Palm Springs Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Palm Springs, California?

Palm Springs, a popular desert resort city in Southern California, has implemented various regulations on short-term vacation rentals booking platforms like Airbnb and VRBO in recent years. These rules, found in the city's ordinances and zoning codes, aim to balance the economic benefits of STVRs with preserving the quality of life for full-time residents. Here's an overview of the key regulations and requirements for operating a short-term rental in Palm Springs.

Starting a Short-Term Rental Business in Palm Springs

Property owners must obtain a Vacation Rental Certificate from the city's Department of Special Program Compliance to legally operate a short-term rental in Palm Springs. This requirement applies to all STVRs, defined as rentals of 28 days or less.

The Vacation Rental Certificate application process involves several steps, including:

• Submitting a completed application form along with a $900 annual fee
• Passing a safety inspection to ensure compliance with building and fire codes
• Providing proof of ownership and $500,000 in liability insurance
• Designating a local contact person available 24/7 to respond to any issues

Vacation Rental Certificates must be renewed annually. Failure to obtain or renew a certificate can result in fines of $5,000 and permanent ineligibility from the STVR program.

In November 2022, the Palm Springs City Council adopted Ordinance 2075, which established a cap on the number of Vacation Rental Certificates issued in each neighborhood. The cap is set at 20% of the total dwelling units in the neighborhood as defined by the city's recognized neighborhood organizations.

New STVR permit applications are processed on a first-come, first-served basis. Additional applications are placed on a waiting list once a neighborhood reaches the 20% cap. Existing permit holders are grandfathered in.

The city also introduced a new "junior" STVR permit in 2022. These permits have a reduced annual fee of $642 and allow owners to rent their property up to six times per year. Junior permits do not count toward the neighborhood caps.

It's crucial for prospective STVR operators in Palm Springs to thoroughly review the city's vacation rental ordinance and ensure they can meet all the requirements before investing in a property. With the new caps in place, securing a permit in high-demand neighborhoods may prove challenging. Consulting with local officials and experienced STVR managers can help navigate the complex regulatory landscape.

Short-Term Rental Licensing Requirements in Palm Springs

To legally launch and operate a short-term rental in Palm Springs, property owners must obtain a Vacation Rental Registration Certificate from the city's Department of Special Program Compliance. This requirement applies to all STRs, defined as rentals of 28 days or less.

The Vacation Rental Certificate application process involves several steps and fees:

Submit a completed application form along with a non-refundable application fee. As of July 2023, the fees are:

-Vacation Rental - New/Annual Registration Fee: $1,258
-Junior Vacation Rental - New/Annual Registration Fee: $642
-Homeshare - New/Annual Registration Fee: $268
-Land Use Permit (LUP) Fee for Estate Homes: $426

1. Pass a safety inspection to ensure compliance with building and fire codes. This may require additional expenses to bring the property up to code.
2. Provide proof of ownership and a minimum of $500,000 in liability insurance.
3. Designate a local contact person who is available 24/7 to respond to any issues within 30 minutes.
4. Obtain a Transient Occupancy Tax (TOT) Permit for a one-time $25 fee. STR operators must collect and remit a 12.5% TOT on all rental income.

Vacation Rental Certificates must be renewed annually by the expiration date. Failure to renew on time results in a $581 penalty fee. Operating an STR without a valid permit can lead to fines of $5,000 and permanent ineligibility from the program.

In addition to the standard Vacation Rental Certificate, Palm Springs introduced a new "Junior" permit in 2022. These permits have a reduced annual fee of $642 and allow owners to rent their property up to six times per year. Junior permits do not count toward the citywide cap on STRs.

It's important to note that STR permits are non-transferable. The new owner must apply for a new Vacation Rental Certificate if a property is sold. Permits also cannot be obtained for properties in escrow.

Before investing in a Palm Springs STR, it's crucial to research the property's specific zoning requirements and HOA rules. Some neighborhoods have additional restrictions on STRs. With the new 20% per neighborhood cap on permits, securing a certificate in high-demand areas may be difficult.

The city has stringent enforcement of its STR ordinances. Unlicensed operators face significant fines and legal consequences. Even minor violations of the rules, such as noise complaints or occupancy limit breaches, can result in thousands of dollars in fines and potential permit revocation.

