Palm Desert, Rancho Mirage, and La Quinta pass new short-term rental laws

The Palm Desert City Council has voted to extend its ban on vacation rentals in residential neighborhoods to more areas of the city. The ban goes into effect December 31, 2021.

The city banned short-term rentals — unless hosts stay on-site during guests’ stays — in neighborhoods zoned R-1 and R-2 in 2017. The latest action by the council also bans them in planned residential (PR) areas, which affects 69 properties. Those neighborhoods include Shepherd Lane, Hovley Lane West, The Grove, and North Deep Canyon.

Under a regional stay home order from California Governor Gavin Newsom, all lodging businesses in Riverside County are currently only allowed to offer stays for COVID-19 mitigation and containment measures or to provide accommodation for essential workers or housing solutions. The order went into effect December 7 and is expected to last at least three weeks.

Meanwhile, the nearby city of Rancho Mirage is banning short-term rentals altogether — except where permitted by local homeowners associations — beginning January 1.

The ban, which affects 121 properties, comes in response to rising resident complaints about noise and other concerns regarding short-term rentals. The 149 properties located in private neighborhoods will be able to continue operating. The city is also strengthening enforcement of its vacation rental regulations.

Short-term rental hosts in Rancho Mirage are required to register with the city, designate an emergency contact that can respond to complaints within 45 minutes, and abide by limits on noise and other rules.

In the city of La Quinta, also in Riverside County, short-term rental platforms such as Airbnb and Vrbo will be required to make sure their listings have vacation rental permits, according to a new law passed by the City Council on December 1.

The new ordinance places more responsibility on platforms for host compliance with local regulations, prohibiting the platforms from booking stays for properties that don’t have valid city vacation-rental permits.

The measure, which goes into effect 30 days after adoption, also requires hosts to cease rental operations and notify the city when ownership of a vacation rental changes hands. Hosts must also notify the city when they construct or convert new bedrooms.

Earlier this year, Cathedral City also approved a new law that will phase short-term rentals out of the city, with a few exceptions, by 2023. 

Short-term rental operators in Palm Desert, Rancho Mirage, La Quinta, and Cathedral City are required to collect occupancy tax from guests and file monthly occupancy tax returns with their respective cities.

While Airbnb collects transient occupancy tax (TOT) in Rancho Mirage and Palm Desert, it doesn’t do so in La Quinta or Cathedral City. Vrbo doesn’t collect TOT for hosts in any of the four cities. Hosts whose platforms don’t collect on their behalf are solely responsible for TOT compliance.

MyLodgeTax can help automate and simplify tax compliance for California short-term rental hosts. For more on lodging taxes in California, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.