Carnevale: Short-term vacation rentals debate has little to do with losing revenue

CATHEDRAL CITY — The debate engulfing the City Council’s decision to phase out short-term vacation rentals has little, if anything, to do with the city losing revenue and everything to do with the quality of life in the community, City Councilor Mark Carnevale told Uken Report.

His comments comes as a petition is being circulated to put the decision to a public vote.

Mark Carnevale

Councilor Mark Carnevale

“There were no backroom talks. There was full transparency,” Carnevale said. “We listened to both sides. Everybody had their opportunity to speak. And the final decision was we wanted to phase these out for the quality of life. It’s not about the money. It’s about the quality of life. That’s my biggest point. I respect their referendum. If they want to challenge it, I respect that, and that’s their right to do so. But at the end of the day, I’m not backing down. I’m staying firm with my decision on this.”

In September, the City Council voted unanimously on an ordinance to phase out short-term vacation rentals (STVR) in residential neighborhoods by the end of 2022.

This decision came after more than a year of public input, the creation of a short-term vacation rental task force, and much deliberation. The newly adopted ordinance is scheduled to go into effect on Oct. 9, 2020.

The ordinance calls for a phase out of short-term vacation rentals (STVR) in residential neighborhoods by the end of 2022 with two main exceptions:

  • Homes located in neighborhoods governed by Homeowners Associations (HOAs a.k.a. Common Interest Developments) that permit such use and;
  • Home-sharing vacation rentals.  Home sharing means that the home is the owner’s primary or principal residence and rents out a portion of the property.  Rules include that the owner may only have one primary or principal residence and the owner of the home is onsite during the rental period.  Typically, home sharing is where the owner rents out a room or casita on their property.

Neither Mayor John Aguilar nor Carnevale are surprised by the effort to seek a public vote.

Vacation Rentals Issue All About Quality of Life

Mayor John Aguilar

“I would always support a group’s or individual’s right to disagree with any action by the Council and to take whatever steps they feel necessary to fight for their cause,” Aguilar said. “The City Council, task force, and community labored on this issue for over a year and in the end made the decision they felt was in the best interest of our neighborhoods.  I only hope that everyone on both sides of this argument remain civil in their efforts to support or oppose the vote.”

Those who oppose the phase out argue that short-term vacation rentals bring money and visitors into the city.

“That could be true, but there’s no way of ever proving it, Carnevale said. “They can’t prove that the renters eat at our restaurants. They can’t prove that they eat or shop at our shopping centers, or gas stations, and all. They might go to Palm Springs and eat their dinner. Their argument that we’re losing revenue, I’m not necessarily buying into it.”

Doug Evans, a 30-year Cathedral City resident who has spent his entire career in city planning and community development, said he is well-familiar with the short-term vacation rental issue. He puts into context what STVRs may or may not bring in, in revenue.

  • Current number of permitted STVR: 385
  • Current TOT revenue-per city staff report: $500,000-plus
  • Assuming same TOT revenue per STVR, 1,540 total STVR’s would be needed to generate $2,000,000 in TOT

“The city’s STVR business model is broken,” Evans said.

The new city permit fee is $1,950 for STVRs and $525 for home-sharing to cover the full cost of administration and enforcement, according to Evans,

There are 385 total STVRs today. Assume up to 10% are currently home-sharing (city has not provided exact count but it’s between 5%-10%), he said.

  • 346 STVRs at $1,950 = $674,700
  • 39 home-share units at $525 = $20,475
  • Total permit fees estimated at: $695,175

“Here is why the business model is broken,” Evens said. “It takes $700,000 in permit fees to collect $500,000 in TOT. No other land use in Cathedral City takes this much babysitting to manage a business, ghost motels, run at 385 homes. If you take out the planned community STVRs, about one-third of total that will be permitted under the new ordinance, the imbalance grows substantially. There are very few complaints in HOA-managed resort properties.”

The City Manager on several occasions, City Hall at Your Corner and a City Council meeting, has said no other land use takes this much energy to administer and enforce, not even cannabis, according to Evans.

“Take this to 2,000 STVRs ,as opponents to the phase out of STVRs advocated, and it is beyond comprehension how severely neighborhoods will be impacted. More good residents and families will just move away,” Evans said. “Residents can’t make this stuff up. The STVR industry does not care about residents or neighborhoods. Residents and neighborhoods are important to the health of a community.”

Carnevale is also unnerved at the tactics he says the opposition is using to secure votes.

“They’re going to supermarkets without masks. They’re going knocking on doors without masks to receive votes, which scares me,” Carnevale alleged. “I mean, they’ll do anything to us, not to do this even when there’s a pandemic going on. They put this above the health of our residents. They’re knocking on our residents’ doors, asking them to sign a petition with a COVID-19 pandemic going on. I think they could have found a little bit better way to do so.”

The people seeking signatures are paid professional salespeople, Carnevale claims. The practice has gone on for years. Usually, they are paid $8 per hour, but Carnevale alleges these signature seekers are earning double. They mislead residents about exactly why they are seeking residents’ signatures.

“Let’s be honest here.,” Carnevale said. “We’ve been totally honest with them. Are they being totally honest with us, or are they into the trickery? That’s what upsets me the most. Let’s face this head on, fairly, without trickery.”

Two of the women behind the petition drive, don’t even live in Cathedral City, according to Carnevale. They claim short-term vacation rentals are being banned, which is false.

“I don’t even know their names, that’s how important they are to me. And you can quote me on that,” Carnevale said. “That’s the president and treasurer of the website, ‘I love Cathedral City.’ Well, I’ll tell you something. We love Cathedral City. That’s what it should be named, not ‘I.’ There’s no I in team.”

Should the referendum go through, and should Cathedral City voters reverse the City Council’s decision, Carnevale said he will accept it and not be bitter.

“We’ll work through it. We’ll make things better, but I’m not backing down from my decision,” Carnevale said. “But if things change, I will change and we’ll work through it. And hopefully they’ll work with us if they do get their way. The whole thing is about fairness. The whole thing is about giving the quality of life back to these neighborhoods.”

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Image Sources

  • Mark Carnevale: Mark Carnevale
  • John Aguilar: Cathedral City
  • Vacation Rentals: iStock