Navigating Palm Springs' complex STR regulations requires careful planning and due diligence. Prospective rental hosts should review all requirements, consult with local officials, and ensure they can fully comply before proceeding with an STR business venture in the city.

Required Documents for Palm Springs Short-Term Rentals

Property owners must obtain a Vacation Rental Certificate from the city's Department of Special Program Compliance to legally operate a short-term rental in Palm Springs. As part of the application process, several key documents are required.

Vacation Rental Certificate Application

The first step is to complete the Vacation Rental Certificate Application, which can be found on the city's website. This application requires detailed information about the property, including the address, owner contact information, and the type of rental being registered (homeshare, vacation rental, or junior permit).

Proof of Ownership

Applicants must provide proof of ownership for the property being registered. Acceptable documents include a copy of the grant deed, property tax bill, or other official record demonstrating ownership.

Liability Insurance

Short-term rental operators in Palm Springs are required to maintain a minimum of $500,000 in liability insurance coverage. A copy of the insurance declaration page or certificate of insurance must be submitted with the application.

Local Contact Person Designation

As part of the application, owners must designate a local contact person who is available 24/7 to respond to any issues or complaints within 30 minutes. The contact person's name, phone number, and email address must be provided.

Safety Inspection Report

Before issuing a Vacation Rental Certificate, the property must pass a safety inspection to ensure building and fire codes compliance. The inspection report, completed by a city-approved inspector, must be submitted with the application.

TOT Permit Application

In addition to the Vacation Rental Certificate, short-term rental operators must obtain a Transient Occupancy Tax (TOT) Permit in addition to the Vacation Rental Certificate. The TOT Permit Application and a one-time $25 fee must be submitted to the city.

Pool/Spa Certification Form

A Pool/Spa Certification Form must be completed and submitted if the rental property has a pool or spa. This form verifies that the pool or spa meets all safety requirements, including proper fencing, covers, and drain covers.

Good Neighbor Brochure Acknowledgement

Owners must sign and submit an acknowledgment form confirming they have received and read the city's Good Neighbor Brochure, which outlines rules and expectations for short-term rentals.

Application Fee

A non-refundable application fee must be submitted with the Vacation Rental Certificate Application. As of July 2023, the fees are $1,258 for a standard permit, $642 for a junior permit, and $268 for a homeshare permit.

Navigating the various document requirements can be complex, so it's important for prospective short-term rental operators to carefully review the city's application checklist and consult with local officials if needed. Failure to provide all required documents can delay the approval process and prevent the issuance of a Vacation Rental Certificate.

By properly preparing and submitting the necessary paperwork, short-term rental hosts in Palm Springs can ensure they fully comply with local regulations and avoid potential fines or legal consequences.

Palm Springs Short-Term Rental Taxes

Short-term rental operators in Palm Springs are subject to several taxes at the city and state levels. It's crucial for hosts to understand and comply with these tax obligations to avoid penalties and maintain their legal standing.

Transient Occupancy Tax (TOT)

The primary tax on short-term rentals in Palm Springs is the Transient Occupancy Tax, commonly known as the TOT or bed tax. As of 2023, the TOT rate in Palm Springs is 11.5% for all vacation rentals, homeshares, hotels, and rental agencies. For group meeting hotels, the rate is slightly higher at 13.5%.

Hosts must collect the TOT from their guests and remit it to the City of Palm Springs on a monthly basis. Even if a property did not have any bookings in a given month, hosts are still required to file a TOT return with the city. Late filings or failure to pay the TOT can result in penalties and interest charges.

Tourism Business Improvement District (TBID) Assessment

In addition to the TOT, Palm Springs implemented a Tourism Business Improvement District (TBID) assessment in July 2021. The TBID applies a 1% assessment on all short-term rental stays of less than 28 days. This fee is collected by the host and remitted to the city along with the monthly TOT payment.

The TBID aims to fund the Greater Palm Springs area's tourism marketing and promotional efforts. By contributing to the TBID, short-term rental operators help support the local tourism economy and drive more visitors to the region.

California State Taxes

On top of the city-level taxes, short-term rental hosts in Palm Springs must also collect and remit applicable California state taxes. This includes the statewide sales tax, which is currently 7.25%, as well as any district-specific sales taxes.

Hosts are responsible for registering with the California Department of Tax and Fee Administration (CDTFA) and obtaining a seller's permit. They must then file regular sales tax returns and remit the collected taxes to the state.

Occupancy Tax Exemptions

In certain limited cases, guests may be exempt from paying the TOT in Palm Springs. This typically applies to federal or state employees on official government business. Hosts should familiarize themselves with the specific exemption criteria and maintain proper documentation for any exempt stays.

Compliance and Recordkeeping

Short-term rental hosts in Palm Springs must maintain accurate records of their rental income, occupancy, and taxes collected to ensure compliance with all tax requirements. The city may request access to these records for auditing purposes.

Failure to comply with the TOT, TBID, or state tax obligations can result in significant fines, penalties, and even the revocation of a host's Vacation Rental Certificate. It's essential for hosts to stay informed about any changes to the tax rates or regulations and to promptly address any issues that arise.

Given the complexity of the tax landscape, many short-term rental operators in Palm Springs choose to work with professional vacation rental managers or tax advisors. These experts can help ensure full compliance and minimize the risk of costly mistakes.

By understanding and fulfilling their tax responsibilities, short-term rental hosts in Palm Springs can confidently operate their businesses and contribute to the city's thriving tourism economy. Proper tax compliance is a key part of being a responsible and successful vacation rental operator in this popular desert destination.

California Wide Short-Term Rental Rules

While individual cities and counties in California have the authority to impose their own regulations on short-term rentals, some statewide rules and definitions apply uniformly across the Golden State.

According to the California Senate Bill No. 60, Chapter 307, a "short-term rental" in the state refers to any residential property or portion of a residential property that is rented to an individual or group for 30 consecutive days or less. This broad definition is the foundation for local jurisdictions to build upon with their specific requirements.

California does not have a blanket ban on short-term rentals at the state level. However, the state does allow cities and counties to enact their own ordinances regulating STRs, which has led to a patchwork of local rules across California. These local regulations can cover a wide range of issues, such as zoning restrictions, permitting requirements, occupancy limits, parking rules, and noise restrictions.

One common theme among many local STR ordinances in California is the requirement for hosts to obtain a business license or permit from the city or county. These permits often come with associated fees and may need to be renewed annually. Some jurisdictions also require hosts to register with local tax authorities and collect and remit transient occupancy taxes (TOT) on their rental income.

In terms of taxation, California does not have a statewide lodging tax that applies specifically to short-term rentals. However, the state does allow cities and counties to levy their own transient occupancy taxes on STRs. These local TOT rates can vary widely, typically ranging from 6% to 14% of the rental price. In many cases, STR platforms like Airbnb and Vrbo collect and remit these taxes on behalf of hosts, but it's ultimately the host's responsibility to ensure compliance with all applicable tax laws.

Another area where California has set some statewide guidelines is in the realm of safety requirements for short-term rentals. In 2018, the California Building Standards Commission adopted new regulations requiring STRs to have working smoke alarms, carbon monoxide detectors, and fire extinguishers, among other safety measures. These rules apply statewide, though local jurisdictions may impose additional safety requirements.

It's important to note that while California has established some broad parameters for short-term rentals, the specific rules and regulations can vary significantly from one city or county to the next. Hosts must carefully research and comply with all applicable local ordinances in addition to any statewide requirements.

As the short-term rental industry continues to evolve, it's likely that California's regulatory landscape will also continue to shift and adapt. Hosts should stay informed about any changes to state or local laws that could impact their ability to operate legally and successfully in the Golden State.

Does Palm Springs Strictly Enforce STR Rules?

Based on discussions in online forums like Reddit and BiggerPockets, it's clear that Palm Springs takes a strict approach to enforcing short-term rental regulations compared to many other cities in California. The city has a dedicated vacation rental compliance department that actively monitors and investigates potential violations of the STR ordinance.

Several Reddit users have reported receiving fines and citations for operating unlicensed vacation rentals in Palm Springs. One host shared their experience of being caught and fined $5,000 for running an illegal STR, noting that the city's enforcement is "no joke." Another Redditor mentioned that their neighbor was fined $10,000 for repeatedly violating the city's STR rules, highlighting the steep penalties for non-compliance.

