Scotts Valley, California Short Term Rental Regulations Guide for Airbnb hosts

Overview: Are Short-Term Rentals Allowed in Scotts Valley?

Scotts Valley has banned short-term rentals. According to multiple real estate sources referencing the city's zoning code, vacation rentals are not permitted nor conditionally permitted uses in Scotts Valley's Zoning Code. However, there appears to be some conflicting information from certain sources suggesting ongoing regulations, which may indicate either outdated information or ongoing legislative discussions about potential changes.

Key Point for Investors: If you are specifically targeting Scotts Valley for short-term rental investment, you must verify the current legal status with local authorities, as the comprehensive prohibition noted in zoning code references may be subject to change.

What do Airbnb hosts actually earn in Scotts Valley?

Scotts Valley hosts earn a median $31,842/year with $136 ADR and 91% occupancy.

Top performers pull in $40,152+ per year.

See the full Scotts Valley market breakdown

Alternative Investment Opportunities in Santa Cruz County

Since Scotts Valley proper does not allow STRs, investors should consider these nearby alternatives:

Unincorporated Santa Cruz County Areas

Live Oak Designated Area (LODA) - Currently waitlisted with 280 total permits available
Seacliff/Aptos/La Selva Beach Designated Area (SALSDA) - Waitlisted with 286 total permits
Davenport/Swanton Designated Area (DASDA) - Waitlisted with 7 total permits
Non-designated areas - Rio Del Mar and areas south of Santa Cruz Harbor to Opal Cliffs into Live Oak currently have no waitlist or primary residence restrictions

Other Cities in Santa Cruz County

Santa Cruz - 250 hosted STR permits available, non-hosted permits suspended
Capitola - VRU (Vacation Rental Use) overlay district allows STRs in designated area
Watsonville - No waitlist for permits

How to Start a Short-Term Rental Business (Outside Scotts Valley)

Step 1: Property Selection

Research zoning maps to ensure your property is in an allowed area
Verify property type eligibility (single-family, duplex, triplex for vacation rentals)
Check HOA restrictions, as many condos/townhomes prohibit short-term rentals
Confirm no ADUs are present, as properties with ADUs are typically ineligible

Step 2: Permit Application Process

For Santa Cruz County Unincorporated Areas:

Vacation Rental Permits (Entire Home)

Submit application to Santa Cruz County Planning Department
Application requires Level IV review (public notice) for homes with <4 bedrooms
Level V review (Zoning Administrator hearing) required for homes with 4+ bedrooms
Permit valid for 5 years
Applications processed at 701 Ocean Street, Santa Cruz (4th Floor)

Hosted Rental Permits (1-2 Rooms)

May be processed over the counter
Valid for 5 years
County-wide limit of 250 hosted rental permits

Step 3: Tax Registration

Obtain Transient Occupancy Tax (TOT) Certificate
Pay 11% TOT on all rental income
Complete TOT application with County Treasurer-Tax Collector
Note: Airbnb collects and remits TOT in unincorporated areas, but hosts must still complete applications

Required Documents, Permits, and Licenses

Primary Permits

Vacation Rental Permit or Hosted Rental Permit (Santa Cruz County)
Transient Occupancy Tax (TOT) Certificate
Business Tax Certificate (for some jurisdictions)

Required Documentation

Completed permit application forms
Property ownership documentation
Proof of insurance
House Rules documentation (see specific requirements below)
Floor plans/site plans if required
Noise mitigation plans if applicable

Application Forms

Specific Regulations

Guest Limits

Vacation Rentals: 2 overnight guests per bedroom + 2 additional overnight guests total Daytime Guests: Maximum of twice the overnight guest limit Hosted Rentals: 3 guests per hosted bedroom

House Rules Requirements

Must be posted on-site and include:

Rental age requirements
Number of guests allowed
Number of vehicles permitted
Noise limits
Food/cooking requirements
Pet requirements
Prohibited events
Trash management protocols
Emergency evacuation instructions

Geographic Restrictions

Not Allowed In:

Accessory structures
Accessory Dwelling Units (ADUs)
Legally restricted affordable housing units
Balconies, porches, sheds, tents, and RVs

Designated Area Caps (LODA, SALSDA, DASDA)

Live Oak & Seacliff/Aptos: Maximum 15% of total parcels may have STR permits
Davenport/Swanton: Maximum 10% of total parcels may have STR permits
All Designated Areas: Maximum 20% of residential parcels per block

Wait List Process (Designated Areas)

Bi-annual evaluation (June 1st and December 1st)
$145 annual fee to maintain wait list position
First-applied, first-issued system
Submit wait list request form to: Planning.ZoningInfo@santacruzcounty.us

State-Level Regulations (California)

California state law does not specifically regulate short-term rentals at the state level, leaving regulation to local jurisdictions. However, investors should be aware of:

