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Folsom, CA

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STR Regulations for Folsom, California

Overview: Are Short-Term Rentals Allowed in Folsom, CA?

Yes, short-term rentals are explicitly allowed in Folsom, California, subject to specific regulations and compliance requirements. The City of Folsom permits vacation rentals (including those operated through platforms like Airbnb, Vrbo, and Vacasa) as long as operators strictly adhere to all applicable local laws, zoning requirements, and tax obligations.

A short-term rental in Folsom is defined as a furnished apartment, house, or condominium rented on a temporary basis for less than 30 days. The city has established a comprehensive regulatory framework that includes business licensing, occupancy limits, tax collection, and zoning compliance to ensure STR operations remain compatible with residential neighborhoods.

What do Airbnb hosts actually earn in Folsom?

Folsom hosts earn a median $44,655/year with $231 ADR and 69% occupancy.

Top performers pull in $58,966+ per year.

See the full Folsom market breakdown

How to Start a Short-Term Rental Business in Folsom

Step-by-Step Process:

  1. Property Assessment and Compliance Verification

    • Confirm your property meets zoning requirements for vacation rentals
    • Verify compliance with homeowners' association (HOA) or covenant, condition, and restriction (CC&R) rules if applicable
    • Assess whether your property qualifies as an accessory use to your primary residence

  2. Business License Application

    • Obtain a City Business License Certificate before operating
    • Application available through the City's Finance Department

  3. TOT Registration and Certificate

    • Register for Transient Occupancy Tax collection
    • Obtain TOT certificate to legally collect taxes from guests
    • Partner with platforms like Airbnb to include TOT as a line item

  4. Ongoing Compliance Setup

    • Establish systems for quarterly TOT remittance
    • Implement guest management protocols to ensure compliance with occupancy limits
    • Develop standard operating procedures for property management

Required Documents, Permits, Licenses, and Guidelines

Mandatory Requirements:

Business License Certificate

  • Required under Folsom Municipal Code Chapter 5.04
  • Application through City Finance Department
  • Must be obtained before commencing operations

Transient Occupancy Tax (TOT) Certificate

  • 8% tax rate on gross rental income
  • Registration required for tax collection
  • Quarterly remittance obligations
  • Certificate does not authorize unlawful business operations

Short-Term Rental Permit (if operating in unincorporated areas)

  • For properties outside city limits but within Sacramento County
  • Application through RentalScape platform
  • Combined permit and business license fee: $452.66 (nonrefundable)
  • Annual renewal required through same platform

Zoning and Use Permits:

Conditional Use Permit

  • Required for vacation rentals hosting large groups or special events
  • Applies to weddings, receptions, fundraisers, and similar gatherings
  • Must comply with Bed & Breakfast Inn requirements under FMC Chapter 17.27

Documentation Requirements:

Property Documentation

  • Proof of ownership or legal right to operate
  • Compliance verification with zoning codes
  • HOA/CC&R compliance confirmation where applicable

Tax Compliance Records

  • Guest registration and rental period tracking
  • Quarterly TOT remittance records
  • Platform reporting for tax collection

Specific Regulations for Short-Term Rentals

City of Folsom Regulations:

Occupancy Limits

  • Maximum of three (3) paying guests per dwelling
  • Applies regardless of property size or configuration
  • Enforced under FMC Section 17.58.050

Accessory Dwelling Unit (ADU) Restrictions

  • ADUs are explicitly prohibited as vacation rentals
  • Covers both new and existing ADUs
  • Enforced under FMC Section 17.105.140J

Tax Obligations

  • 8% Transient Occupancy Tax on gross rental income
  • Quarterly remittance to City through HdL Companies
  • Tax collection typically passed to guests through platform integration

Business Operations

  • Must maintain accessory use status (cannot become primary use)
  • Subject to neighborhood compatibility standards
  • Required to comply with all applicable building and safety codes

Sacramento County Regulations (for unincorporated areas):

Eligibility Requirements

  • Property owner or long-term renter must live on property minimum 6 months annually
  • Must remain accessory use to primary residence
  • ADUs constructed after January 1, 2020, cannot be used for STRs

Permit Standards

  • Short-Term Rental Permit required in addition to business license
  • Operating conditions to mitigate negative neighborhood impacts
  • Compatibility requirements with surrounding properties

Application Process

  • Online application through RentalScape platform only
  • No in-person, mail, fax, or email applications accepted
  • Comprehensive review process before permit issuance

State-Level Considerations:

California Short-Term Rental Laws

  • Must comply with all state health and safety regulations
  • Subject to local jurisdiction authority over land use
  • Platform collection agreements for tax remittance

