Short-term rentals banned in some areas of Monterey County, California

Monterey County, California, is amending the county code to regulate short-term rentals (STRs). Regulations include permit requirements, limits on the number of STRs, and bans in some areas. With the new rules, approved after years of debate, the Board of Supervisors aims to balance tourism with preserving housing and maintaining the character of local neighborhoods.

Beginning October 14, 2024, all STR operators in unincorporated Monterey County will be required to register with the county for a vacation rental license for a $965 fee. They must also obtain a county business license before they begin operating an STR.

Under the measure, STR operators are also required to:

• Send an informational letter to their neighbors within a 300-foot radius, letting them know the type of STR, who to contact with any complaints, and the license number
• Designate a property manager available 24 hours a day who must be able respond to complaints and arrive at the site within 30 minutes
• Observe local quiet hours; outdoor amplified sound is prohibited at STRs
• List their vacation rental license number on any listings, advertisements, and contracts
• Follow fire safety rules; outdoor fire pits and fireplaces are banned at all vacation rental properties
• Observe regulations on garbage, health standards, occupancy limits, and parking

The amendment defines an STR as the use of residential property for transient lodging for 30 days or fewer. STRs are only allowed in single-family dwellings. Different types of STRs include:

• Commercial vacation rentals: Non-hosted rentals that are rented out more than three times per year
• Limited vacation rentals: Non-hosted STRs that are not rented more than three times a year
• Homestays: Hosted STRs where the owner occupies at least one bedroom during guest stays

Commercial rentals in Big Sur, Carmel Highlands, and the residential areas of Carmel Valley and Moss Landing are banned under the new rules. The measure also caps commercial STRs in inland planning areas of the unincorporated county at 4% of the housing stock in the area. A 4% cap for commercial vacation rentals in coastal zones — along with other aspects of the law that affect coastal areas — will need to be approved by the California Coastal Commission.

Current Monterey County STR operators who don’t already have permits will need to submit applications and come into compliance with the new rules by April 14, 2025. Properties that already have permits must comply by the time their permit expires or within seven years, whichever comes first. Penalties for violating the law can result in fines of up to $5,000 per day and/or revocation of the operator’s permit.

Regulations also apply to STR marketplaces such as Airbnb and Vrbo. All STR listings on these platforms must include a valid license number. Marketplaces have 10 days to remove noncompliant listings once notified by the county. Failure to do so can result in fines of up to $1,000 per offense.

STR hosts are required to get a county transient occupancy tax (TOT) certificate, collect TOT from guests on all stays, and file returns. While Airbnb and Vrbo collect lodging taxes automatically for some California counties, neither collect TOT for hosts in Monterey County, leaving hosts solely responsible for tax compliance.

Avalara MyLodgeTax can help short-term rental hosts automate lodging tax to streamline and simplify their lodging tax compliance. 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.