Overview: Are Short-Term Rentals Allowed in Santa Cruz?

Short-term rentals are explicitly allowed in Santa Cruz, California, but with significant restrictions and requirements. The City of Santa Cruz permits short-term rentals through a regulated permit system, while Santa Cruz County (unincorporated areas) has its own separate regulations. Investors must understand that regulations differ between the incorporated city limits and unincorporated county areas. The City of Santa Cruz operates under a Residential STR Ordinance (Chapter 24.12, Part 18) that restricts new permits, focusing on owner-occupied "hosted" rentals, while the County allows both "vacation rentals" and "hosted rentals" with different requirements and caps.

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How to Start a Short-Term Rental Business in Santa Cruz

City of Santa Cruz (Incorporated Areas)

Hosted STR Permits (Currently Available):

• Apply online through the City's TOT system at tot.cityofsantacruz.com/primeweb
• Must live in the home for more than 6 months per year
• For multi-family properties, owner must live in one unit while renting another
• 250 total hosted STR permits available on first-come, first-served basis
• No waitlist currently exists for hosted permits

Non-Hosted STR Permits (Not Currently Available):

• City is not issuing new non-hosted/non-owner occupied STR permits
• Existing legally permitted non-hosted STRs may continue operating
• Properties with single-family homes and ADUs are ineligible for STR permits

Santa Cruz County (Unincorporated Areas)

Vacation Rental Permits:

• Entire home rental for stays under 30 days
• Requires Vacation Rental Permit per County Code Section 13.10.694
• Allowed in single-family homes, duplexes, or triplexes
• No county-wide permit cap, but beachfront areas have specific limits

Hosted Rental Permits:

• Rental of 1-2 bedrooms where owner stays on-site
• Requires Hosted Rental Permit per County Code Section 13.10.690
• County-wide cap of 250 hosted rental permits
• Permits valid for five years

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Required Documents, Permits, Licenses, and Guidelines

City of Santa Cruz Requirements

STR Permit Application Requirements:

1. Site Plan - Show all buildings, parking locations and dimensions (must meet minimum parking: 1 space for studio/1-bedroom, 2 spaces for 2+ bedrooms)
2. Floor Plan - Show all walls, room labels, indicate STR areas
3. Color Photograph - Exterior photo with visible building address number
4. Three Proofs of Principal Residency:
   • Santa Cruz County Assessor's Homeowners Exemption
   • Two additional forms (tax returns, bank statements, driver's license, voter registration, utility bills)

Additional Requirements:

• STR permit fee (non-refundable, amount in Planning Fee Schedule)
• Transient Occupancy Tax (TOT) Certificate
• Enrollment in City's Rental Inspection Service (RIS)
• Annual RIS fee payment

Santa Cruz County Requirements

Hosted Rental Permit Application:

1. Hosted Rental Application Form (PLG155)
2. Transient Occupancy Tax certificate or signed application from County Tax Collector
3. Copy of rental/lease agreement or House Rules (for online platforms)
4. Non-refundable application fee of $149.60

Vacation Rental Permit Application:

1. Vacation Rental Application Form
2. TOT certificate
3. House Rules including minimum requirements
4. Application fees vary by review level

House Rules Must Include:

• Rental age requirements
• Maximum number of guests
• Vehicle limits
• Noise restrictions
• Food/cooking requirements
• Pet policies
• Prohibited events
• Trash management protocols
• Emergency evacuation instructions

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Specific Regulations by Jurisdiction

City of Santa Cruz Municipal Regulations

Property Type Restrictions:

• Multi-family properties may be eligible for STR permits
• Properties with single-family homes AND ADUs are prohibited from STR permits
• Existing legally-operating ADU STRs are grandfathered

Parking Requirements:

• Must meet full compliance with current minimum parking requirements
• 1 space per studio/1-bedroom residence
• 2 spaces per residence with 2+ bedrooms

Application Review Process:

• 30 calendar days for initial review
• Additional 30-day cycles for resubmissions
• Floor plans and site plans reviewed for unpermitted construction
• Life-safety hazards referred to code compliance

Business License Requirement:

• Not required unless more than 3 dwellings on parcel
• Contact Revenue Division at 831-420-5070 for clarification

Santa Cruz County Regulations

Beachfront Neighborhood Caps:

• Live Oak and Seacliff/Aptos Designated Areas: 15% of total parcels may have STR permits
• Davenport/Swanton Designated Area: 10% of total parcels may have STR permits
• 20% limit per block face in these areas

Guest Limits:

• Vacation rentals: 2 overnight guests per bedroom plus 2 additional
• Daytime guests: Twice the number of overnight guests
• Hosted rentals: 3 guests per hosted bedroom

Dwelling Type Restrictions:

• STRs allowed in all residential zone districts
• NOT allowed in accessory structures, ADUs, affordable housing, balconies, porches, sheds, tents, RVs

