HOW WE GOT HERE!

LA QUINTA STVR PROGRAM SUMMARY

  • In 2008 La Quinta was financially impacted by the real estate crisis; home and business construction nearly stopped

  • When Governor Brown eliminated Development Agencies in 2011, La Quinta lost more than $92M in funding.

  • To manage the impact of these lost revenues on the city budget a structural reorganization was initiated including a 25% staff and major service contracts reduction. 

  • Council and city management sought ideas to replace these lost revenues.

  • Charging permit fees and occupancy tax on Short Term Vacation Rentals (properties renting for less than 30 days) was identified as a “new” revenue source.

  • To accommodate STVR business, in 2012 the City Council adopted Ordinance #501 and Chapter 3.25 of the City Code which permits commercial enterprises (STVRs) to operate in residential 

  • This ordinance was adopted without any qualification on the impact the STVR commercial enterprises would have on residents’ quality of life or the character of La Quinta neighborhoods.

  • STVR Transient Occupancy Tax (TOT) is the sixth largest revenue source for the City’s General Fund, contributing about 6.1%.  Residential zone STVRs make up three quarters of these rentals or 4.6%.

  • These figures are not adjusted for expenses to manage the STVR program.

  • A recent cost estimate by the city place their expenses to operate the STVR program at over $1M.

  • The unconstrained growth of STVRs in residential communities resulted in issues related to how the city was managing the STVR program and the impact these commercial businesses have on the quality of life of their adjacent neighbors. 

  • Mayor Evans “we prioritize quality of life for our residents, hence the need to make further changes to the program for successful co-existence.  I do not support banning STVRs in La Quinta.  Our city needs the $3.5M revenue…….  We do need to ensure a balance to preserve the quality of life for our residents.  I believe we can achieve that balance, as we have had the last four years of the program”. (Desert Sun Sept 24, 2020)

  • November 2019 Council approved the formation of an Ad Hoc Committee task to review the STVR program.

  • February 2020 Council appointed 15 members to serve on the committee for a period not to exceed 12 months.

  • The Committee included STVR owners, STVR operators, property managers, STVR business partners (cleaning services, pool cleaners, etc.) and members not associated with the STVR industry.  La Quinta residency was not a requirement.

  • City Councils directive to the Committee was to focus their activities toward establishing a reasonable accommodation for STVR properties within the community.  Per this directive the Committee did not address the option of eliminating STVRs within the city.

  • The Committee formed four sub-committees to address their directive;

    1. Enforcement and Violations - examine code compliance improvements, fines, and other recommendations relating to compliance

    2. Permitting – examine and recommend updates to the types of licenses/permits, minimum duration of stays, notification of neighbors, and home inspection requirements.

    3. Density (Occupancy and Property) – examine occupancy limits within a STVR property, density, and over concentration of STVR by neighborhood, zone or defined geographic area.

    4. Marketing – review marketing material, website, good neighbor brochure, community outreach, education and City branding of program.

  • Ad Hoc Committee provided a final report to the City Council December 15, 2020

  • Neighbors for Neighborhoods provide a Vision for La Quinta to the City Council January 12, 2021

  • A Comparison of Regulations made by the ad hoc committee, Neighbors for Neighborhoods and Palm Springs are presented in the following two tables.  ​

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  • In December Council approved changes to include increased fines, ranging from $1,000 to $5,000 depending on the violation and if it is a repeated offense

  • Operating without a permit is fined $3,000 and permanently banned from the program.  If they continue to operate, they are fined $5,000.

  • February 25th higher permit fees were approved for three new types of permits.  The purpose of the increased fees is to cover the City’s cost for operating the STVR program, including code enforcement, a 24-hour hotline and other program expenses. 

  • On March 2nd Council approved a Resolution to Amend the City’s STVR Program Permit Fees – “Under the proposed fee structure the City will continue to collect less than the city’s full cost of permitting and regulation however cost recovery will be significantly improved” (March 2, 2021 pg. 144).

  • February 25th clarification language was added to Section 3.25.050F regarding Adequate on-site parking.  On-site parking is based on the number of overnight guests.  Adequate on-site parking is calculated at a ratio of 1 parking place per four overnight occupants.  Two street parking places may count toward the “adequate onsite parking” standard.

    • Additional amendments addressed;

    • Estate homes – five or more bedrooms

    • Two Strike Policy – three strike policy is changed to a two-strike policy for violations.  A minor violation reprieve may be requested by STVR owner to city code enforcement officer from counting one or more violations withing a one year period.

