a CUP application by a homeowner on Utah Circle to operate her second home as a short-term rental in an R-1 zone. The majority of the Commissioners expressed the opinion that short-term rentals are not compatible with single-family neighborhoods. The applicant appealed the decision, and the City Council denied the appeal, upholding the denial by the Planning Commission. Since 2000, only two out of five CUP applications for short-term rentals have been approved by the Planning Commission. Staff has become aware of at least nine properties within the R-1 zone that are being operated as short-term rentals without a CUP. Based on the most recent denial on Utah Circle, staff is requesting direction from the Planning Commission on whether or not to continue to allow short term rentals as a conditional use or to process a zoning ordinance amendment prohibiting them from the R-1 zone. Prohibiting short-term rentals within the R-1 zone will not significantly impact the City's General Fund since the amount of revenue currently provided annually is about $2800. Since many homes within gated communities or country clubs are regulated through private CC&Rs, staff is not proposing the prohibition within the Planned Residential zone. G:\Planning\Tony Bagato\Word Files\Formats\Staff Reports\MISC\Short Term Rentals\Short Term Rentals Staff Report Planning Commission.doc Staff Report Short-term Rental Discussion January 19, 2010 Page 4 of 4 Environmental Review This staff report is currently for discussion purposes and therefore requires no further environmental analysis at this time. Submitted by: Department Head: Tony Ba to Lauri Aylaian Principal Planner Director of Community Development G:\Planning\Tony Bagato\Word Files\Formats\Staff Reports\MISC\Short Term Rentals\Short Term Rentals Staff Report Planning Commission.doc