Coachella, California, loosens short-term vacation rental rules just in time for festival

The Coachella City Council decided to change its short-term rental law by removing requirements that short-term rental hosts pay a $60 license fee and undergo inspections. The decision came last week, shortly before the first weekend of the annual Coachella music festival.

Council members expressed concern that the rules would prevent short-term rentals from operating in the city and generating tax revenue.

The city is offering a refund to anyone who already paid the short-term rental license fee. Short-term rental operators are still required to apply for a city business license with the city, with a fee of $100.

The city’s new short-term rental law was passed a year ago, but only went into effect in February. The ordinance also requires renters to be over 21 years of age and “responsible.” Hosts must designate a local emergency contact to make sure guests staying at the rental comply with all laws and noise regulations. The contact is required to respond to any complaint within 45 minutes.

Short-term rental hosts are required to collect a 9 percent transient occupancy tax from guests and pass it on to the city. Airbnb collects the tax from guests automatically on behalf of its hosts. However, hosts who use other rental platforms, such as VRBO or HomeAway, are required to collect and remit lodging tax themselves. MyLodgeTax is a service that can help short-term rental hosts take care of complying with transient occupancy tax requirements.

The city only started collecting the tax itself when the new short-term rules went into effect, as it previously had no hotels or other accommodations that were subject to the tax. The city estimated that the transient occupancy tax could generate up to $50,000 per year.