City proposes new rules and increased fines for short-term rentals

Indio City Councilmembers considered new updates for the city’s short-term vacation rentals Wednesday, which included an increased fee structure for violations, enhanced enforcement for noise complaints, and reworking the permitting process for rental owners. 

Introducing the proposed changes, Mayor Elaine Holmes framed them as sensitive to both residents and short-term rental owners, all while empowering the city’s code enforcement to adequately address offenders.

“We need something that has teeth,” she said, “and in order to direct them to do their job, we need to give them the tools.”

Infringement of the noise ordinance by some short-term rentals that also host large events could increase to as much as $1,000 for a first offense and up to $5,000. Enforcement could also include a minute-by-minute fine stipulation, mirroring the one imposed on Goldenvoice when performances at the music festivals go over the city’s curfew.

City Attorney Steven Pacifico said the increased fees were necessary to deal with larger commercial operations.

“The fines do need to be higher in order to create the disincentive to continue the nuisance behavior,” he said. Noise violations would also count as a strike on the rental’s permit, and with enough strikes the permit would be revoked.

Standard fines starting at $100 and going up to $500 would still be in place, but would increase during nighttime hours with fees then starting at $200 and going up to $1,000 for a third violation.

Another major update to city rules would fix the existing vague language that some rental owners use to take skirt rules for large events. Staff recommends a new definition that would apply to so-called party houses as, “a building facility where the primary use is events as opposed to a lodging,” Pacifico explained.

Additionally, new state law SB 346 allows cities more oversight to make sure platforms like VRBO and Airbnb are properly verifying a rental has a permit before any bookings can be made.

Councilmember Glenn Miller pushed back on some of the increased fees, calling them “overly excessive” and said Indio’s short term rental market contributes to the desirability of the city as an event host for smaller events, such as kid’s soccer and lacrosse events.

“You’re going to kill the goose that laid the golden egg, because that’s where we get a lot of our money,” he said. 

Richard Zizian, resident of Trilogy at The Polo Club, said the council should look into Palm Springs which caps vacation rentals based on neighborhood density or Rancho Mirage which restricts them to specific zones.

“These cities recognize that without these safeguards, certain neighborhoods can become saturated, and residents who have to protect themselves don’t have any means of doing that without help from the city,” he said.

Miller said that other cities’ restrictions on vacation rentals are part of the reason why business is booming in Indio; with rentals restricted in other cities demand goes up and Indio fills the void.

He also noted that cities with tighter restrictions on vacation rentals have far more hotel rooms to lodge visitors who might otherwise have chosen a vacation rental. 

At last month’s mid-fiscal year budget review, staff informed councilmembers that about 75% of the city’s Transient Occupancy Tax (TOT) revenue comes from short-term vacation rentals compared to 25% from hotels. The latest projections show the city expects to see $16.5 million in TOT revenue by the end of the fiscal year.

Councilmember Benjamin Guitron was in favor of the higher fees, he doubted they would push away short-term vacation rentals, the majority of which are run well and without complaint.

With an estimated 1,200 permitted rentals bringing in tens of millions of dollars in tax revenue, “I don’t think we’re going to affect it,” he said.

David Ison, who owns an event and property management company called the proposed rules “extremely reasonable.” 

“All that we ask is that whatever is asked of us is really clear, so that we can make sure we’re following the rules and we understand what the rules are,” Miles Warner, owner the Zenda event venue, which has been the subject of multiple complaints by the nearby Trilogy Polo Club.

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