Buried deep in an 80-page lease agreement she was asked to sign in March, Paula T. Webb spotted something that seemed unusual. There, among dozens of paragraphs of small print detailing her responsibilities as a renter, was a notice that the landlord could increase the rent “at will.”
“I’ve never seen anything like that,” Webb said earlier this month while cleaning what is now her former home in Palm Springs. “People are being asked to surrender their rights and allowing leasing companies and landlords all sorts of rights that are typically forbidden in California. People don’t read these documents because they’re panicking. I was panicking too.”
That sense of panic is familiar if you’re a renter in Palm Springs and elsewhere in the Coachella Valley. While it’s no secret that renting in California has always been an expensive endeavor, what many don’t see is what has been brewing locally for the past two years: The rent, as the popular meme states, is too damn high. But it’s also too hard to find and often comes with conditions unheard of until recently.
“People need to know,” Webb says of the current state of renting throughout the Coachella Valley. “It’s a nightmare. Everybody’s getting ripped off.”
You don’t have to look hard to find examples of what Webb is talking about. In just the past year, reports of double-digit rent hikes and exorbitant charges usually found in major metropolitan markets — including “pet rent” and deposits equal to three times the cost of monthly rent — have filled social media pages. And those reports are only from people offered contracts. Hundreds more have turned to their neighbors on Facebook, Nextdoor, Craigslist and elsewhere pleading for leads on accommodations. Finding few options, many have agreed to pay just to be notified when units are available. Worse yet, they’ve abandoned their searches in Palm Springs and the surrounding area completely.
“I waited weeks to hear back from places, if I heard back at all,” Webb said of her recent experience searching for a rental — a search that ended when she signed a lease on a Palm Desert condominium. “Some of these places wanted a $150 non-refundable fee just to be put on a waiting list.”
Rents doubled in seven years
Webb’s specific situation is not uncommon. The owner of the townhome she’s lived in for years has decided to sell the property. He’s motivated by the fact neighboring units are going for more than $500,000, where just two years ago they sold in the mid-$300,000s. A best-selling author who writes on the psychology of stock market trading, Webb moved here from Chicago six years ago and said it was easy to secure clean, comfortable, affordable accommodations while she considered purchasing a home.
“It wasn’t difficult at all,” she said when asked to recall the last time she navigated the Palm Springs rental market. “There were so many choices. It was wonderful.”
Also wonderful, she said, was her landlord. “I lucked out,” she offered. “The landlord only raised my rent 3% every year.”
Webb may not know just how fortunate she was. Data made available by Zillow, similar to that found on Rent.com, shows the following:
- Rents for all available units on Zillow increased annually at a rate of 5.8% between the start of 2014 and the end of 2019 in Palm Springs, then increased 10% in 2020. In 2021, they spiked 25% on both Zillow and and Rent.com.
- The cost of an average rental in Palm Springs listed on Zillow was $529 more in January of this year than it was when the pandemic started in March 2020.
- For the first time, the average monthly rent in Palm Springs is now above $2,000 on Zillow. While that’s below the current state average of $2,300, it’s still double the rate asked for when Zillow began tracking rates here seven years ago.
Looking for relief elsewhere in the Coachella Valley? Good luck. Zillow data shows rents have also doubled or nearly doubled in all cities in the Coachella Valley with significant numbers of rental units. In Desert Hot Springs, for example, rents increased 122% in the past seven years. In Cathedral City they’ve gone up 94%.
What if you choose to leave the Valley entirely but remain in California? There’s not much hope there, either. The state has the fourth highest rent in the nation, with a fair market value — determined by the Department of Housing and Urban Development – of $1,538 for a studio, $1,854 for a one-bedroom, $2,274 for a two-bedroom, and just over $3,000 for a three-bedroom.
Similar to the ongoing issues faced by those in the property selling business, property management professionals The Post spoke with say the law of supply and demand is, to no one’s surprise, the driving force in the rental market. Inventory of homes for sale in the Coachella Valley is believed to be at an all-time low, and it’s a similar story for rentals.
“The whole market has changed in the last 15 months,” said Hal Castle, an account manager at Best Property Management in Palm Springs. “The amount of inventory has dropped at least 80 to 85%.”
Castle is a former realtor who has been in the property management business for the past five years. Typically, he said he would expect about 1,000 rentals available between Desert Hot Springs and La Quinta. “Now take out about 85-88% of the supply, that’s what you have now.”
