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Home My WebLink About3A - Presentation0Vacation Rental Work Group Recommendation September 29, 2022 OFFICE OF SPECIAL PROGRAMS 3A - 1 Vacation Rental Workgroup -Overview OFFICE OF SPECIAL PROGRAMS •At the direction of City Council,City staff announced the recruitment for vacation rental work group members to review data and draft recommendations; •Following a public application process,a total of 124 applications were received; •Three members were recommended by City staff and the remaining eight members were randomly selected; •A total of five meetings were conducted. 3A - 2 Vacation Rental Workgroup Process OFFICE OF SPECIAL PROGRAMS The Goal of appointing a Vacation Rental Workgroup representing all the interests in the issue, was to create a balanced recommendation acceptable to all workgroup members. Workgroup members were advised of the Rules of Engagement which outlined ground rules for effective and respectful communication and the Ground Rules for Decision-making. The group recommendation was reached utilizing the concept of Majority Consensus. “Here consensus does not mean 100% agreement on everything by all participants, it means that each individual is able to accept a proposal or idea of the majority of participants and are willing to accept a proposal or idea.” 3A - 3 OFFICE OF SPECIAL PROGRAMS Vacation Rental WorkgroupMission Members volunteered to assist with discussion items around the Vacation Rental Ordinance and provide recommendation for future policy considerations. The workgroup mission is to: •Provide input on items regarding vacation rentals •Create majority consensus and provide recommendations 3A - 4 Vacation Rental Workgroup Issues Reviewed OFFICE OF SPECIAL PROGRAMS •Vacation Rental Density; •Vacation Rentals as an ancillary use or secondary use of one’s home; •Impacts on Housing Supplies. 3A - 5 Vacation Rental Workgroup Recommendations OFFICE OF SPECIAL PROGRAMS The workgroup makes the following recommendations to the City Council: •2,500 Citywide vacation rental permits cap, with the stipulation that all submitted permit applications will be processed as well as applications for properties that have an escrow closing date within 30 days of the adopted ordinance; •10% Neighborhood cap. 3A - 6 Vacation Rental Density –Citywide Cap OFFICE OF SPECIAL PROGRAMS •The task force,at various times during our sessions, discussed the issues of density and overall numbers of vacation rental units in our community. •Various data sources were reviewed by the group. •The group unanimously agreed a citywide vacation rental cap was needed. •The group voted on the number of citywide permits a twice,the 2,500 recommendation was reached by majority consensus. 3A - 7 OFFICE OF SPECIAL PROGRAMS Vacation Rental Density –Neighborhood Cap •The group addressed the over-saturation of vacation rentals throughout the City. •Specific concerns included: The loss of residential community in neighborhoods with high percentage of vacation rental properties; The number of second homes not utilized as rental properties Impacts of vacation rentals to local housing stock The impact of restrictions on the tourism industry •Percentages presented to the group for discussion ranged from 6% to 20% •On August 30, 2022, by majority consensus the workgroup reached a recommendation of 10% 3A - 8 OFFICE OF SPECIAL PROGRAMS Vacation Rental Density –Secondary and Ancillary Use •The group reviewed data on Contract Summary submissions and Ordinance 1918 conditions, covenants, restrictions,and annual contract limits. •Majority consensus agreed that the City’s regulations for limiting contract summaries,barring corporate ownership,and limiting financial interest in vacation rental ownership as sufficient in regulating secondary and ancillary use. •Majority consensus determined to make no recommendation on this topic. 3A - 9 OFFICE OF SPECIAL PROGRAMS Vacation Rental Density –Impacts to Housing The workgroup discussed the impact to vacation rentals in relationship to housing. After lengthy discussion and review of multiple articles,the workgroup was unable to reach a majority consensus to make a recommendation. The workgroup considered in their discussion: •Vacation rental properties take properties that would otherwise be occupied by long term tenant(s) or owner(s) •Palm Springs needs the construction of affordable housing, including multi -family residences •The group agreed the need to maintain vacation rentals as a secondary and ancillary use with continued strict enforcement of the ordinance. 3A - 10 OFFICE OF SPECIAL PROGRAMS Vacation Rental Density Data •To guide discussion relating to the city Vacation Rental density,staff provided to the group data (attachment “B”in the report)relating to: •Organized neighborhoods household unit count and Vacation Rental count. •Household unit information from Housing Element Survey •Comparing the information allowed the group to review: •An overall city cap number and what this percentage of household units would be. •A review by organized neighborhood and what a percentage cap per neighborhood would look like. 3A - 11 OFFICE OF SPECIAL PROGRAMS 3A - 12 OFFICE OF SPECIAL PROGRAMS 3A - 13 OFFICE OF SPECIAL PROGRAMS Vacation Rental Density Data •Additional material to support the density discussion (Attachment ”B”in the report): •Special Pro gram Compliance application volume and trends •Vacation Rental Condominium information •Hotel data •Vacation Rental by Council District data 3A - 14 OFFICE OF SPECIAL PROGRAMS Vacation Rental Density Data Apr-17, 2135.00 Sep-18, 1762.00 Mar-20, 2077.00 May-20, 1999.00 Sep-21, 2271.00 Jul-22, 2465.00 2,500 Vacation Rental Cap 1400.00 1600.00 1800.00 2000.00 2200.00 2400.00 2600.00 Total registrants 4/2017-07/2022 3A - 15 OFFICE OF SPECIAL PROGRAMS Vacation Rental Ancillary Data •The group was provided information provided from the March 29th Vacation Rental Study Session. •Overview of the Ordinance findings •Vacation Rental contract limitations •Median summaries submitted •Frequency of summaries submitted •Applicable conditions, covenants, or other restrictions on real property. 3A - 16 OFFICE OF SPECIAL PROGRAMS Vacation Rental Ancillary Data 3A - 17 OFFICE OF SPECIAL PROGRAMS Vacation Rental Ancillary Data 3A - 18 OFFICE OF SPECIAL PROGRAMS Vacation Rental Housing Discussion •The group was provided reports on potential impacts from Vacation Rentals towards the housing stock. •Additionally,the group reviewed material showing vacant households, which did not include Vacation Rentals,to further the discussion on housing stock and the makeup of a neighborhood.(Attachment “E”in the report 3A - 19 OFFICE OF SPECIAL PROGRAMS Vacation Rental Housing Discussion From Forbes: "The Airbnb Effect on Housing & Rent" https://www.forbes.com/sites/garybarker/2020/02/21/the-airbnb-effect -on-housing-andrent/? sh=7b99799e2226 From the Economic Policy Institute (a non-partisan think tank): https://www.epi.org/publication/the-economic-costs-and-benefits-of-airbnb-no-reason-for-localpolicymakers- to-let-airbnb-bypass-tax-or-regulatory-obligations/ From the Harvard Business Review https://hbr.org/2019/04/research-when-airbnb-listings-in-a-city-increase-so-do-rent-prices From the Milken Institute https://milkeninstitute.org/report/short-term-rentals-california-tourism-housing 3A - 20 OFFICE OF SPECIAL PROGRAMS Vacation Rental Housing Discussion 3A - 21 OFFICE OF SPECIAL PROGRAMS Vacation Rental Housing Discussion 3A - 22 OFFICE OF SPECIAL PROGRAMS Vacation Rental Housing Discussion 3A - 23