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

Short-term rentals are currently allowed in Solvang, CA, but with significant restrictions and pending regulatory changes. As of 2025, the city operates under an existing short-term rental ordinance adopted in 2016, while simultaneously undergoing a comprehensive review and amendment process. The current framework permits STRs only in specific zones: the Tourist-Related Commercial (TRC) district and along the south side of Copenhagen Drive east of Fifth Street (1506-1546 Copenhagen Drive).

Critical Status Update: The Solvang City Council is actively revising STR regulations, with amendments expected to be implemented in 2026. New permits will likely be issued 4-6 months after ordinance adoption, with existing permit holders receiving priority application opportunities.

Starting a Short-Term Rental Business in Solvang

Phase 1: Pre-Application Due Diligence

Zoning Verification is Mandatory. Before advertising or operating, you must confirm your property's eligibility with the Planning Department. Email your property address and Assessor's Parcel Number (APN) to planningdept@cityofsolvang.com for definitive zoning confirmation.

Current Permitted Areas:

• Tourist-Related Commercial (TRC) zone
• South side of Copenhagen Drive east of Fifth Street (1506-1546 Copenhagen Drive)

Phase 2: Business Registration Requirements

City Business Certificate: All STR operators must maintain a current City Business Certificate regardless of whether the property is owner-occupied or investment-based.

Registration Process:

1. Complete business certificate application through city channels
2. Provide proof of property ownership or legal right to operate
3. Pay applicable business license fees
4. Maintain current certificate status annually

Phase 3: Transient Occupancy Tax (TOT) Compliance

TOT Registration is Mandatory for All STRs. If operating as a transient lodging facility, you must register and remit the Transient Occupancy Tax to the City of Solvang.

Phase 4: Operational Requirements (Current Ordinance)

Neighbor Notification: Provide annual written notice to neighboring property owners within 100 feet of the vacation rental property.

Occupancy Limits: Maximum of two adults per bedroom plus two additional adults, regardless of property size.

Good-Neighbor Practices: Maintain on-site parking, professional trash service, and enforce quiet hours to preserve neighborhood character.

Required Documents, Permits, and Licenses

Current Requirements Under Existing Ordinance

Primary Documentation:

• City Business Certificate (maintained current annually)
• Property registration with the city
• Neighbor notification documentation (within 100 feet)
• Proof of TOT registration and ongoing compliance
• Property insurance documentation
• Emergency contact information posted on-site

Planned 2026 Requirements (Under Revision):

• Vacation Rental Permit (new permit system being developed)
• Health, safety, and welfare inspection compliance
• Parking requirement compliance documentation
• Annual permit fee payment
• Compliance monitoring and reporting

Tax and Fee Obligations

Transient Occupancy Tax (TOT): Remit applicable TOT payments according to city schedules and rates.

Business Certificate Fees: Annual business license fees as established by city fee schedule.

Planned 2026 Fees: Annual permit fees (amounts to be determined when ordinance is finalized).

Specific Regulations: City, County, and State Levels

City of Solvang Current Regulations (2016 Ordinance)

Zoning Restrictions:

• STRs permitted only in Tourist-Related Commercial (TRC) zone
• Specific Copenhagen Drive corridor (1506-1546)
• Operation outside designated zones prohibited

Operational Limits:

• 30-day maximum rental period (definition of short-term rental)
• Occupancy: two adults per bedroom plus two additional adults
• Annual neighbor notification requirement
• Mandatory TOT payment and registration

Enforcement Gaps:

• Limited verification capabilities
• No follow-up after initial permit issuance
• Weak revocation processes for non-compliance
• Estimated 40+ units operating illegally without permits

City of Solvang Pending Regulations (Expected 2026 Implementation)

Proposed Zoning Changes:

• Limit new Vacation Rentals to Village Mixed Use (VMU) District exclusively
• Allow existing permit holders outside VMU to apply for non-transferable new permits

New Requirements Under Development:

• Annual permit fee structure
• Cap on total number of permits issued
• Minimum stay criteria: 30 nights per year for permit holders
• Formal occupancy limits
• New inspection program for health, safety, and welfare
• Parking requirements (specific standards pending)
• Enhanced compliance monitoring tools
• Operation restricted to permitted zones only

County-Level Regulations

Santa Barbara County maintains separate short-term rental ordinances that apply to unincorporated areas. City regulations supersede county rules within Solvang city limits. For county-specific STR requirements, contact the Santa Barbara County Planning and Development Department.

State-Level Regulations (California)

Key State Considerations:

• Short-term rentals are counted as net housing losses under Regional Housing Needs Assessment (RHNA) calculations
• Conversion of residential units to STRs requires corresponding rezoning elsewhere to meet housing obligations
• State law changes since 2016 ordinance necessitate local regulatory updates
• Municipalities must balance tourism economy with long-term housing availability requirements

Contact Information and Local Authorities

Primary City Contacts

Community Development Department

• Director: Rafael Castillo
• Email: rcastillo@cityofsolvang.com
• Planning Division Email: planningdept@cityofsolvang.com

City Hall

• Address: 1644 Oak Street, Solvang, CA 93463
• Phone: (805) 688-5575
• Office Hours: Monday - Friday, 8:00 AM - 5:00 PM
• Website: www.cityofsolvang.com

Key Departments for STR Operations

Planning Division

• Zoning confirmation and permit requirements
• Ordinance interpretation and compliance guidance

Business License Division

• Business Certificate applications and renewals
• Fee schedules and payment processing

Finance Department

• TOT registration and remittance procedures
• Tax collection and compliance monitoring

County Contacts (For Reference)

Santa Barbara County Planning and Development

• Website: www.countyofsb.org/776/Short-Term-Rental-Ordinance
• Note: County rules apply only to unincorporated areas

Source References and Links

Primary City Sources

• Solvang STR Permit Information: www.cityofsolvang.com/583/Short-Term-Rental-Permits
• Current STR Ordinance (eCode360): ecode360.com/43824356#46094037
• Business Certificate Information: www.cityofsolvang.com/318/Business-Certificates
• City Contact Directory: www.cityofsolvang.com/directory.aspx

News and Development Sources

• Santa Maria Times STR Ordinance Coverage: santamariatimes.com/news/local/govt-and-politics/solvang-to-revamp-short-term-rental-ordinance-permanent-housing-needs-illegal-operation-among-concerns/article_693b1a6f-9c80-47ee-aa76-7f5926e7746f.html

County Reference

• Santa Barbara County STR Information: www.countyofsb.org/776/Short-Term-Rental-Ordinance

Timeline and Implementation Schedule

Current Status (2025): Existing 2016 ordinance remains in effect while amendments are developed.

Late Fall 2025: Draft ordinance scheduled for Planning Commission review and recommendation.

2026 Implementation: New permitting system and online portal expected to launch 4-6 months after ordinance adoption.

Priority Application Period: Existing permit holders will receive first opportunity to apply for new permits under revised system.

Critical Action Items for Investors

1. Verify Current Zoning Eligibility before any property acquisition or investment
2. Monitor City Council and Planning Commission Agendas for ordinance development updates
3. Contact Planning Department Early with specific property information for compliance confirmation
4. Budget for Pending Fee Structure while specific amounts remain undetermined
5. Prepare for Enhanced Compliance Requirements including inspection and monitoring protocols

Investment Advisory: Given the ongoing regulatory revision process, potential investors should maintain close contact with city planning staff and consider the impact of pending zoning restrictions, particularly the proposed VMU district limitation, on investment strategies and property selection.