Overview and bottom line on legality

• Are short‑term rentals allowed in San Carlos? Yes, STRs are not categorically prohibited. However, the city has not adopted a local STR permit or ordinance; therefore, STRs operate under the city’s general zoning and municipal codes. The critical caveat: under San Carlos SB 9 Urban Infill Unit rules, newly created SB 9 units may not be used as STRs for fewer than 30 days (see “SB 9 Special Restrictions” below).
• Practically, investors must treat any STR activity as a lawful “lodging” use only where the underlying zoning permits lodging/hospitality uses (e.g., traditional Bed & Breakfast rules exist for single‑unit dwellings), or if the property otherwise qualifies as a legal residential dwelling in a zone that allows such activity. This point is not explicitly spelled out in the city’s publicly posted municipal code pages for STRs, so property‑specific zoning verification is essential.

How to start a short‑term rental business in this market

1. Confirm zoning and land-use eligibility

   • Confirm the subject property is in an appropriate zoning district for lodging uses. San Carlos offers a Bed & Breakfast (B&B) framework for single‑unit dwellings (max two rooms; see code details below). For other STR formats, use the city’s “Find My Zoning” GIS portal to verify base district and overlay constraints before proceeding.
   • Check whether the property or unit type is affected by SB 9. If the unit (or any portion of the site) was created or subdivided under SB 9 (Urban Infill Units), it cannot be operated as a short‑term rental for stays less than 30 days. Additionally, if an SB 9 lot split was used, an owner‑occupancy affidavit for at least three years applies.

2. Complete pre‑application due diligence

   • If the parcel is in the Coastal Zone (San Mateo County unincorporated area), different rules apply; for San Carlos proper, the Coastal Zone STR permit does not apply.
   • Verify parking availability and neighborhood compatibility. San Carlos has general parking and site‑design standards; investors should design operations to avoid double‑parking, excessive traffic, or other impacts to adjacent residential uses.
   • Review municipal code sections likely to be implicated:
     • Bed & Breakfast lodging standards (Section 18.23.070).
     • Home Occupations (Section 18.23.120) to ensure any hospitality operation does not unintentionally become a “home occupation.”
     • General site and parking regulations (e.g., Chapter 18.20 referenced by other sections, and Chapter 18.15 General Site Regulations) via the Municipal Code portal.

3. Obtain permits and business authorizations

   • Business license/registration: San Carlos requires an annual business license. Submit via the city’s Permit Portal and complete Finance/Audit requirements. Business license questions are addressed through City Hall administration.
   • Zoning clearance or other planning permits: Bed & Breakfasts are covered by code and may require a zoning clearance and/or a minor use permit (for additional rooms beyond two). For non‑B&B STRs, confirm whether any zoning clearance or other planning authorization is needed for lodging operations in the identified zone.
   • Safety and life safety compliance: Although the provided pages do not enumerate STR‑specific life safety requirements, you must follow applicable building, fire, and electrical codes for any residential occupancy used for lodging. Coordinate with the Building Division for permits if you install or modify systems (e.g., separate entrances, kitchenettes, alarms).

4. Collect and remit taxes

   • Transient Occupancy Tax (TOT): California law authorizes cities to levy TOT on short‑term rentals. The provided pages do not explicitly list San Carlos’s TOT status or rate. You should verify TOT applicability and registration with the Finance Department (Revenue Services). If TOT applies, obtain a TOT certificate and remit taxes for each occupied night.
   • Sales tax: Lodging may also have state sales tax implications. Confirm registration requirements with the California Department of Tax and Fee Administration (CDTFA).

5. Finalize operational setup

   • Adopt house rules and management protocols consistent with local noise, parking, and nuisance standards (e.g., limit occupancy, minimize neighborhood impacts, respond promptly to complaints).
   • For advertised occupancy limits, consider aligning with regional norms where useful. For reference, San Mateo County Coastal Zone STR rules cap occupancy at “two persons per bedroom plus two additional persons” (children under 12 not counted); this is only a regional comparator and not a San Carlos requirement.
   • If an owner‑occupancy affidavit applies (SB 9 lot split), retain it with your records and maintain compliance for the required period.

6. Launch and ongoing compliance

   • Keep current business license/registration and TOT remittances (if applicable).
   • Maintain life safety systems and documentation. Be prepared to respond to code enforcement inquiries.

Required documents, permits, licenses, and guidelines

• Annual Business License/Registration (City of San Carlos)
  • Filed online via the Permit Portal; coordinate any supporting documentation with the Planning Division if a zoning clearance or use permit is required.
• Zoning Clearance or Use Permit (as applicable)
  • Bed & Breakfast: Up to two rooms permitted by code; additional rooms require approval (minor use permit). Exterior changes that alter the single‑unit character are prohibited.
  • STRs other than B&B: Confirm whether any city authorization is required for lodging operations in the identified zoning district.
• TOT Certificate (if applicable)
  • Obtain and maintain proof of TOT registration with Finance/Revenue Services; remit per applicable schedule.
• Building/Permit Compliance (as applicable)
  • Comply with Building, Fire, and Electrical Codes for lodging occupancy. If you modify entrances, kitchens, or safety systems, secure the necessary permits and inspections.

San Carlos Bed & Breakfast (lodging) standards (Section 18.23.070)

• Must be in a single‑unit dwelling.
• No more than two rooms may be rented; additional rooms require a minor use permit.
• Exterior appearance may not be altered from the original single‑unit character.
• Meals and rental of bedrooms limited to registered guests; separate or additional kitchens for guests are prohibited.