ADA and Accessibility Requirements

  • Properties must meet Americans with Disabilities Act standards where applicable
  • Reasonable accommodations for guests with disabilities

Contact Information for Local Authorities

City of Folsom - Short-Term Rentals:

Finance Department - TOT Administration

  • Phone: (916) 235-9984
  • Email: FolsomTOT@hdlgov.com
  • HdL Companies Partnership: City of Folsom TOT administration partner
  • Address:
    • City of Folsom
    • C/O HdL Support Center
    • 8839 N Cedar Ave #212
    • Fresno, CA 93720
  • Hours: Monday - Friday, 8 a.m. - 5 p.m.
  • Website: folsom.hdlgov.com/

City of Folsom - General Contact

Sacramento County - Unincorporated Areas:

Planning and Environmental Review (PER) Department

Additional Resources:

Code Enforcement

  • Phone: (916) 461-6000 (City of Folsom)
  • Reporting: Available through City website
  • Violations: Subject to municipal code enforcement procedures

Links to Source Pages

City of Folsom Official Resources:

Sacramento County Resources:

Important Notes for Investors:

Upcoming Regulatory Changes: The City of Folsom is currently updating zoning codes with new vacation rental regulations anticipated for adoption in mid-2026. Investors should monitor the Zoning Code Update page for changes that may affect operations.

Non-Compliance Consequences: Operating without proper licenses, permits, or in violation of municipal codes can result in fines, permit revocation, and legal action. The TOT certificate explicitly does not authorize unlawful business operations.

Platform Integration: Most major STR platforms (Airbnb, Vrbo, etc.) have systems in place to collect and remit the 8% TOT directly, simplifying compliance for operators who properly configure their listings.

This comprehensive regulatory framework positions Folsom as a moderately regulated market for short-term rental investments, with clear pathways for compliant operations and defined consequences for non-compliance. Investors should carefully review all requirements before purchasing or converting properties for STR use.

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Folsom

Market Saturation Score

036912
Mild Saturation
2/ 12
months with declining YoY revenue
2–4 declining months: early saturation pressure - watch for trend persistence.
View Full Folsom Market Analysis

Photos of Folsom

Overview of Folsom

Folsom is a city of roughly 80,000 residents in Sacramento County, California, situated at the meeting point of the Sacramento Valley and the western foothills of the Sierra Nevada. Often described as having a "small-town" feel despite its size, Folsom is best known for its outdoor recreation, its well-preserved historic district along Sutter Street, and its long-standing association with the nearby Folsom State Prison. The city sits about 20 miles northeast of downtown Sacramento, a short drive up U.S. Highway 50, and serves as a convenient gateway to Sierra Nevada destinations like Lake Tahoe, Placerville, and the Eldorado National Forest, all of which lie within a couple of hours by car.

One of the biggest draws in the area is Folsom Lake State Recreation Area, a sprawling reservoir and park system that wraps around the city's western edge. Just minutes from downtown Folsom, the lake offers swimming, kayaking, paddleboarding, sailing, and houseboating during the warmer months, along with miles of biking and hiking trails that connect into the broader American River Parkway. The recreation area is a major weekend destination for Sacramento-area residents and visitors heading into the foothills, which gives the city steady year-round foot traffic.

Downtown Folsom centers on the Historic Folsom District along Sutter Street, where preserved Gold Rush-era brick buildings now house a dense mix of locally owned restaurants, tasting rooms, antique shops, and live-music venues. The district is walkable, lively on weekends, and anchors much of the city's dining and nightlife scene, making it a natural focal point for visitors who want a pedestrian-friendly experience without leaving town. The adjacent American River and Johnny Cash Bridge area adds another layer of interest, with a paved trail system linking the historic core to the river corridor.

Just northwest of the city lies Folsom State Prison, one of the oldest correctional facilities in California and a fixture of American popular culture thanks to Johnny Cash's 1955 live album recorded there. While the prison itself is not open to the public, the nearby Johnny Cash Trail and the Folsom Dam overlook give visitors a way to engage with that history while enjoying river and reservoir views. The Folsom Dam, a major component of the Central Valley Project, is itself a recognizable landmark and a popular spot for short walks and sightseeing.

Taken together, Folsom offers short-term rental operators a rare combination: a safe, well-amenitized foothill city with its own walkable historic core and a major recreation area at its doorstep, plus easy same-day access to Sacramento and the broader Sierra Nevada. That mix of small-city livability and outdoor access tends to attract both leisure travelers and visiting families, supporting a rental market that performs well across weekend getaways, summer lake season, and shoulder-season hiking visits alike.

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