PALM SPRINGS, Calif. — Hundreds of Pucci- and pastel-wearing partygoers mingled on Feb. 16 among palm trees and model Alfa Romeo convertibles at the Bank, a renovated 1955 savings and loan in the downtown of this desert city. Looming over them were clips of Sean Connery as James Bond, in films like “Diamonds Are Forever,” projected onto a wall above the main bar.
It was opening night of Modernism Week, when architecture and design enthusiasts descend in droves to take tours of buildings reflecting the area’s commitment to the mid-century aesthetic and design preservation. Restaurants and galleries are packed; hotels and home rentals are booked.
But this year, along with chatter about the Obamas’ recent vacation in nearby Rancho Mirage, the dry air crackled with the conflict that has arisen between the Palm Springs City Council, populated by long-term full-time residents (including Mayor Robert Moon), and proponents of the surging short-term vacation home rental market, empowered in the last several years by platforms like Airbnb.
On one side is the old guard of wealthy retirees who believe that neighbors and communities are being disrupted by transient vacationers — who, they say, tend to be rambunctious partiers, overflowing from the Coachella Valley Music and Arts Festival, which takes place annually in Indio, about 25 miles away.
On the other are more recent residents, many in their 30s and 40s, who bought homes of depreciated value after the real estate market collapse of 2008. Some then renovated and decorated them in the celebrated Palm Springs mid-century style with the intent of paying off their mortgages and maybe even making a profit by renting to vacationers looking for an authentic Palm Springs home experience.
Shon Tomlin is a member of this new guard. A longtime entertainment industry executive, Mr. Tomlin had vacationed here for 25 years, staying in rented homes. In 2012, he bought a place for his mother, helping her move from Northern California, and began seeing the area in a new light.
“It was a sleepy little desert town having new life breathed into all the older homes left unloved and in disrepair but that had great bones,” Mr. Tomlin said. “Cool, hip people were buying places and bringing them back to life in thoughtful, stylish renovation.” Many filled their homes with mid-century touches, yoga mats and other special amenities and built sleek websites to market them.
Mr. Tomlin eventually bought and renovated two condos, which he leases to long-term renters, and a house, which he updated and rents to short-term vacationers. He also bought and renovated another house to live in full time, managing his properties and producing freelance projects.
Tim Brinkman, a tech investor from San Francisco who vacations here regularly with his family, is another relatively new player in the changing landscape. In 2012, he and a partner paid $2.2 million in cash for an abandoned building that once housed the Palm Springs location of the Don the Beachcomber Polynesian restaurant. They invested $5.5 million in renovations, creating a hub of the flourishing Uptown Design District that now includes a popular coffee shop, tiki bar, restaurant and a few design shops and galleries. The rear of the complex was re-branded as the Twist and consists of 35 apartments, 18 with long-term tenants and 17 as furnished vacation rentals. If his rental permits are canceled or curtailed, “I will sue the city,” said Mr. Brinkman, who also owns several homes — including one formerly owned by Elvis Presley — and other buildings here.
Jerry Keller, a well-known resident and the owner of an establishment restaurant, Lulu California Bistro, who helped broker an agreement among representatives from the Council, hotel industry and rental management companies about limits on short-term rentals, said: “There is so much anger and frustration. We got everyone to agree to something no one was happy with.”
An ordinance based on this agreement was passed at a public hearing on the evening before the Modernism Week opening party, pending approval of the planning commission, but the mayor voted against immediately enacting it, resulting in confusion about compliance. (A lawyer representing a community group opposed to vacation rentals sent a letter to the city on Thursday threatening litigation unless there was an immediate “moratorium on new vacation rentals” permits.)
Palm Springs is not alone, Mr. Moon pointed out at the modernism party, in dapper dress and circulating among constituents. “Paris is having the same problem,” he said. (Also Austin, Tex., and Naples, Fla., among many other cities.)
“I’m not a fan” of the short-term market, he said. “It has a negative impact on the feeling of the neighborhood. People would fall in love with Palm Springs and buy a house and rent it out to help pay the mortgage. Then wealthy people started buying more houses and never having the intention of using it as a second home.”
Ten percent of the homes in Palm Springs are now used as short-term rentals, Mr. Moon said. This past December, the cost of a short-term rental permit climbed to $900 a year from $225. “Tourism is very important,” he said, “but my first priority is to residents.” He acknowledged that regulation might negatively affect the value of homes, because potential buyers will know there are limits on how they can use the property, but, he added, “we don’t want to do nothing.”
