Oceanside, California, tightens short-term rental rules

Oceanside, California, has amended its short-term rental (STR) ordinance to cap the number of STRs in coastal areas and ban new non-hosted rentals in residential areas.

According to the ordinance, STRs are defined as rentals for periods of less than 30 consecutive days. The latest version also defines hosted and non-hosted short-term rentals:

• A hosted unit is a “dwelling unit where the owner occupies the dwelling unit as his or her principal residence and offers a portion of the dwelling unit for short-term rental while remaining on-site. In multi-family residential zoning districts only, the owner may occupy a dwelling unit on the same parcel as the short-term rental unit provided the owner remains on-site during all short-term rental stays.”
• A non-hosted short-term rental is a “dwelling unit where the owner of the property does not occupy the dwelling unit as his or her principal residence, or does not remain on-site during rentals, and offers the dwelling unit for short-term rental.”

Non-hosted STR operators must obtain an STR permit from the city and include the permit number in listings. STR permits do not transfer to new owners. No permit is required for hosted rentals or in exempt areas, including North Coast Village and the St. Malo gated community. 

Under the new rules, non-hosted STRs are capped at 480 units in the area west of Coast Highway. Currently, 455 non-hosted STRs already exist within these boundaries, leaving room for only 25 more. New vacation rentals are prohibited in the R-1 residential zone. Existing non-hosted STRs in the residential R-1 zone can continue to operate until the property changes ownership.

Penalties for breaking the rules increased with the latest amendment. Operating without a valid permit can result in fines of $1,500 for the first infraction and $2,500 for subsequent infractions. Hosts with two or more violations are ineligible for an STR permit for 18 months.

Other rules include:

• Only owners, not tenants, are allowed to operate STRs. 
• STRs can have a maximum of five bedrooms and 14 guests.
• Guests must observe quiet hours between 10:00 p.m. and 10:00 a.m.
• STR stays must be for a minimum of two nights.

The latest amendment follows the Oceanside City Council’s action in December 2023 to ban new non-hosted STRs in residential neighborhoods outside of the city’s designated coastal zone. The city first passed STR regulations in 2019.

Approximately 1,200 STRs operate in Oceanside, accounting for around 60% of the city’s overnight lodging. The percentage of STRs that make up accommodations in nearby cities include: 32% in Malibu, 25% in San Diego, 23% in Huntington Beach, 17% in Coronado, and 14% in Carlsbad. The city collects more than $8 million in transient occupancy tax from STR guests annually.

Owners of both non-hosted and hosted STRs in Oceanside are required to obtain a Transient Occupancy Tax (TOT) Certificate from the city. Hosts must collect TOT and Oceanside Tourism Marketing District Assessment (OTMD) from guests, file lodging tax returns, and remit the taxes to the city. 

Short-term rental marketplaces Airbnb and Vrbo collect local lodging taxes from guests at booking. Hosts still need to file TOT returns and remit a $0 return for each period in which all their TOT was collected by a marketplace. STR operators are responsible for all lodging taxes not collected from guests at time of payment.

Avalara MyLodgeTax can help automate and simplify tax compliance for hosts. For more on lodging taxes in California, see our state vacation rental tax guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.