Monterey County Vacation Rental Alliance

Supporting Visitors, the Economy & our Neighborhoods

Monterey County Regulation

NEWS

Monterey County Planning Commission Denies "Similar Use" Permit For Lewis Family
The Lewis family involved in a lawsuit with Monterey County on short-term rentals applied for a "similar use" permit, a permit process that the County has stated is available to STR owners. However, the County staff rejected the application. When it was advanced to the Planning Commission, the Commission also denied the permit. For media coverage, see Carmel Pine Cone. Get more information below on the "similar use" permit and the Lewis case.

WHAT REGULATION(S) AFFECT YOUR VACATION RENTAL?

If your STR is in an unincorporated area of Monterey County, your home is subject to County regulation. The unincorporated inland and coastal regions of Monterey County have different regulations. 


To determine if your STR is in the coastal zone or the inland areas, you may click on the following links:

North Coast Map        Del Monte Forest Area Map       Carmel Area Map


Monterey County Regulation

The inland region of the County of Monterey has a regulation controlling STRs, but the permit fee is very high and the process to get the permit is lengthy and burdensome. The permit cost is about $6,000 and the process may take months. If the owner obtains a permit, he may rent for any period of 7 days or more. Any unpermitted STR in the inland region is subject to citation and fines.


An STR in the coastal region of the County is now prohibited and subject to citation and fines. In the coastal zone there is no County ordinance that permits STRs but there is also no County ordinance that specifically prohibits STRs. However in July 2015, the County released a memorandum officially stating its “interpretation” that, if STRs are not specifically permitted by ordinance, they are prohibited. 


Evolving County Interpretation on Coastal STRs

The County continues to claim that STRs are not completely banned in the coastal zone, but can be permitted as a "similar use" to a use that can be permitted (e.g. BnBs). In reality, this is a falsehood. Here is the history of the County's "interpretation" affecting STRs in the coastal zone. Read the two County code interpretations (original and revised) regarding STRs and the pertinent Coastal Commission letter.

 

1. Here is the original July 9, 2015 County interpretation that coastal STRs are not permitted:  

http://www.mcvra.org/Mike%20Novo's%20Interpretation%20of%20Short-Term%20Rental%20Regulations.pdf

The original states, "Rental for 30 days or less (no-bed and breakfast) is not permitted in the Coastal Zone."

 

2. Here is the Coastal Commission’s letter dated June 23, 2016 to the County:

http://www.mcvra.org/Coastal%20Commission%20Letter%20to%20Carl%20Holm.pdf

 The letter reads, “At this juncture it is our (CCC) opinion that vacation rentals are allowable in Monterey County’s coastal zone under the LCP (Local Coastal Plan), and we highly recommend that instead of attempting to suggest they are prohibited or pursuing (citing) such prohibitions, that Monterey County instead work with us to develop regulations that serve to ensure Coastal Act-required protections are in place to address any potential concerns…” and “…efforts along these lines were undertaken by the County back in 1997, but those efforts were apparently discontinued. We would suggest that now is an appropriate juncture to restart that effort.”

 

3. So on September 20, 2016 the County revised the interpretation:

http://www.co.monterey.ca.us/home/showdocument?id=13599

The original interpretation states coastal STRs are not permitted but conveniently the revised version states, “Rental for 30 days or less may be permitted in the Coastal Zone with an approved Coastal Development Permit based on a determination by the Planning Commission that the proposed use is of a similar character, density and intensity to those listed in the applicable zoning code sections if determined to be consistent and compatible with the intent of the applicable Chapter of the zoning code and the applicable land use plans.”

 

It is MCVRA’s opinion that this is the County’s smoke screen for the Coastal Commission by trying to say there is no County ban on coastal STRs. Two STR owners have inquired about getting a “similar use” BnB type permit and were told the application fee would be $9,000 - $11,000. And BnB permits require the owner or a manager be on site. The County has admitted that no such “similar use” permits have been issued for STRs.


Legal Opinion Opposing Monterey County’s “Interpretation” on Short-Term Rentals

Our attorney, Gary Patton, argues strongly that the County’s interpretation is incorrect.  He reasons that the lack of a permitting process for short-term rentals does NOT make them illegal.  Click for Gary Patton’s Challenge. 