About a two-hour drive from Los Angeles, this city has long been a glamorous retreat for Hollywood stars, executives and wealthy retirees. But since 2007, when the AMC series “Mad Men” started more broadly popularizing mid-century modern design and Coachella expanded into a three-day bacchanal, there has been a surge of interest in the area, whose local airport is now served by direct JetBlue and Virgin America flights from New York.
“What created the resurgence of Palm Springs is it became accessible,” said Tara Lazar, a lifelong resident who bought and renovated the Alcazar Palm Springs hotel in 2009 and now owns and operates three local restaurants and a bar called Seymour’s.
“It was always for the elite and the wealthy,” Ms. Lazar said, “and then all of a sudden, other people could afford to come and stay. There is now a middle market. We have young people in Palm Springs, and that hasn’t happened in more than 20 years.”
A few of those whippersnappers were sipping cocktails at a party on the second evening of Modernism Week. “Millennials are looking for places with income suites,” said Bobby Berk, a home design entrepreneur, “because they sort of came of age through the crash of 2008, and they want to know that even if you lose your job, your home can still work for you.”
Mr. Berk was chatting with Jaime Derringer, the founder and editor of Design Milk, a blog with an Instagram following of 1.5 million. “This is the Instagram generation and it wants an experience associated with an area,” Ms. Derringer said, “and in Palm Springs, that means the desert, the sun, the palm trees, the mid-century house. You want to stay places that are Instagram-worthy because you are living your life as content.”
The backdrop for the night’s content was a new home decorated for Modernism Week by Mr. Berk and built in the style of Joseph Eichler by KUD Properties, which is owned by Troy Kudlac, a bow-tied broker and developer who is in favor of less regulation for vacation rentals.
“The town was started this way,” Mr. Kudlac said. “People came out here specifically to stay in a house and have a week of the Palm Springs life.”
In December 2010, there were 1075 units here registered as vacation rentals. By this past December, that number was 1967.
“It has gotten out of hand,” said Councilman J. R. Roberts, who along with Councilman Geoff Kors has spearheaded the city’s efforts to restrict short-term rentals. Sitting over coffee in Mr. Roberts’s 1954 dwelling, known as the Edris House, the two discussed their unhappiness with the shifts brought on by Airbnb, VRBO and others, even as they considered the ways the rental market has benefited them. Both men have owned homes that they rented. “It made me a fortune,” Mr. Roberts said. “People come to let down their hair and live the martini lifestyle. You will be living just the way Frank Sinatra did in 1947.”
Some of the current vacationers — maybe taking their cues from scene hotels like the Ace — spend their days and nights poolside, talking, drinking and perhaps playing music, he said. Homes with short-term rental permits are held to strict rules prohibiting all outdoor speakers (even portable ones). After 10 p.m., no excessive noise is permitted. Last year, the city issued 207 citations against owners of vacation rentals, at least some of them noise violations, up from 139 in 2015.
“We want anyone who wants to move here part-time to use their vacation rental some of the time,” Mr. Kors said. “What we don’t want is conversion of residential properties in a residential-zoned neighborhood to be used as a full-time short-term tourist lodge or motel.”
In 2011, Fred Ross, James Hansen and a third partner bought a half-vacated building containing five apartments set around a swimming pool. Seeing an opportunity to create a boutique rental for family reunions and small company retreats, they renovated the units and put chaise longues and a barbecue in the pool area. Mr. Ross moved from Portland, Ore., to manage the property, named Thirteen Palms, and joined the local neighborhood group.
They welcomed the Airbnb platform. “We took advantage of shifts in the hospitality industry and have been successful,” said Mr. Hansen, who works as a corporate comptroller in San Francisco.
The men said they wanted to comply with city regulations but were confused by them. The regulation pending review will require them to convert the property into a hotel, adhering to different fire, safety and accessibility regulations.
But the size of their lot will not allow Thirteen Palms to comply with other guidelines for licensed hotels. “There is no precedent for this,” Mr. Ross said, “and no one can tell us what is going on or what the city would like us to do. So I am just going to back to running my business. When I get a notice in the mail that something has to change, we’ll address it.”
(Councilman Roberts said: “We’ll have to look at some properties case by case. We will work with them.”)
Ms. Lazar, the more seasoned hotelier, said that three houses near her home were short-term rentals, and that she had called the police seven times because of noise coming from one. “It’s one owner not vetting guests carefully enough,” she said.
But she sees the effort of the Council as over-regulation that could snuff out the short-term rental market. “We need it,” she said. “We are at our root a resort town.”
An earlier version of this article applied an erroneous distinction to the Don the Beachcomber Polynesian restaurant in Palm Springs. It was not the restaurant’s first location. The original is in Los Angeles.