On BiggerPockets, a real estate investor warned others about the risks of operating an unlicensed STR in Palm Springs, stating that the city is "very aggressive" in its enforcement efforts. They advised fellow investors to carefully weigh the potential consequences before attempting to skirt the rules.

Compared to nearby desert cities like La Quinta and Rancho Mirage, which have only recently started cracking down on STRs, Palm Springs has a longer history of strict enforcement. The city's tough stance has earned it a reputation for being less friendly to Airbnb and other short-term rental platforms than some of its neighbors.

However, this doesn't mean that it's impossible to operate a successful STR in Palm Springs. Hosts who follow the rules, obtain the necessary permits, and comply with all regulations can still thrive in the city's lucrative vacation rental market. But those who try to fly under the radar or ignore the ordinance do so at their own peril.

In fact, some BiggerPockets users argue that Palm Springs' strict enforcement actually benefits rule-abiding STR operators. By weeding out illegal and non-compliant rentals, the city helps to level the playing field and reduce competition for legitimate hosts. One investor noted that while the permit process can be time-consuming and costly, operating legally and avoiding hefty fines is worth it.

Overall, based on the experiences shared by hosts on Reddit and BiggerPockets, it's clear that Palm Springs is not a city where you can easily get away with running an unlicensed short-term rental. The city's proactive enforcement efforts and steep penalties for violations make it a challenging environment for hosts who don't play by the rules. While some may still attempt to operate under the radar, the consensus is that the risks far outweigh any potential rewards. For investors serious about running a successful STR business in Palm Springs, obtaining the proper permits and following all regulations is absolutely essential.

How to Start a Short-Term Rental Business in Palm Springs

Starting a short-term rental business in Palm Springs requires careful planning and adherence to local regulations. Follow these steps to get your venture off the ground:

1. Research local zoning laws and regulations: Familiarize yourself with Palm Springs' short-term rental ordinance, which sets operational standards and license requirements for all STRs in the city. Ensure your property is eligible for short-term rentals and understand the specific rules for homeshares vs. vacation rentals.
2. Obtain necessary permits and licenses: Apply for a Vacation Rental/Homeshare Registration Certificate from the City of Palm Springs. This process involves submitting an application, paying the annual fee ($900 as of 2023), and passing a safety inspection. You'll also need to obtain a Transient Occupancy Tax (TOT) permit for a one-time $25 fee.
3. Register with tax authorities: Register with the City of Palm Springs to collect and remit the 11.5% TOT on all short-term rental income. As of July 1, 2021, you must also pay the 1% Tourism Business Improvement District (TBID) assessment on stays of less than 28 days.
4. Prepare your property: Ensure your rental property is clean, well-maintained, and equipped with all necessary amenities to provide a great guest experience. Consider hiring a professional cleaning service and investing in high-quality furnishings.
5. Create a compelling listing: Take high-quality photos of your property and craft an engaging description that highlights its unique features and location. Be transparent about any rules or restrictions, and set competitive rates based on the local market.
6. Choose a booking platform: List your property on popular short-term rental platforms like Airbnb and Vrbo. Familiarize yourself with each platform's policies and fees, and maintain an active presence to respond to inquiries and manage bookings.
7. Implement a guest screening process: Protect your investment by thoroughly screening potential guests. Establish clear house rules and communicate expectations upfront to minimize the risk of damage or disruptive behavior.
8. Arrange for property management: Decide whether you'll manage the property yourself or hire a professional property management company. If self-managing, be prepared to handle bookings, guest communication, cleaning, and maintenance tasks. Designate a local contact person who can respond to issues within 30 minutes.
9. Obtain appropriate insurance: Contact your insurance provider to discuss coverage options for your short-term rental. Many standard homeowners policies do not cover commercial use, so you may need to purchase additional liability coverage or a specialized vacation rental policy.
10. Stay informed and compliant: Keep abreast of any changes to Palm Springs' short-term rental regulations and tax obligations. Regularly review and update your listing, house rules, and pricing strategy to ensure your business remains competitive and profitable.

