Short Term Rentals in Monterey County

[Dax Nollenberger]

Interested in learning about what areas of Monterey County allow Airbnb's? I've got you covered. 

Monterey County has 12 incorporated areas. For the sake of this post, 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.

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.

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.

Carmel-by-the-sea STR website

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.
Del Rey Oaks STR website

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.

Marina STR website

Monterey

Summary: STR NOT ALLOWED. Any house rental of less than 30 days is illegal in Monterey.

Monterey STR website

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.
Map of eligible areas

Pacific Grove STR website

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.
Seaside STR website

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.

If you'd like to learn more, reach out to me directly.

- Dax Nollenberger