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to be some conflicting information from certain sources suggesting ongoing regulations, which may indicate either outdated information or ongoing legislative discussions about potential changes.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.

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

1. Vacation Rental Permit or Hosted Rental Permit (Santa Cruz County)
2. Transient Occupancy Tax (TOT) Certificate
3. 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

• Vacation Rental Application
• Hosted Rental Application

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

• Santa Cruz County Planning Department
• County Code Section 13.10.694 (Vacation Rentals)
• County Code Section 13.10.690 (Hosted Rentals)
• Beach Neighborhood Designated Areas Map

Application Resources

• Vacation Rental Application Form
• Hosted Rental Application Form
• Current Wait List Information

Tax Information

• Transient Occupancy Tax Information

Related City Regulations

• City of Santa Cruz STR Information
• City of Capitola Vacation Rental Rules

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:

1. Verify Current Legal Status: Contact Scotts Valley city officials to confirm the current prohibition status
2. Consider Nearby Alternatives: Focus on unincorporated Santa Cruz County areas without waitlists
3. Long-term Rental Conversion: Consider converting STR properties to long-term rentals given regulatory constraints
4. 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.