  • Following items were tabled for future discussion and direction

    • Limits on number of bookings per year

    • Limit on number of STVR permits per owner

    • Primary Residence STVR permit

    • Contract between owner and renter acknowledging regulations

    • Owner required a security deposit from renter

  • July 2020 the City Council adopted a moratorium on issuing new STVR permits in residential zones, the moratorium was extended several times with final expiration date, April 6, 2021.

  • Prior to the moratorium all STVR permit requests were approved with no consideration given to total number of permits approved or number of permits issued within a community or neighborhood except for HOA communities which prohibited them.

  • May 2021 the City Council adopted an ordinance related to non-issuance of new STVR permits and grounds for denial of STVR permits in residential zones.

  • Council indicated they will periodically review the impacts or effects, if any, caused by the non-issuance of new STVR permits.  Staff will prepare reports and data assessing impacts for the Council to review at a regular or special meeting (April 20, 2010)

  • (TBD) Noise Devices will be mandated into an STVR before permit is renewed

  • City Council plan is to allow time for the new enforcement and compliance regulations, recent code updates and other performance standards to establish a track record, including changes to the total number of STVR permits in residential zones.

  • Density standards maybe considered at a later time (within six to twelve months).

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  • These numbers illustrate the oversaturation of STVRs in La Quinta residential communities

  • As a comparison to other valley cities that most recently addressed their STVR program

    • Rancho Mirage banned STVRs with a 1.7% ratio of STVRs to Housing Units

    • Cathedral City banned and an election upheld ban with a 2 to 1 majority supporting ban with a 1.4% ratio. 

  • 48 HOA communities, 6 allow STVRs; Legacy Villas, Monticello, Los Estados @ Santa Rosa Cove, Santa Rosa Cove, PGA West and Puerta Azul.

  • Density maps are available from the City and residence groups.

COUNCIL MEETING MINUTES   -  February 25, 2021

  • Council discussed their response to resident’s concerns such as incorporating N4N comments and enacting the moratorium

  • Goal is for residents to enjoy their homes without being conscripted as STVR police

  • The STVR matter is neither a constitutional nor a property rights issue.

  • Complexity of the issues requires Council to look to emerging practices rather than best practices

  • City is doing its homework which includes examining other cities’ provisions.

  • Council tries to represent all La Quinta residents but on this issue any action will result in unhappy people

  • It was determined that most STVR bookings per year are below the limit of 32 under consideration; 96% of owners have only none property, meaning proposals to limit bookings or permits per owner would not address the problems (Council Minutes February 25, page 8). 

  • Radi stated it is self-evident that non-hosted STVRs are at capacity, even over capacity, and he supports extending the moratorium on new non-hosted STVRs indefinitely which will by attrition reduce the density over time.

  • Fitzpatrick concerned with Radi on discontinuing new non-hosted STVR permits in residential zones.  She noted the city is desperate for affordable housing and non-hosted STVRs are contributing to the decline of housing availability and affordability.

  • Mayor Evans expressed concern over the City’s financial health if a permanent moratorium on non-hosted STVRs is enacted.  She is concerned the number of tourist commercial properties don’t increase to compensate.  She stated the current number of non-hosted STVRs is acceptable.

  • Pena agreed with Mayor Evans and explained his concern that there will be unknown demands on City revenues in the future.

  • Radi noted developers will not build tourist commercial properties while every house in the city can operate as a STVR because it would not be financially viable.

  • Sanchez opposed a permanent moratorium; the changes Council is about to make to ordinance and fees should be given time to work and STVRs have increased home values and will soon reach a point where STVR investors will be price out of the market – the market will correct itself.

  • Mayor Evans prefers not to use the term “indefinite” moratorium because it may not give the city flexibility should it have future need for STVR revenue.

March 2, 2021

  • Council discussed the reasoning for a continued moratorium on new permits being the current saturation exceeding the City’s capacity.

  • The massive research and input done to improve the program (not quantified in meeting minutes).

  • Numerous changes have been made over the years in response to residents

  • There is difficulty in finding a solution when there are equal number for and against.

  • Although not a primary factor, the Council’s responsibility to safeguard the City’s long-term financial health

  • The goal is consensus among stakeholders so it is prudent to take it slow and address issues bit by bit

  • Council’s commitment to affordable housing is important and understanding that STVRs play some role.