Co-ownership Is Part of the Housing Solution in Palm Springs

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One thing that unites most Americans is the understanding that there is a nationwide housing shortage, a problem that is particularly acute in Palm Springs. While primary homes understandably receive the most attention, the second home market is also part of this problem. Second home ownership as it is commonly experienced in the U.S. is inefficient, exclusionary and wasteful.Second homes typically are single-family homes that sit vacant up to 80% of any given year: a practice that’s especially hard to defend at a time when we’re facing an affordability crisis. At the same time, demand for second homes is on the rise, as people continue to work remotely and look for ways to spend more time with their friends and families. In the City of Palm Springs, prices for second homes rose by a startling 30% in 2021, with inventory at record lows.What Pacaso offers is a more sustainable and accessible way to own and enjoy a second home that puts considerably less pressure on the community. We do this through co-ownership, which has been a common, rightful and established practice in Palm Springs for years. In fact, fully 16% of homes in the City of Palm Springs are non-owner occupied and owned in an LLC or trust that allows for multiple owners. Over decades, co-ownership has traditionally taken the form of several friends or family members wanting to share a second home, or grandchildren who inherit a house from their grandparents. We made it simpler and more accessible by offering support and technology to people who want to choose this ownership option. To ensure we are not adding pressure to the market, we pay market rate for luxury homes. The Palm Springs homes we have offered for sale are 2-5 times the City’s median home value, because they’re luxury properties aimed at the upper tier of the market. We are not competing with typical single-family homes. Instead of five families buying five median-priced houses to use as second homes, five families buy one luxury home. After the co-owners have been assembled, Pacaso retains no ownership in the home and transitions to supporting the owners as a local property manager.People have the right to own a home in any configuration that they choose. Co-ownership of property is a long-established right, and we stand by making it simpler for people to own a luxury second home at a more accessible price point. The owners we serve are making a long-term personal commitment to being a part of the community in Palm Springs. Instead of those second homes staying empty for 10 months out of the year or being added to the pool of short-term rentals, Pacaso owners spend more time in this community and create more community connections. In addition, Pacaso engages with local groups to make sure our presence and participation in the community are positive. We actively enforce an owner code of conduct that ensures our Pacaso buyers are responsible, committed and respectful of the space they are in, and Pacaso owners are not allowed to use their homes for short-term rentals under any circumstances.We’re honored to have a presence in Palm Springs, and we look forward to continued conversations with Palm Springs leaders about how Pacaso and the homeowners we support can continue participating meaningfully in this community.

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