Regulation by Local Cities in Monterey County
WHAT REGULATION(S) AFFECT YOUR VACATION RENTAL?
If your STR is in an incorporated city, Monterey County regulations do not apply. Cities enact their own regulation which varies considerably from town to town.
Carmel-by-the-Sea is cracking down on short-term rentals. See the Monterey County Weekly article dated December 15, 2106. The town has also contracted with Host Compliance to scour the internet looking for violations. Ignoring Carmel's ban can result in very large fines! One owner settled with the town for $25,000 after facing an even larger amount. See Carmel settles short-term rental lawsuit while announcing amnesty period for other scofflaws.
Since 2010, Pacific Grove has had an STR ordinance allowing homeowners to get an annual STR license to rent for fewer than 30 days a month. The current version of the ordinance caps the total STR licenses at 250, limits licenses to no more than 15% of the homes per block, and restricts homes whose boundaries are within 55 feet of each other from both being licensed. See https://www.strongpg.com/about.
In 2017, when the City Council decided to combine STR licenses that operated year-round with licenses that only operated 90 days out of the year--bringing the total number of licenses up to 289--and notifying every homeowner within 300 feet of a licensed STR, pandemonium ensued. The combination of an inflated 289 licenses and 25,000 individual notices prompted PG residents to call for a ban on the entire program. In response, City Council adopted the 15% density limit per block, the 55-foot "Zone of Exclusion, and a Lottery to thin the herd.
At December 2017 Community meeting, an overwhelming number of STR owners showed up to convince the Council that attrition could reduce the cap to the desired 250. Council agreed to hold the Lottery in abeyance until March 31, 3018, the start of the annual license renewal period. However, Council changed their mind in February, 2018, and initiated plans to hold the Lottery.
As of March 31, 2018, only 256 STR licenses were renewed. A group of Pacific Grove STR owners called STRONGpg sued the city asking for an injunction to stop the Lottery. See STR owners sue city. Stating that STR owners had no right to expect their licenses to be renewed, the court ruled against an injunction. See P.G. lottery will move forward.
The Lottery indiscriminately eliminated 51 STR licenses, far more than the City Council or Staff had anticipated. Two schoolteachers lost their license. So did a local family whose ex-army father is handicapped. Ditto for the family who uses the income to support a bedridden sister with multiple sclerosis. Owners with pages of complaints lodged against their rental got to keep their license. Owners without a single complaint lost theirs. Newcomers to the STR program kept their license. Old timers lost theirs. Properties losing their licenses will be given a one-year “sunset period” (until April 30, 2019) to cease short-term rentals. See Lottery leads to disappointed owners. A lawsuit challenging the lottery has been filed. See San Francisco Chronicle and also Stopping a City from Raffling Off Property Rights.
We are deeply saddened that PG Council’s radical measures to appease the anti-STR contingent will hurt so many homeowners as well as the local labor force that helps maintain these homes. The City’s budget will also take a hit at a time of looming pension obligations and upcoming capital expenditures on infrastructure improvements like sewers, roads, street lights, and children’s programs like youth recreation, baseball fields, and playgrounds. City Staff will be calculating the loss of Transient Occupancy Tax (TOT) from the 51 STRs, estimated at several hundred thousand dollars.
But it got much worse! A group of Pacific Grove opponents obtained enough verified signatures to put Measure M, a complete ban on STRs in all but the coastal zone and commercial areas, on the November 2018 ballot. On November 6, 2018 Pacific Grove voters chose to give up property rights by passing Measure M. Despite the fact that each of them could be only a divorce, a medical event, or a job loss away from needing to rent their homes, Pacific Grove voters chose to limit STRs to the commercial and coastal zones. See Monterey County Weekly. Homeowners operating an STR in Pacific Grove without a license are subject to very large fines. See Carmel Pine Cone article.
Del Rey Oaks
On May 22, 2018 the Del Rey Oaks City Council unanimously approved what is the most permissive short-term rental ordinance on the Monterey Peninsula. The ordinance puts no cap on either hosted or un-hosted rentals. See A small city bucks a regional trend and allows short-term rentals with few restrictions.
The Marina Planning Commission brought a complex draft ordinance to the City Council in April 2019. MCVRA opposed the ordinance because it banned all non-hosted STRs and limited STRs to 10% of the homes on a block with the calculation rounding down to the nearest whole number. Thus, a block with 9 homes could not have allowed a single STR. We supported local owners to successfully send the ordinance back to the planning department to simplify it and to allow non-hosted STRs. This may reappear before the City Council about August 2019.