Court rejects appeal by Palm Springs group opposed to short-term rentals
A Palm Springs neighborhood group opposed to short-term vacation rentals has lost its appeal in a 2017 lawsuit challenging the city's vacation rental ordinance.
The lawsuit from Protect Our Neighborhoods, which argued that Palm Springs' ordinance violated city zoning laws on multiple levels, was originally shot down in October 2019 by a trial court.
The neighborhood group's appeal of that ruling faced a similar fate Friday when the California Fourth District Court of Appeals upheld the trial court's original verdict.
Protect Our Neighborhoods argued in the lawsuit that short-term rentals violate Palm Springs' zoning code because they are commercial enterprises — not residential units — that change the character of single-family residential zones. The group also contended that "if the Zoning Code permits short-term rentals at all," it does not permit property owners to rent out properties that they do not live in and requires that they have a land use permit or a conditional use permit.
The lawsuit also contained a broader allegation that the city's short-term rental ordinance "is inconsistent, contradictory, and based on erroneous findings."
The appeals court rejected each of these arguments, ruling that the Palm Springs ordinance was consistent with the city's zoning regulations. In the opinion, Presiding Justice Manuel Ramirez reasoned that since the zoning ordinance allowed for uses "customarily incident to" use as a dwelling, short-term rentals were not prohibited by the code, regardless of whether or not they were commercial enterprises.
"Admittedly, a short-term rental is not use as a “single-family dwelling”; neither the owner nor the renter is living there. Nevertheless, it is a use customarily incident to use as a single-family dwelling. An owner customarily can rent out a house short-term as well as long-term. Airbnb did not invent this practice; it just made it easier and more common. As early as 1991, the city was already collecting transient occupancy taxes on short-term rentals. And presumably, short-term rentals were going on even before they were taxed.
In a statement on the ruling, Bruce Hoban, co-founder of short-term rental advocacy group Vacation Rental Owners and Neighbors of Palm Springs, said it was "sad to see hundreds of thousands of dollars spent by the city to defend this lawsuit with no recourse for the city to recoup those funds due to Calif. state law."
Palm Springs spent roughly $200,000 over the last five years dealing with the lawsuit, according to City Attorney Jeff Ballinger, only a small fraction of which will be recoverable.
"Those funds could have been used for other more serious issues the city is facing like homelessness, providing housing for lower income residents, the animal shelter or long-term debt," Hoban added.
James B. Cutchin covers business in the Coachella Valley. Reach him at james.cutchin@desertsun.com.
This article originally appeared on Palm Springs Desert Sun: Palm Springs group loses appeal over 2017 short-term rental lawsuit
