Pay to Stay: The impact the end of tribal land leases could have on local communities
Land lease negotiations, it's a costly issue that thousands of homeowners across the greater Palm Springs area are going to face in coming years.
In Karen Devine's in-depth report "Pay to Stay," she takes a look at the impact that the end of decades-long tribal land leases could have on many communities in the valley.
A checkerboard map shows how the Agua Caliente Band of Cahuilla Indians own every other square mile in Palm Springs, a portion of Cathedral City, Rancho Mirage and unincorporated areas of Riverside County.
To date, Agua Caliente tribal allottees lease more land for residential development than any other tribe in the country. According to the Bureau of Indian Affairs Palm Springs agency, there are nearly 20,000 Indian leased properties in the greater Palm Springs area including commercial leases, residential subleases and timeshares.
Just over 800 homeowners in Mission Hills Country Club in Rancho Mirage, living on Indian-leased land know this all too well. They were alerted last fall that the 99-year lease had been re-upped and while most knew it was time for that to happen, many felt the sudden increase in fees and when they were due was astonishing.
“People were shocked you know, I mean, there’s a plus to getting the 99-year lease because it gives stability and you know, that’s a good thing. But they didn’t expect $17,000 and for their land leases to double overnight," Franklin said.
Homeowners were given approximately 90 days to pay $17,650. They had to agree to monthly rent increases and if they missed the December 31 deadline they would face further rent increases and other fees. If they decided not to pay they could lose their homes when the current leases expire, some in 2034 and others in 2054.
According to Franklin, every time a lease is renewed or extended it’s brought up to market value. That’s the reason for the rent increase.
A number of Mission Hills residents tried to fight the new fee structure, but as zero-hour approached residents had a decision to make. Signs popped up in front of some homes saying, “We’re staying not paying.”
Others opted to pay to avoid more fees, while some residents wrote the check so they could put their house on the market without future financial repercussions, in front of some homes saying, “We’re staying not paying.”
Others opted to pay to avoid more fees, while some residents wrote the check so they could put their house on the market without future financial repercussions.
As of last week, 62 percent of the more than 800 homeowners have signed up for the sublease.
“There are right now about 40 listings in this 800 group here, a year ago there was like 5, cause people are selling em, you know, they want to get out of them because they can’t afford the 17,000," Franklin said.
Allen Brecke, a seasonal resident and homeowner for more than 20 years says the whole thing was a bit of a surprise but...
“I was glad that it happened. 99-year lease really helps the stability of the place, you know the marketability and leaving it to the heirs and so forth," Brecke said.
If you’re doing the math, you understand the leases due to be renewed have not actually reached 99 years. That’s because, according to franklin, lenders won’t issue a 30-year mortgage for a home on land held by a tribal allottee, without 35 years remaining on the lease.
"Once a lease is redefined, a new 99-year lease there can be some benefits to a homeowner, right?” Karen asked Franklin.
Franklin responded, “Oh absolutely it’s almost fee land at that point because nobody’s going to be here 100 years from now.”
He says it’s still less expensive to buy a home on Indian leased land. It allows people to get into some of the more well-known and established country clubs like mission hills. But, franklin says you need to do your homework. And if your lease is coming up:
“Don’t wait, be proactive and do something and get together and start this thing from the beginning, and not wait until somebody else has made the decision and then they come to you and say take it or leave it," Franklin said.
If you live on Indian-leased land or you're looking to buy and want to know when the leases are coming up on certain properties: