- Dax NollenbergerMonterey County Short-Term Rental Regulations
Short term rental, Airbnb, and vacation rental are all words to describe homes that are rented for a period of less than 30-days. Whatever you want to call it, if you’ve explored Monterey County, you’ve probably thought about the idea of owning one of these rentals. For many though, that’s where it stops. If you read my article “What about a Short Term Rental?” then you know just how complicated short term rental ordinances can be. Well, Santa Cruz County makes Monterey County feel like a walk in the park.
In this blog, I dive into Monterey County short term rental regulations and highlight what areas are most kind to Airbnb hosts. If you’d like help finding a STR eligible property in Monterey County to purchase, please reach out! As a general observation, Monterey County has more barriers when it comes to short term rental regulations than Santa Cruz County. Partly because Monterey County is significantly larger than its neighbor to the north. In fact, it’s roughly 6.2x the size (MON: 3771 square miles vs SZC: 607 square miles). This means that there are more incorporated areas with their own municipal government and their own ordinances for short term rentals. While Santa Cruz County only has four incorporated areas, Monterey County has twelve. For the sake of this blog, I will focus primarily on the unincorporated portions of the county and the incorporated peninsula cities consisting of Carmel-by-the-Sea, Del Rey Oaks, Marina, Monterey, Pacific Grove, Sand City, and Seaside.
The very first step in determining eligibility is finding out where the property you are considering is located. This can be done by asking your Realtor (me) or going to this SITE. The colored portion of the map is incorporated, the tan portion is unincorporated. Alternatively, clicking on a specific parcel will tell you the jurisdiction.
Now that we know how to search the for what government body regulates each parcel, let’s talk about them…
First, the unincorporated area of Monterey County. This portion is regulated by the county itself. The county has two distinctions that determine the rules applied to your property. Those distinctions are Inland and Coastal. According to the County website, In the inland areas of the County, short term rentals may be allowed by obtaining an administrative permit for transient occupancy. These permits allow short term rentals for not fewer than seven days and not longer than 30 days. These permits cost approximately $6,000. In the coastal areas of the county, short term rentals may be allowed by obtaining a coastal development permit under the category of similar use. These permits cost approximately $12,000.
To view the Coastal Zone map, click HERE.
To search a specific parcel, click HERE. Once you have searched the address, click on the parcel and scroll to “Coastal Zone” where it will say “Yes” or “None”.
Note: A lawsuit settlement with the County of Monterey allows STRs in the Coastal area of unincorporated Monterey to operate without a permit provided that the Transient Occupancy Tax is paid. This does not apply to Inland areas. Important: Monterey County is drafting an ordinance to overcome this loophole so it’s unlikely to last forever.
Now that it is clear how to determine which regulations apply, let’s talk about them. There are a couple critical notes in regards to Inland short-term rentals. The first is that the county requires that you rent the property for seven days or more. For those considering buying in these areas exclusively for Airbnb, this is a major factor to consider. Additionally, the start up cost in the form of a permit and requirements for application are SIGNIFICANT.
Other key notes:
- A contact person is required to be within 25-mile radius of the rental unit and available 24 hours a day to respond.
- Transient Occupancy Tax is required.
For the Coastal Zone, it’s seems intentionally left unclear. Note the distinction that they “may be allowed” but short-term rentals aren’t specifically addressed. Vacation rentals need to be approved by obtaining a coastal development permit under the category of similar use and the permits are noted to cost between $12,000-$14,000. According to MCVRA.org, “no permit has been granted so the County considered every STR in the coastal zone to be illegal and subject to citation and fines.”
The County does allow Bed and Breakfast permits. A Bed and Breakfast Facility is defined as “an establishment providing overnight accommodations and a morning meal by people who provide rental rooms in their homes. Rent or rental fee can include any form of remuneration including cash, goods or services, barter, or forgiveness of debt.”
A primary distinction here is that owners must be present during the guests stay.
Given the lack of clarity and previous interpretations made by the county as well as the cost associated with a potential permit, it is clear they lean heavily toward minimizing STRs. For the sake of sanity, I’d err on the side of “can’t get an STR permit” in the Coastal zone.
Now the Incorporated areas…
Carmel-by-the-sea
Summary: STR NOT ALLOWED. According to the website, No home or subordinate unit may be rented for less than 30-days.
Del Rey Oaks
Summary: Permits available and no cap!
Key notes:
- 24 hr. contact person required.
- 30-minute remedy time if issues arise.
- Annual inspection for smoke detectors and carbon monoxide alarms.
- Permit is non-transferrable.
- 10% transient occupancy tax.
Marina
Summary: STR for hosted only. According to the website, the duplex or dwelling must be a primary residence, which is defined as an owner’s permanent residence or usual place of return for housing as documented by at least two forms of identification.
Monterey
Summary: STR NOT ALLOWED. Any house rental of less than 30 days is illegal in Monterey.
Pacific Grove
Summary: STR permits are only allowed in the cities coastal and commercial areas (see map link below). Additionally, a lottery system means renewal is not guaranteed.
Key notes:
- Transient Occupancy Tax rate is 12%
- Number of active licenses: 77
- Home Sharing (i.e. renting out a room within a Single Family Residence while owner/authorized tenant resides at the property) is permitted throughout the City subject to first obtaining a Home Sharing License
- License Caps: STR Licenses are limited to 250 City-wide.
- Must be 55+ feet plus away from an existing STR parcel boundary.
Sand City
Summary: STR permits are capped at 15. It is unclear whether non-hosted permits are still allowed.
Key notes:
- Permits are non-transferrable.
- $638 permit application fee.
- $197 inspection fee.
Seaside
Summary: Seaside offers both hosted and non-hosted permits. Hosted is defined as: occupying the dwelling unit as a principal residence and must be present during the occupancy. Non-Hosted is defined as: renting out of an entire dwelling unit on a short-term basis.
Key notes:
- Non-Hosted STR licenses are limited to 90 city-wide.
- Exclusion of STR permit eligibility if with 55’ of an existing STR parcel.
- Two adults per bedroom and a max of 9 adults for homes with 4+ bedrooms.
- Subject to passed inspection by a third-party home inspector.
In summary, Monterey County has taken an excessively strong stance (IMO) on short term rentals, which has significantly limited homeowners’ ability to profit from the tourism industry. The restrictions are numerous and widespread, making it challenging to find suitable areas for short-term rentals. If you are considering Monterey County, there are a few areas that are more welcoming than others. Del Rey Oaks and Seaside provide the most clear and straightforward rules for STRs in the County. Del Rey Oaks has no cap and permits are available. Seaside provides two different permit options and straightforward permit restrictions. The unincorporated inland area provides opportunity for STRs if you are willing to accept the 7+ day rental requirements and an expensive initial permit cost. Pacific Grove is highly restrictive on location of their STR permits but do allow home sharing permits throughout the city. Marina offers hosted only permits and Sand City has limited their permits to 15. Meanwhile, Carmel-by-the-sea and the city of Monterey banned short term rentals completely.
Navigating the complex (and often unclear) STR regulations in Monterey and Santa Cruz Counties can be both exhausting and discouraging. I pride myself on my expertise in this area so if you need assistance finding and purchasing short term rentals in these counties, please reach out. Additionally, if you’d like to receive daily emails for STR eligible properties in these counties, please email me at dax@sereno.com.
The best time to buy is when it is the best time for you. Thank you for reading. 831-227-5847.
– Dax