By following these steps and maintaining a commitment to providing exceptional guest experiences, you can successfully launch and grow a short-term rental business in Palm Springs. Remember to prioritize compliance with local laws and regulations to avoid potential fines and legal issues.

Who to Contact in Palm Springs about Short-Term Rental Regulations and Zoning?

If you have questions or need more information about short-term rental regulations and zoning in Palm Springs, there are several city departments and resources available to assist you.

The primary point of contact for short-term rental inquiries is the City of Palm Springs Department of Special Program Compliance. This department oversees the Vacation Rental Certificate program and ensures that all short-term rentals are operating in accordance with city ordinances. You can reach the Department of Special Program Compliance by phone at (760) 322-8383 or by email at [email protected].

For specific questions related to zoning and land use regulations for short-term rentals, contact the Palm Springs Planning Services Department. They can provide guidance on allowable locations for vacation rentals and any applicable development standards. The Planning Services Department can be reached by phone at (760) 323-8245 or by email at [email protected].

If you need assistance with the Vacation Rental Certificate application process or have questions about required documents and fees, the Department of Special Program Compliance's Vacation Rental Division is the best resource. They can walk you through the application checklist and help ensure you have all the necessary paperwork. Contact the Vacation Rental Division directly by phone at (760) 322-8372 or by email at [email protected].

For concerns about noise, parking, or other nuisance issues related to short-term rentals in your neighborhood, the City of Palm Springs operates a 24/7 Vacation Rental Hotline. Residents can report non-emergency complaints by calling (760) 322-8383. The hotline is staffed by code compliance officers who will investigate and address any violations of the city's vacation rental ordinance.

Finally, for general inquiries or to obtain copies of the city's short-term rental ordinance and related application forms, visit the City of Palm Springs website at www.palmspringsca.gov. The website has a dedicated section for vacation rentals under the Department of Special Program Compliance page, with links to key resources and contact information.

By contacting the appropriate city departments and utilizing the available resources, short-term rental operators and residents can get the information and support they need to understand and comply with Palm Springs' vacation rental regulations. City staff are generally very responsive and helpful in guiding stakeholders through the process.

What Do Airbnb Hosts in Palm Springs on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions in online forums like Reddit and BiggerPockets, it appears that short-term rental hosts in Palm Springs have mixed feelings about the city's regulations.

Some hosts appreciate the city's efforts to balance the economic benefits of vacation rentals with concerns about quality of life for full-time residents. They see the permitting process and operational requirements as reasonable steps to ensure responsible hosting and maintain neighborhood character.

For example, one Reddit user shared their positive experience operating a permitted short-term rental in Palm Springs. They noted that as long as they followed the rules, maintained the property well, and were respectful of neighbors, they had no issues with the city. The host felt the regulations helped weed out "party houses" and irresponsible operators.

However, other hosts express frustration with what they perceive as overly burdensome regulations and high fees. On BiggerPockets, several investors have complained about the $900 annual Vacation Rental Certificate fee, which they feel cuts into their profit margins. Some also have issues with the city's occupancy limits and parking restrictions.

There is also concern among hosts about the new 20% per neighborhood cap on short-term rental permits that went into effect in 2022. Those who were unable to secure a permit before their neighborhood reached the cap worry about the future viability of their rental businesses.

On Reddit, one host lamented that they had invested significant money in renovating a property for short-term rental use, only to be waitlisted for a permit due to the cap. They felt the city had changed the rules midstream, leaving them in a difficult financial position.

Despite these challenges, many hosts on both platforms seem committed to making their short-term rentals work within the regulatory framework. They stress the importance of thoroughly researching the local requirements, running the numbers carefully, and being prepared to adapt as policies evolve.

Some hosts have found creative ways to navigate the permit cap, such as focusing on long-term rentals during the off-season or exploring alternative rental arrangements like home-sharing. Others emphasize providing exceptional guest experiences and maintaining positive relationships with neighbors to avoid complaints and enforcement issues.

Overall, while opinions vary, there seems to be a recognition among Palm Springs hosts on Reddit and BiggerPockets that the city's short-term rental regulations, while imperfect, are likely here to stay. Successful operators will need to find ways to thrive within the rules while advocating for policies that balance the needs of all stakeholders.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.