Transient Occupancy Tax requirements vary by jurisdiction
Fair Housing Act compliance when screening guests
Americans with Disabilities Act requirements for accessible accommodations
Consumer protection laws regarding cancellation policies and fees

Contact Information

Santa Cruz County Planning Department

Address: 701 Ocean Street, Santa Cruz, CA 95060 (4th Floor) Phone: (831) 454-2130 (Zoning Information Line) Email: Planning.ZoningInfo@santacruzcounty.us Website: http://www.sccoplanning.com/

County Treasurer-Tax Collector

Website: http://www.co.santa-cruz.ca.us/Departments/TaxCollector/TransientOccupancyTaxandTourismMarketingDistrict.aspx For TOT Certificates and tax remittance

Scotts Valley City Hall (for verification of current status)

Note: Direct contact information not provided in sources, but investors should contact City Hall directly to verify current STR regulations.

Wait List Management

Address: County of Santa Cruz CDI, Unified Permit Center Attn: Vacation Rental Processing 701 Ocean Street, Room 400 Santa Cruz, CA 95060

Important Links and Resources

Primary Regulatory Sources

Application Resources

Tax Information

Transient Occupancy Tax Information

Related City Regulations

Industry Resources

Airbnb Help Article - Santa Cruz County
Current Market Analysis (Note: This blog states STRs are banned in Scotts Valley)

Investment Recommendations

For Scotts Valley Area Investors:

Verify Current Legal Status: Contact Scotts Valley city officials to confirm the current prohibition status
Consider Nearby Alternatives: Focus on unincorporated Santa Cruz County areas without waitlists
Long-term Rental Conversion: Consider converting STR properties to long-term rentals given regulatory constraints
Alternative Markets: Explore Monterey, San Jose, or other nearby markets with more favorable STR regulations

Due Diligence Checklist:

[ ] Confirm current legal status with local authorities
[ ] Verify zoning allows intended use
[ ] Check HOA/property management restrictions
[ ] Confirm tax obligations and collection processes
[ ] Review insurance requirements and availability
[ ] Assess market demand and competition in area
[ ] Evaluate property management costs and availability

Critical Warning: Given the conflicting information sources regarding Scotts Valley's current STR regulations, investors must verify the legal status directly with city authorities before making any investment decisions based on short-term rental income projections.

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Ask the AI Advisor about Scotts Valley

Scotts Valley sits in Santa Cruz County, California, tucked into the redwood-clad foothills of the Santa Cruz Mountains a few miles inland from the Pacific coast. The small city has a population of roughly 12,000 and carries a quiet, suburban character defined by tree-shaded neighborhoods, family-owned restaurants, and a pace that feels noticeably calmer than the nearby coast. It functions as a natural gateway to two very different California experiences: the beaches and boardwalk of Santa Cruz to the south, and the old-growth redwood forests of the Santa Cruz Mountains to the north and west. Scotts Valley lies approximately 30 miles south of San Jose and roughly 70 miles south of San Francisco, making it an easy detour for travelers looping through the Bay Area or heading down toward Monterey.

Just a few minutes west of town, Henry Cowell Redwoods State Park protects one of the most accessible old-growth redwood groves in the region. Visitors can wander the Redwood Trail loop beneath trees that rise well over 250 feet, then follow the San Lorenzo River on adjacent paths. The park's main entrance off Highway 9 in Felton is roughly a 10-minute drive from most of Scotts Valley, and the area is also home to the Roaring Camp Railroads, where historic steam and diesel trains run through the surrounding forest.

A bit farther into the mountains, Big Basin Redwoods State Park holds the distinction of being California's oldest state park, established in 1902. Its stands of ancient coast redwoods, including the famous Mother and Father Trees, draw hikers from across the region looking for a deeper forest experience. From Scotts Valley, the drive northwest along Highway 9 takes roughly 30 to 40 minutes, winding through redwood canyons along the way.

About 10 to 15 minutes south, the city of Santa Cruz offers the closest stretch of ocean, anchored by the Santa Cruz Beach Boardwalk and its long sandy main beach. The adjacent downtown mixes surf shops, bookstores, and a lively Pacific Avenue dining scene, while the Westside adds a more laid-back, coffee-shop feel. Capitola, with its colorful village-by-the-sea setting, sits just east of Santa Cruz and is another easy coastal stop within a 15-minute drive.

Scotts Valley appeals as a short-term rental base largely because it sits between two of Northern California's strongest draws without being saturated by either. Guests get the calm of a mountain town, the redwoods at their doorstep, and a short drive to the Pacific surf scene, all while remaining within an easy commute of the Bay Area's major airports and cities. That blend of accessibility, year-round mild weather, and surrounding natural variety gives the area a steady, diverse traveler base throughout the seasons.