73 Cal.App.5th 667
Cal. Ct. App.2022Background
- Palm Springs long allowed short-term (<=28 days) rentals; City has collected transient occupancy taxes since at least 1991 and regulated such rentals through a Vacation Rentals chapter (Mun. Code ch. 5.25).
- The Zoning Code (Mun. Code chs. 91–94) permits use as a "permanent single-family dwelling" and "uses customarily incident to" that use in R‑1 zones; other uses are prohibited unless authorized.
- The 2008 Vacation Rentals ordinance required annual registration, liability insurance, occupancy limits, local contact availability, and payment of hotel taxes; 2016–2017 amendments narrowed allowed property types and added limits and enforcement mechanisms.
- The March 2017 Ordinance (No. 1918) reaffirmed and amended Chapter 5.25, included findings stating vacation rentals are "ancillary and secondary" (i.e., customarily incident) to residential use, and limited ownership and number of rentals.
- Protect Our Neighborhoods sued, alleging the 2017 Ordinance conflicted with the Zoning Code (short‑term rentals are commercial, change the character of R‑1 zones, require discretionary permits, and should be limited to owner‑occupied properties); the trial court upheld the Ordinance and the Court of Appeal affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether short‑term rentals are a prohibited commercial use in R‑1 zones | Short‑term rentals are commercial and therefore barred in R‑1 zones | Short‑term rentals are "ancillary and secondary" (customarily incident) to residential dwellings and thus permitted | Held: Rentals are reasonably characterized as ancillary/customarily incident; not categorically commercial and not prohibited |
| Whether short‑term rentals change the character/adversely affect R‑1 uses so as to conflict with Zoning Code | Rentals alter neighborhood character and conflict with zone uses | Zoning Code allows uses customarily incident to dwellings; City may regulate impacts without banning the use | Held: No impermissible conflict; City legislation and findings are within its discretion |
| Whether the Ordinance’s findings are internally inconsistent or unsupported | Findings are contradictory (regulatory vs. categorical statements) and lack factual basis | Findings are legislative, permissible, and reasonably support the Ordinance; courts do not reweigh legislative facts | Held: Findings are coherent and have a rational basis; not arbitrary or capricious |
| Whether Zoning Code requires a discretionary land‑use/conditional permit or owner‑occupancy for short‑term rentals | Zoning Code requires planning commission permits and/or owner occupancy for this new use | Zoning Code expressly permits uses "customarily incident" to dwellings without a permit; Ordinance need not require owner occupancy | Held: No discretionary permit or owner‑occupancy requirement imposed by Zoning Code; ordinance valid as enacted |
Key Cases Cited
- In re Thierry S., 19 Cal.3d 727 (Cal. 1977) (doctrine of implied repeal when statutes irreconcilably conflict)
- Lopez v. Sony Electronics, Inc., 5 Cal.5th 627 (Cal. 2018) (disfavored implied repeal; harmonize statutes unless irreconcilable)
- Berkeley Hills Watershed Coalition v. City of Berkeley, 31 Cal.App.5th 880 (Cal. Ct. App. 2019) (city interpretation of its own ordinance entitled to great weight)
- City of Corona v. Naulls, 166 Cal.App.4th 418 (Cal. Ct. App. 2008) (interpretation of zoning code language regarding permitted uses)
- Ewing v. City of Carmel by the Sea, 234 Cal.App.3d 1579 (Cal. Ct. App. 1991) (upholding municipal prohibition of short‑term rentals where city treated them as commercial)
- Gerawan Farming, Inc. v. Agricultural Labor Relations Bd., 3 Cal.5th 1118 (Cal. 2017) (deference to legislative distinctions under rational basis review)
- Hernandez v. City of Hanford, 41 Cal.4th 279 (Cal. 2007) (standard for deference to legislative or administrative zoning determinations)
- Biagini v. Hyde, 3 Cal.App.3d 877 (Cal. Ct. App. 1970) (incidental‑use factors in CC&R cases not controlling for municipal zoning)
- American Bank & Trust Co. v. Community Hospital, 36 Cal.3d 359 (Cal. 1984) (courts should not reweigh legislative facts supporting ordinances)
- Sabi v. Sterling, 183 Cal.App.4th 916 (Cal. Ct. App. 2010) (procedural forfeiture for arguments raised only in a footnote)