“Demand has doubled, and inventory has shrunk to a staggeringly low level,” he said. “If you’re under $2,000 a month you won’t get anything just about anywhere, and you’re definitely not going to get anything in Palm Springs.”
Castle said he suspects the pandemic played a role in the current rental market. As more people were able to work from home, more people decided to make their home in Palm Springs, whether they were buying or renting. Low interest rates made buying more attractive, he added, so property owners like Webb’s landlord had a deep pool of willing buyers. When their homes sold, they were removed from the rental market.
Corporations buying homes as investments — including short-term vacation rentals — also played a role. “That’s a smaller percentage,” Castle said. “But it is still happening.” In a July 2021 report, real estate analytics firm Green Street concluded that renting out single-family homes is expected to deliver annual returns for private investors in the next three years of 6.8%, compared with 6.1% for apartments, 6.3% for industrial properties, and 6.4% for malls.
Will the market improve for renters? Castle thinks it might.
“Coming in the summer there’s going to be a flat spot because demand is so high,” he predicted. “That would be the best time for tenants to find something. It might be wise to wait until the flattened summer market.”
A familiar struggle
Palm Springs Mayor Pro Tem Grace Garner certainly hopes the market improves. In what may be one of the most glaring signs that the rental market is in crisis, the person who stands to be the city’s next mayor — should she win re-election this fall — is struggling to find a new place to rent.
Garner currently resides in a 560-square-foot one-bedroom condominium but is searching for a two-bedroom unit as she prepares to become a resource parent — someone trained and certified to be both a foster parent and an adoptive parent. She acknowledges her situation is unique — she purposely moved into District 1 following the switch away from citywide elections — and has no regrets. Still, she said her home search in the district four years ago often left her feeling defeated.
“Several times I got frustrated and thought maybe I wouldn’t run for City Council,” she recalled. “I thought long and hard before announcing my candidacy. I was thinking, ‘Am I willing to stay in this one bedroom for four more years so that I can serve the people of Palm Springs?’ And I decided that was important enough and that the people of Palm Springs were important to me. It has been the highlight of my life. But it comes at a sacrifice.”
Garner is not the only member of the City Council who rents. Her colleague, former mayor and current Councilmember Christy Holstege, rents a family home with her husband across town in District 4. Both Garner and Holstege are part of what some have referred to as “Generation Rent” — adults under the age of 40 who have effectively been forced out of the housing market and may never have the same opportunities as their parents.
“I was told I could have $240,000 for a loan last time I applied,” explained Garner, an attorney who supplements her $29,000 City Council salary with consulting work. “There were some houses in Desert Highland Gateway Estates in the high $200,000 and low $300,000 range. But I would have needed my parents to cosign. And that was for a mortgage that was $600, maybe $800 a month. Also, if you haven’t been on the same job for the last five years, they won’t give you as good of a loan.
“We have a generation that does not stay with the same job like their parents did. There’s a lack of opportunity, and a lack of retirement like they had. It’s the complete destruction of the workforce our parents took advantage of.”
Like many would-be homeowners, Garner’s earning power didn’t keep pace with home prices. Those properties in the $200,000 to $300,000 range just a few years ago are now routinely sold for double that amount, while the average-size home in the city currently sells for more than $1 million. Also like many in her age range, Garner is carrying student loan debt and drives a 15-year-old car that she worries is on its last legs and will need to be replaced.
“There was no opportunity for me to buy, and I’ve always had student debt, so that further decreases the amount people will give me for a loan,” Garner said. “I’ve been setting aside money for years that could go to more rent, but I can’t live in Palm Springs without a car.”
For now, while she nervously keeps an eye on her car, she also continues to eye the rental market, hoping for a stroke of luck.
“I just keep my eyes open,” Garner said, explaining her technique for house hunting. “I check a lot of different resources weekly to see what’s out there. My landlord is extremely kind and generous and willing to work with me if I do find a place. There’s just nothing that falls within my price range.”
New ideas for old issues
Garner and Holstege are no doubt two renters with some pull at City Hall. And while any efforts at assisting their fellow renters in Palm Springs would go a long way, both are also focused on the bigger picture. Garner is a member of the Southern California Association of Governments (SCAG) Riverside County Housing Policy Leadership Academy. Holstege is running for the State Assembly, and frequently speaks about the plight of her generation when it comes to housing.
“I share the concerns about our rental market,” Holstege said at a recent City Council working session where short-term vacation rentals were discussed. “There has been a housing price spike, and a rental spike, throughout California. What we need to do is think about and look at the long-term data. I’m really interested in looking at multifamily housing and how we can increase the supply. … It’s just a question of causation.”