Review Requirements:

• Vacation rentals with <4 bedrooms: Level IV review (public notice)
• Vacation rentals with 4+ bedrooms: Level V review (Zoning Administrator hearing)

California State-Level Regulations

Transient Occupancy Tax:

• Santa Cruz County imposes 11% TOT on short-term rentals
• Airbnb collects and remits TOT for unincorporated county areas
• Hosts must complete TOT application with County Tax Collector

General State Framework:

• Short-term rentals defined as stays under 30 days
• Local municipalities retain authority to regulate STRs
• Platform operators must comply with local regulations

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Contact Information

City of Santa Cruz

Planning Department:

• Contact: John Jezek, Associate Planner
• Email: jjezek@santacruzca.gov
• Phone: (831) 420-5305
• Address: 809 Center Street, Room 101, Santa Cruz, CA 95060
• Walk-in Hours: Monday-Thursday, 7:30-11:30 a.m.

Transient Occupancy Tax Questions:

• Revenue Division: (831) 420-5070
• Website: santacruzca.gov/Government/City-Departments/Finance/Licenses-Fees-and-Taxes

Code Compliance:

• Website: santacruzca.gov/Government/City-Departments/Planning-and-Community-Development/Code-Compliance

Santa Cruz County

Planning Department:

• Email: Planning.ZoningInfo@santacruzcounty.us
• Phone: (831) 454-2130 (Zoning Information Line)
• Address: 701 Ocean Street, 4th Floor, Santa Cruz, CA 95060
• Switchboard: (831) 454-2580

Hosted Rental Applications:

• Email: vacation.eplanreview@santacruzcountyca.gov
• Online Portal: scceplanreview.santacruzcounty.us

Tax Collector:

• Phone: (831) 454-2510
• Email: ttc.webmail@santacruzcountyca.gov
• Website: co.santa-cruz.ca.us/Departments/TaxCollector/TransientOccupancyTaxandTourismMarketingDistrict.aspx

Wait List Information:

• Email: vacation.eplanreview@santacruzcountyca.gov
• Fee: $145.00 annual wait list fee
• Review Dates: June 1st and December 1st

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Source Links

Official Government Sources

City of Santa Cruz:

• Short-Term Rentals: www.santacruzca.gov/Government/City-Departments/Planning-and-Community-Development/Short-Term-Rentals
• Municipal Code Chapter 24.12: www.codepublishing.com/CA/SantaCruz/#!/SantaCruz24/SantaCruz2412.html#24.12.1700
• TOT Application: tot.cityofsantacruz.com/primeweb
• STR Search: permitting.cityofsantacruz.com/ETRAKIT3/Search/project.aspx

Santa Cruz County:

• Hosted Rentals: cdi.santacruzcountyca.gov/UPC/DiscretionaryPermitsZoning/DiscretionaryPermits/HostedRentals.aspx
• Vacation Rentals: cdi.santacruzcountyca.gov/UPC/DiscretionaryPermitsZoning/DiscretionaryPermits/VacationRentals.aspx
• County Code Section 13.10.694: www.codepublishing.com/CA/SantaCruzCounty/#!/SantaCruzCounty13/SantaCruzCounty1310.html
• Hosted Rental Ordinance: www.sccoplanning.com/Portals/0/County/Planning/Hosted%20Rental%20Ordinance%205266.pdf
• TOT Information: www.co.santa-cruz.ca.us/Departments/TaxCollector/TransientOccupancyTaxandTourismMarketingDistrict.aspx

State Resources:

• Beach Neighborhood Maps: www.sccoplanning.com/Portals/2/County/Planning/Beach-Neighborhood-Designated-Areas.png

Additional Resources

Airbnb Guidance:

• Santa Cruz County Information: www.airbnb.ca/help/article/2359

Industry Resources:

• Coastwoods Real Estate Analysis: coastwoods.com/blog/short-term-rental-guidelines-for-the-city-of-santa-cruz

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Investment Considerations

Key Market Factors:

• City of Santa Cruz has effectively closed new non-hosted STR permits
• County unincorporated areas still offer opportunities but with caps
• Beachfront areas have additional restrictions and competition
• TOT rates are significant at 11% in county areas

Compliance Critical:

• All applications reviewed for code violations
• Life-safety issues can prevent permit issuance
• Ongoing compliance monitoring required
• Rental Inspection Service mandatory in city

Due Diligence Requirements:

• Verify property zoning and restrictions
• Confirm parking availability meets requirements
• Review HOA/CC&R restrictions if applicable
• Assess competition in specific neighborhoods
• Calculate all fees and ongoing costs

This guide provides the regulatory framework for STR investment in Santa Cruz. Given the complexity and recent changes to regulations, investors should consult directly with planning departments before making property acquisitions or investment decisions.