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 detailed 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.
Short-Term Rental Opponents Lash Out. Monterey County Gave Them Ammunition
The July 9, 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.
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:
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:
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:
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.
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.
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.