Short-Term Rental Opponents Lash Out. Monterey County Gave Them Ammunition

The July 2015 Monterey County memorandum stated its opinion that short-term rentals in unincorporated areas of the coastal zone are not permitted.  The memorandum asks, "Which Monterey County Codes apply to the short-term rental (30 days or less) for overnight accommodations?"  But the memorandum never identifies the Code(s) applying to the coastal zone.   The argument is that, if short-term rentals are not specifically permitted by regulation, they are therefore prohibited. 

This is not new but the memorandum fuels opponents who have strongly resisted the development of an ordinance permitting short-term rentals. They like the status quo where short-term rentals are considered illegal.   


You may be subject to fines and the termination of your business even if you have been paying transient occupancy taxes to the County.  The County investigates “illegal” short-term rentals when a neighbor complains.  There are cases where property managers and owners have been fined and shut down.   If you are contacted by the County code enforcement, call or email MCVRA before you do anything else.


Lawsuit Challenges Monterey County’s Short-Term Rental Prohibition on the Coast

The case of Lewis vs. Monterey County challenged this “interpretation.” Unfortunately, the judge ruled in favor of the County as described below. The owners of a home in Pebble Beach filed a lawsuit against the County (Lewis vs. Monterey County) over rules that bar them from using their house for short-term rentals. The complaint argued that the County permits short-term rentals in the inland areas, but discriminates against coastal owners by prohibiting, citing and fining them for short-term rental activity. While MCVRA was not a participant in this case, it was of vital importance to every short-term rental owner along the Monterey coast. For the full Pine Cone article, click on Lawsuit charges short-term rental ‘discrimination.’ 

The article is fairly accurate with one important exception. The paper states, “County planning director Mike Novo told the Pine Cone that in 1997, County supervisors passed an ordinance regulating short-term rentals in the coastal zone, but the California Coastal Commission never certified it.” This suggests the California Coastal Commission caused the lack of certification. The truth is, the County failed to respond to administrative issues the Coastal Commission had with the ordinance. Carl P. Holm, Director of the Monterey County Resource Management Agency stated in a March 27, 2014 letter to the Board of Supervisors, “Best I have been able to determine is that there was a good amount of opposition to allowing this use (short-term rentals) so the planning management at that time (1997) set the ordinance aside."

The Case of Lewis vs. Monterey County

In this case, the judge has decided in favor of the County. While there is no explicit provision in the County code prohibiting short-term rentals, the judge held that since there is no specific permission that means, as the County has been contending, that short-term rentals are prohibited in the unincorporated areas of the County coastal zone.  However, the judge referred to the County code as, “a byzantine collection of less-than-clear, ad hoc provisions apparently drafted or adopted with little regard for the ordinance scheme's internal consistency.” The judge went on to state, “Consequently, the Court has expended inordinate judicial resources divining the County's statutory intent. It is unnecessarily close to the brink of requiring persons of ordinary intelligence necessarily to guess at its meaning.” See Statement of Decision. So on the basis of bysantine, adhoc code the County continues to cite owners. The California Coastal Commission does not agree with the decision nor the continued citations.


This does not change MCVRA’s mission to get a fair ordinance for all unincorporated areas of Monterey County. We are disappointed by the decision but undeterred. 

Lewis vs. Monterey County Lawsuit Appealed

The Pebble Beach owners who sued Monterey County last January, challenging the County’s rules prohibiting them from using their oceanfront home for short-term rentals, may have lost their case in Monterey County Superior Court, but the judge’s decision was so critical of the County, the owners have appealed to the California 6th District.   Click here for background.   Click here for Pine Cone coverage.

The Monterey County Weekly summarized the coastal zone situation with coverage titled "Absence of Law, With the legality of short-term rentals still unclear, county planners progress on an ordinance."   See Full Article.

MONTEREY COUNTY RENTAL REGULATIONS - HISTORY

In 1997, the Monterey County Board of Supervisors approved two regulations – an inland version and a coastal version. Vacation rental owners and managers worked hard to get these acceptable regulations passed. The inland (Title 21) regulation was put into effect but the coastal (Title 20) regulation was rejected by the Coastal Commission. At that point, the County simply let the coastal version die.