For her part, Garner is hoping to convince both her City Council colleagues and city staff to explore ways to increase the available rental stock. One idea she has is to examine just how many housing units in the city sit vacant for long stretches and could be available for renters. It may take some creativity, but by pulling utility records and working with Homeowners Associations, she believes a list could be produced and owners of properties on the list approached.
Some of the data Garner and city staff might find is already available. According to the latest complete US Census data, gathered in 2010 and due for an update:
- The city has 36,500 units of housing, including single-family homes, condominiums, apartments, mobile homes, and townhomes.
- Of those, roughly 25,000 are occupied full-time by an owner or renter (68%), while the rest — 11,500 units — were considered unoccupied or occupied only part of the time.
- A fraction of those 11,500 housing units were listed for rent, but most were used as second homes or seasonal rentals. That fact is expected to remain true through at least 2024.
What if none of the owners of empty housing units want to help? Garner has another idea: Infill.
“We have seven city-owned lots in District 1,” Garner noted, adding that if they were turned over to nonprofit organizations working on housing issues, “Then members of our community are able to own a home in the city they grew up in, and their rental also opens back up.”
“There are so many people in our city who want to buy. They have steady jobs; they can pay the mortgage. But they need help to get into a home. There are opportunities here to leverage resources we already have and to create even more opportunity.”
Land banking would also help, she said.
“We buy as many lots as we can, as many rundown homes as we can, and we demolish them and we build infill,” she said. “It all goes back directly to the community. It wouldn’t necessarily be a lot of housing all at once, but it would be something tangible. It would show that the city cares.”
Until government steps up, she concluded, “All we’re doing is just pushing poverty around. And that’s what we’ve done for the entirety of our nation.”
Leading the charge
One of the organizations Garner mentions as a possible partner for the city as it works to end the housing crisis is Lift To Rise. The idea of the nonprofit was first sparked in 2014, when four Coachella Valley organizations began to discuss ways they could work together for greater impact. Today, the organization’s mission is twofold: It works to create both housing stability and economic opportunity. It’s one of the few places renters can turn when they need assistance, whether it’s help paying rent or help finding and keeping a rental.
While Lift To Rise gained recognition during the pandemic — helping to distribute millions of dollars in federal monies through the United Lift Rental Assistance Fund — President and CEO Heather Vaikona is quick to point out the issues faced by the organization’s clients were prevalent long before COVID-19. The Coachella Valley economy is driven by tourism on one end and agriculture on the other, and the people cleaning rooms and creating cocktails at resorts, as well as those growing and harvesting food, are paid well below what it takes to pay for even average rent, let alone the down payment on a home.
“The pandemic and housing crisis has laid bare for everyone that our economy is built on the backs of exploitation,” said Vaikona. “History is going to look back on us as a society of people that (rested) on the backs of low-income folks who are not earning enough on their labor to stay housed. It doesn’t have to be this way.”
Vaikona said she sees glimmers of the way it should be right here at home.
Riverside County is one of the few jurisdictions in the nation that successfully distributed federal assistance funds during the pandemic, she said, noting that Lift To Rise helped 65,000 people stay housed in the community during the past two years. Nearly half of the applicants for assistance were single parents, and most of them were single Black and brown mothers — the very people whose labor helps fuel the Valley’s economic engine.
“In a lot of places in the country rental assistance from the federal level has been a disaster, it’s not getting distributed,” she said. “Riverside County is different. Riverside County is getting the cash out.”
Key to that success was the removal of barriers that too often slow the process of getting assistance where it’s needed, said Vaikona. Both tenants and landlords benefit when money flows more freely. And as evidenced during the pandemic, when the government simply mailed checks or dropped funds into bank accounts of many Americans, determining eligibility doesn’t have to take so long.
“Paperwork buries people. Getting rid of means testing for Covid payments proved that it works to just get people money they need,” said Vaikona. “We’ve all been duped into believing we shouldn’t trust poor people.”
For her part, Garner couldn’t agree more.
“Some people still have this idea in their heads that somebody who pays $850 for a unit is somehow not the best tenant,” she said. “These are hard-working people who have a lot of pride.”
More information: Need help with rent or with a rental issue? Lift To Rise can help. Just go to www.lifttorise.org for more information. Interested in the United Lift program? Turn to www.unitedlift.org for that.