With the advent of AirBnB and other online property rental websites, many homeowners in Santa Cruz County, Silicon Valley and beyond have started renting out rooms or guest cottages to make extra money or help pay the mortgages or property taxes on vacation or second homes.
As of June 18, 2018, residents in Santa Cruz County must now have a permit for their short-term hosted rentals. A hosted rental is defined as a dwelling unit where the property owner or a long-term resident remains onsite during the rental of either one or two legal bedrooms in a house or guesthouse. A short-term hosted rental is for less than 30 days. It differs from a vacation rental, which is the rental of an entire home or property that is occupied for 30 days or less. The short-term hosted rental permit is valid for 5 years.
Prior to the enactment of this ordinance, Santa Cruz County residents did not have to have a permit if they rented a bedroom or guest house while still living on the property. The county established a 90-day period for preexisting owner-renters (who have been renting since at least December 5, 2017) to apply for a permit during which time there was no cap on the number of licenses issued. Applicants must meet certain documentation requirements, such as proving they’ve paid the eleven percent Transient Occupancy Tax (TOT), a copy of their rental or lease agreement in addition to the permit application and a $145 non-refundable fee. This 90-day period ends on September 17, 2018.
After this date, the permit application opens up to new renters as well as prevailing renters who didn’t apply during the first three months. These applications will be accepted on a first-come, first-served basis and only 250 permits will be issued to this group. This cap on hosted rental licenses is designed to mitigate the potential negative impacts of noise, traffic, parking, and safety that could result by having too many rentals in certain areas, disrupting the overall residential atmosphere.
Because of their popularity among tourist, there are also three beach neighborhoods that will have permit limitations. They are:
- Live Oak
Both Live Oak and the Seacliff/Aptos boroughs can have up to 15% of their total parcels as short term hosted rentals while Davenport/Swanton is limited to 10%. Each block in these neighborhoods may have at least one parcel with a short-term rental. According to this new ordinance, permits in these three locations are limited to 20% of residential use parcels per block, with specific concessions called out in the County Code.
If you live in Santa Cruz County and are an existing short-term rental host or want to start, you must obtain a permit. Since these licenses are valid for 5 years and are limited in the quantity issued, it is imperative that you fill out an application as soon as possible.