 

That left the coastal region with no applicable regulation. Furthermore, the inland regulation was administrated in an unreasonable and burdensome manner. The cost for an inland vacation rental permit is currently about $6,00.00. A few owners tried to obtain permits and found it took over a year. Permits, when approved, were highly discretionary. In one case, the County told the owner he could only rent for two weeks a year! Another was told three months. This is why most inland rental property owners do not bother to get a permit under the existing system. The County admits it has only issued about 20 permits since 1997!

 

Now the most grievous part. In spite of the fact that there is no permit to be obtained in the coastal region and no workable system to get one in the inland area, the County has started fining some owners many thousands of dollars.

For a history of the County's inconsistent behavior, poor policy, and inaction regarding short-term rentals, click here.

 

Our sister counties, San Luis Obispo and Santa Cruz, legalized vacation rentals and created regulations with a one-time permit fee of only $250-$450. If they can do this, then so can Monterey County.  We need a countywide ordinance that makes it easy and practical for Monterey County property owners to sign up and participate.

New County Short-Term Rental Ordinance Under Development


The County has shown its desire to create a new County-wide ordinance that would permit short-term rentals with rules and restrictions. In early 2015 County Supervisor Dave Potter scheduled a series of working sessions involving owners, property managers, and neighbors. Supervisor Potter stated the meetings were not to debate whether there will be an ordinance but rather to develop an ordinance. MCVRA represented your interests in these meetings and attempted to reach consensus on the terms of an ordinance. See Pine Cone coverage. We have proposed to the County the language for a fair ordinance that will permit short-term rentals but protect neighborhoods with enforceable rules. See Proposed Ordinance. Finally in July 2016, the Monterey County Planning Commission directed the County staff to develop an STR ordinance.


Planning Commission Workshop Summary

May 31, 2017

This is a summary of the May 31, 2017 Planning Commission hearing on the preliminary draft short-term rental (STR) ordinance. This hearing was a continuation of the May 10 hearing on the same draft ordinance. This draft ordinance is intended for all unincorporated areas of the County except Big Sur. STRs in Big Sur will be dealt with as a part of a proposed revised Big Sur land use plan (LUP).


The preliminary draft ordinance defines 6 categories of STRs depending upon owner present during the rental, sewer versus septic tank, whole house or room only, and rental frequency. Click here for a copy of this preliminary draft ordinance.


MCVRA continues to be encouraged after this hearing as we were coming out of the prior May 10th hearing. We had an effective number of STR owners and property managers at the hearing. There were no members of the opposition from Big Sur at this hearing. There were just a handful of opponents in attendance from Carmel Highlands and Carmel Valley.


The biggest change since the May 10th hearing was septic system requirements for properties not on a sewer system. At and after the May 10th hearing, MCVRA challenged the requirement that STRs would be required to have a dual leach field system. This would have been very expensive for many owners in the unincorporated areas of the County. This dual leach field requirement has now been dropped by the County Health Department.


The proposed permitting process for STRs on private roads is still up for discussion. County staff referenced the Proof of Access ordinance as the proposed method to consider permit requests from STR owners on private roads. The Proof of Access ordinance allows a single owner on a private road to object and cause a permit not to be granted. This ordinance has been enacted in the non-coastal zone. However, the Proof of Access ordinance does NOT apply to coastal zone since this ordinance was rejected by the Coastal Commission. The Planning Commissioners seems not to be aware of this. MCVRA will make this clear to County staff and Planning Commissioners.


The biggest issue in the draft ordinance for the majority of STR owners is the proposed expensive, discretionary land use permitting method. This, as proposed, would only apply to STRs where no owner or manager is present during a rental and the frequency of rental is unlimited. Sixty percent (60%) of all STRs in the local area are non-owner present and rent for unlimited number of nights per year. This is Type 3(c) in the draft ordinance. The draft proposes to require a land use permit costing about $6,000 and would be granted on a discretionary basis. MCVRA strongly pointed out that these terms are exactly what caused the 20 year old inland ordinance to fail. We strongly requested a simple licensing system as Pacific Grove has done. Comments made by the Commissioners appeared to confirm that they understood. Commissioners Getzelman, Rochester and Roberts clearly understood but Commissioners Diehl and Vandervere still favor discretionary permits with lots of reviews. MCVRA will continue to point out that an ordinance will fail to be effective if it includes expensive, discretionary permitting requirements. We want a business licensing approach as Pacific Grove has done.