Specific regulations and constraints (San Carlos, County, State)

• San Carlos municipal code
  • No citywide STR ordinance is posted in the provided pages. STR activity must align with base zoning and general municipal standards.
  • Bed & Breakfast standards (Section 18.23.070) apply when operating a B&B in a single‑unit dwelling.
  • Home Occupations standards (Section 18.23.120) may be relevant if the operation resembles a home‑based business rather than an independent lodging use.
  • General site, parking, and design standards (e.g., Chapters 18.15 and 18.20; also Section 18.23.310 for SB 9) inform compliance and site design.
• SB 9 Urban Infill Unit prohibition (Section 18.23.310)
  • Units created under SB 9 may not be used for short‑term rentals of less than 30 days.
  • If a lot split is pursued, the owner must sign an affidavit indicating they will live on the property for a minimum of three years.
  • No flag lots; minimum lot sizes and objective design standards apply.
• San Mateo County (Coastal Zone, unincorporated)
  • If your property is within the unincorporated Coastal Zone (outside San Carlos city limits), you must obtain a Short‑Term Rental Permit from the County. County rules prohibit STR use of Accessory Dwelling Units (ADUs), limit rentals to 180 nights per year, set occupancy limits, require on‑site parking, and mandate a local contact person within 20 miles. TOT registration is required.
• State of California
  • AB 3182 (2020) limits local governments’ ability to impose certain restrictions on STRs in residentially zoned areas (e.g., caps on rental days, owner‑occupancy mandates, permit/eligibility requirements). This sets a baseline for what municipalities can regulate.
  • TOT authorization exists under state law; confirm the local San Carlos TOT status and rate with the Finance Department.
  • State building, fire, health, and safety codes apply to any residential lodging activity.

SB 9 special restrictions (San Carlos Section 18.23.310)

• Prohibited: STRs for fewer than 30 days in any SB 9 Urban Infill Unit (or SB 9 lot created unit).
• Owner‑occupancy affidavit required for lot splits for a minimum of three years.
• Objective design standards, lot size minimums (e.g., 1,200 square feet; 40%–60% split), and no flag lots apply to any SB 9 subdivision or development.

San Mateo County Coastal Zone STR rules (unincorporated; for reference only)

• Permit required; online application through the County’s Accela portal.
• ADUs may not be used as STRs.
• STRs limited to 180 nights per calendar year.
• Occupancy: two persons per bedroom plus two additional persons (children under 12 not counted).
• Parking: at least one on‑site space (garage, driveway, or other on‑site parking). If occupancy exceeds eight, at least two on‑site spaces are required.
• Local contact person required within 20 miles, available at all times during occupancy.
• TOT certificate required.

Contact information (San Carlos and relevant county contacts)

• San Carlos Planning Division (zoning, use permits, SB 9/Urban Infill Units)
  • Phone: 650‑802‑4263
  • Email: planning@cityofsancarlos.org
  • Permit/ Licensing Portal: sancarlosca-energovweb.tylerhost.net/apps/selfservice#/home
  • GIS Zoning Portal: gis.cityofsancarlos.org/auth/disclaimer
  • Address: 600 Elm Street, San Carlos, CA 94070
• San Carlos Business Licensing/Finance
  • Use the Permit Portal for business license/registration and contact City Hall administration for Finance/Revenue questions (e.g., TOT applicability).
• San Mateo County Planning (Coastal Zone STRs)
  • Website: www.smcgov.org/planning/short-term-rental-permit-coastal-zone
  • Address and phone available via the County Planning website
  • Online application: aca-prod.accela.com/smcgov/Welcome.aspx

Important: source links for further review

• San Carlos Municipal Code – Chapter 18.23 (Standards for Specific Uses and Activities) – includes Bed & Breakfast and SB 9 Urban Infill Unit rules
  • www.codepublishing.com/CA/SanCarlos/html/SanCarlos18/SanCarlos1823.html
• San Carlos – SB 9 Urban Infill Unit overview and contacts
  • www.cityofsancarlos.org/city_hall/departments_and_divisions/community_development/planning/building_an_urban_infill_unit_sb_9.php
• San Mateo County – Short‑Term Rental (Coastal Zone) permit page
  • www.smcgov.org/planning/short-term-rental-permit-coastal-zone
• San Carlos Permit/ Licensing Portal
  • sancarlosca-energovweb.tylerhost.net/apps/selfservice#/home
• San Carlos GIS Zoning (“Find My Zoning”) Portal
  • gis.cityofsancarlos.org/auth/disclaimer

Practical guidance for investors

• Clarify zoning first. If the property is zoned for single‑family or multifamily residential and not subject to SB 9 constraints, a compliant lodging operation (e.g., a B&B) can be viable. For other STR structures, confirm whether a zoning clearance or other planning authorization is needed.
• Avoid SB 9 units for STRs. If you are pursuing SB 9 development, understand that operating those units for stays under 30 days is prohibited.
• Align with municipal codes on appearance, parking, and neighborhood impact. Even in the absence of an STR‑specific ordinance, standards around noise, traffic, and site design still govern operations.
• Verify taxes. Contact the Finance Department to confirm whether San Carlos imposes TOT on STRs and register accordingly. If you operate in the unincorporated Coastal Zone, you must comply with County STR permit rules and TOT.
• Maintain compliance. Keep permits, licenses, and (if applicable) TOT certificates current; respond promptly to neighbor concerns and city inquiries to minimize enforcement risk.

Note on gaps and verification

• The provided sources do not explicitly confirm whether San Carlos imposes TOT or provide a definitive list of STR‑specific permits for non‑B&B lodging uses. Contact the Finance Department to confirm TOT requirements and the Planning Division to confirm whether any zoning clearance or use permit is required for your proposed STR model in the identified zoning district.