Measure A will permanently phase out all short-term vacation rentals in residential areas, but still allowing “home-stays” where homeowners are present on the site. [Opinion]
La Quinta is the latest city to go on the attack against short-term vacation rentals (STVRs) in the Valley. Cathedral City, Palm Desert and Rancho Mirage have preceded us, and Indio is having to tackle the abuses that are rampant in its community. The big difference is that in La Quinta, the residents are fighting not only a well-funded STVR owner/operator group (VRONLQ), but also our own City Council.
This issue will be resolved in Measure A, on the Nov. 8 ballot. Measure A will permanently phase out (by the end of December 2024) all STVRs in residential areas, but still allowing “home-stays” where homeowners are present on the site. Also, STVR permits will still be allowed in the 11 tourist commercial zones which are now in full operation, with more on the drawing boards.
What’s all the fuss? Well, the city maintains that the problems are few, and the STVRs are being phased out under the ordinance passed in April of 2021, and that the financial sky will fall due to loss of taxes (TOT) and fees paid by operators. Therefore, the city claims, (get ready) police and fire and all kinds of services will have to be cut, or taxes will be raised. (Taxes can only be raised on a vote of the electorate, they fail to point out.)
On the other hand, the supporters of Measure A are reminding us that an ordinance can be overturned by a vote of the Council. A measure is permanent (unless overturned by the voters). We are also stating that these mini-hotels in our midst can never be fully regulated, that they present disruption and danger, that once-affordable housing is disappearing off the housing inventory, and that school enrollment is declining due to loss of young families. Most importantly the quality of life in our neighborhoods is threatened. Plus, the projections by the city and its “unbiased” consultants are erroneous.
How can the city’s projections be off base? Easy. Underestimate the revenues, inflate the expenses and hide the surplus. For example, TOT revenue for the remaining, and future STVRs in the tourist zones is not accurately projected. Capital improvement budgets go from $2 million to $4 million to $8 million. Annual surpluses can be tucked away in various reserve accounts.
Case in point: The citizens of La Quinta wisely passed Measure G in 2016 to raise the local sales tax by one cent (with the support and urging of the City Council). The main pitch to voters was that these funds would cover the rising costs of police and fire protection and capital outlay. Revenues from this measure have exceeded expectations. Wildly exceeded expectations. Income has increased every year. But the anti-Measure A “unbiased” studies show no increase. Plus, the $7 million annual excess has been tucked away in reserves. According to the city CPA, the total reserves at the end of 2021 were $19 million, plenty to cover the $6 million loss of revenue projected by the city. Don’t be fooled. La Quinta is financially sound and will continue to be so. It is in the city’s (pro-business) interest to make us look poor and to cry gloom and doom.
What’s more, look at the valley cities who have already curtailed STVRs. Cathedral City, for example, is projecting a $7 million surplus for this fiscal year. No bankruptcy. Look around the state. Dozens of cities have banned STVRs with no disastrous financial consequences. The proof is in the pudding.
And a word about projected sales tax: Our city adversaries state that vacation renters generate millions and millions of dollars of tax revenue. Wait a minute. Most of us have vacationed for a weekend in another town. How did we spend our vacation dollars? We saw a show, went to an event, went hiking or biking, and ate in restaurants, maybe. Most of us take lots of food with us and cook in our fun new surroundings. And we hang out and party. But do we buy clothes? Home improvement supplies? Buy a car?? No, that’s what permanent residents do, or long-term renters.
Let’s turn to the housing inventory. Lack of affordable housing across the Valley (and the state and the nation) is well documented, resulting in not only stress on young families and the elderly, but homelessness. La Quinta has prided itself in wonderful affordable housing projects over the years, with at least one more on the drawing board (thanks to the City Council). We all need this affordable housing for middle-income workers such as teachers, nurses, fire and police personnel, middle management, clerks, bus drivers and maintenance personnel. These families make up the diverse fabric of our community. We need them and we want them. Investors have been snatching up modest homes, investing thousands of dollars in them to may them ‘”luxury” rentals, to charge big prices for a weekend. Where do our working families live? (Apartments? Hard to find and expensive. Long-term rental home? Hard to find and expensive.)
Middle-class young people often have children. Children who go to school. The school population is decreasing for a number of reasons, but lack of housing is one of them. For every 30 children gone from a community means probably one classroom gone. One teacher. One or more classroom aides. And across the school district that cuts jobs for bus drivers, cafeteria workers and maintenance personnel. The community suffers
La Quinta residents are fighting a David and Goliath battle. We hope that the residents will prevail, as the operators are waiting in the wings if it fails. If it fails, they will claim it’s a mandate to reinstate new permits for STVRs across the city. Will the City Council cave in? It’s a risk we can’t take. We need a permanent fix. We are urging La Quinta voters to “VOTE YES” on Measure A.
According to Jim Alderson, a retired accountant who lives in La Quinta, the CPA audited financials show a different picture of the city. The CPA audit shows a net worth of $770 million on June 30, 2021. Over three quarters of a billion dollars! And the city had a general fund surplus of $19 million for the year according to the CPA.
The city has chosen to present a worst-case scenario and has predicted a potential $6 million loss of revenue. As one can easily see, the $19 million surplus in 2021 could have easily absorbed this loss.
Good work.
Image Sources
- Vacation Rental: Shutterstock