There continues to be a belief by some Planning Commissioners that STRs impact affordable housing even though MCVRA has tried repeatedly to dispel that belief. This belief will no doubt affect STR density limits that will be part of the next revision to the draft ordinance. MCVRA will continue to point out that STRs do NOT impact affordable housing. Mark Brodeur, Pacific Grove’s Director of Economic and Community Development, concluded that STRs do not impact affordable housing. See Mr. Brodeur’s memorandum. This will help convince some Planning Commissioners.


The hearing concluded with no specific decisions or directions from the Planning Commission. The subject will be continued to June 28. For media coverage of the hearing see the Herald article. In order to make progress, the Commissioners asked County staff to segment the ordinance review process. We can expect that in the next meeting, each topic (Level of Review, STR Types, Permit Process, Density Limits, etc.) will be taken separately, decided upon, and then followed by the next. At that hearing we expect to see the County staff ask very specific yes/no questions of the Commission. The most significant question will be land use permitting versus business licensing. Another question will likely be discretionary permitting versus predictable ministerial permitting. MCVRA will continue to strongly resist problematic, expensive discretionary permitting.

Big Sur

Opponents to short-term rentals in Big Sur believe these rentals violate the Big Sur Land Use Plan (LUP) and that Big Sur should be excluded from any future County ordinance which may permit such rentals.

Attorney Gary Patton, a land use expert, did an analysis of the Big Sur LUP. He finds the LUP language actually would encourage short-term rentals in the Big Sur Land Use Planning Area. Click here for his analysis.  

Click here for a Carmel Pine Cone Article.  Any changes to the Big Sur LUP that might limit or prohibit short-term rentals would have to be reviewed and approved by the County of Monterey and since Big Sur is in the coastal zone, by the California Coastal Commission.

Sonoma County Ordinance Is Working

A fair short-term rental ordinance is the solution - visitors are served, transient occupancy taxes are paid, and neighbors are protected.  See Sonoma County Ordinance results.  Monterey County should take notice.

PETITION FOR A FAIR COUNTY ORDINANCE

Show your support for short-term vacation rentals.  Sign this petition to show the County Board of Supervisors that you want an effective short-term vacation rental ordinance. Please sign this petition and ask all your Monterey County friends, neighbors and colleagues to sign as well. To sign this petition, click on Petition for a Fair Ordinance.

PRIVATE ROADS – PROOF OF ACCESS

MCVRA along with the architects' and realtors' associations worked with the County Planning Department to create a Proof of Access ordinance affecting private roads. On August 26, 2014 the County Board of Supervisors approved two Proof of Access ordinances.  The ordinances are not everything we hoped for.  If your vacation rental is on a private road, including a private road owned and managed by a homeowners association, these ordinances may affect you when you apply for a vacation rental permit in the future.  You will need to establish that you and your guests have the right of access. The County will rely on written agreements such as a private road agreement, a private road maintenance agreement, or your homeowner’s association governing documentation.  These, if they exist, may establish your right of access.  If vacation rental use conflicts with these documents or if no documentation exists, you must get written concurrence of every easement holder on the road.  Click here for a link to the ordinances. The inland version was adopted; the coastal version was submitted to the Coastal Commission but rejected and has not been implemented in the coastal zone. If your vacation rental is on a private road, we suggest you contact MCVRA before applying for a vacation rental permit.

Register and Pay Monterey County Transient Occupancy Tax (TOT) Now!

If your vacation rental is in an unincorporated area of Monterey County and if you have not been paying TOT, this is for you.  Using your advertising, the County Tax Collector will notify you to register and pay TOT.   MCVRA strongly encourages every short-term rental owner/operator to pay TOT.  A history of TOT payments may be critical to your future right to conduct your short-term rental business when the County enacts new regulations. Click here for how to proceed.