Short-term rentals, sometimes called vacation rentals, are a hot item in the law and in reality. In some ways, short-term rentals allow a hotel-type use in a residential zone which causes conflicts with neighbors.

For those reasons Protect Our Neighborhoods (PON) sued the City of Palm Springs claiming its short-term rental ordinance was unlawful.

The plaintiffs made a frontal assault on short-term rentals in single-family neighborhoods. It is important to keep in mind that the case and decision is based on Palm Springs’ zoning ordinance, other municipalities will have their own ordinances of course.

---

---

PROTECT OUR NEIGHBORHOODS V. PALM SPRINGS

A group of unrelated residents in the City of Palm Springs sued the City claiming short-term rentals were unlawful under the City’s ordinances.

Specifically, the plaintiffs argued short-term rentals are commercial, not residential: short-term rentals change the character and adversely affect single-family neighbors and the City’s ordinance does not allow owners to rent out properties that they do not live in.

---

---

The trial court ruled in favor of the City and against PON.

PALM SPRINGS’ ZONING CODE

Over the years, the City adopted and amended its ordinances increasingly clarifying that short-term rentals were allowed in single-family residential zoning districts even though as the court noted, because of their short-term nature they are somewhat akin to a hotel use which is commercial.

The Palm Springs’ code barred the ownership of more than one vacation rental and limited vacation rentals to 36 per year and required “reasonably prudent business practices” to ensure that renters and their guests did not create unreasonable noise, disturbances, engage in disorderly conduct, or violate the law. A local contact person is mandated and the owner pays transient occupancy taxes. Sound familiar?

The court noted that Palm Springs is a vacation destination which for many years had a market for short-term home rentals.

COURT OF APPEAL RULING

The Fourth Appellate District Court of Appeal seemingly had no problem ruling against PON and in favor of the City of Palm Springs. And based upon Palm Springs’ Zoning Code, I agree. The City Council, almost every year in recent years, amended its zoning code to clarify its intent was to allow short-term rentals in residential neighborhoods.

The zoning code did not prohibit short-term rentals, and the City’s long-standing interpretation of its Zoning Code was that short-term rentals are not a prohibited commercial use of residential property. The Ordinance stated: “This Ordinance confirms Vacation Rentals…as an ancillary and secondary use of residential property in the City. A vacation rental under the City’s Zoning Code is rental of a single-family dwelling.” Palm Springs prevails as to short-term rentals in Palm Springs.

Remember this Opinion is based upon Palm Springs’ Zoning Code. Cities and counties have great leeway in drafting their own short-term rental codes.

Jim Porter is an attorney with Porter Simon licensed in California and Nevada, with offices in Truckee and Tahoe City, California, and Reno, Nevada. Jim’s practice areas include: real estate, development, construction, business, HOAs, contracts, personal injury, accidents, mediation and other transactional matters. He may be reached at porter@portersimon.com or http://www.portersimon.com