This blog post is current as of August 24, 2025. Monterey County’s Coastline Gets New Vacation Rental Rules: What You Need to Know The beautiful, rugged coastline of Monterey County is a treasure, drawing visitors from all over. But managing the influx of tourists and ensuring that local communities thrive has been a balancing act for years. Now, a significant development has occurred: the California Coastal Commission has given its approval to Monterey County’s new vacation rental ordinance. This decision, finalized on August 13, 2025, marks a pivotal moment in how short-term stays will be regulated along this cherished stretch of California. After a decade of discussions, public input, and navigating complex processes, a new framework is in place to balance the needs of visitors with the preservation of residential neighborhoods and the unique character of our coastal towns. The Long and Winding Road to Regulation The path to creating these new vacation rental rules has been anything but smooth. It’s a story that spans over ten years, filled with attempts that hit roadblocks, including rejections from the Coastal Commission and complicated administrative hurdles. Back in the late 1990s, Monterey County tried to create ordinances for short-term rentals (STRs), but while an ordinance for inland areas was put in place, the one for the coastal zone never received the necessary certification from the Coastal Commission. This left a significant portion of the county’s most scenic areas without clear guidelines for a long time. Why the Need for New Rules? The decision to implement these regulations stems from a desire to address the “social economic impacts” that commercial vacation rentals can have on neighborhoods. Think about it: increased trash, more noise complaints, and parking headaches can really change the feel of a community. Beyond the immediate neighborhood impacts, there have also been concerns about how vacation rentals affect the availability of long-term housing and whether they contribute to pricing local residents out of their own communities. While some argue that limiting STRs won’t magically create affordable housing, the county’s main goal is to protect the residential character of its beloved coastal areas. Understanding the New Vacation Rental Ordinance At its core, the newly approved ordinance introduces several key provisions aimed at managing the impact of vacation rentals. A central piece of this regulation is the limitation placed on “commercial vacation rentals.” These are defined as unhosted stays – meaning the owner isn’t present – that are rented out more than three times a year. The Four Percent Cap For most of the Monterey County coast, these commercial STRs will be capped at a maximum of four percent of single-family homes within each specific planning area. This means that in many coastal neighborhoods, only a small percentage of homes will be allowed to operate as unhosted, frequent short-term rentals. Strict Bans in Sensitive Areas However, the ordinance gets even more specific for areas that are particularly sensitive. In places like **Big Sur** and the **Carmel Highlands**, commercial vacation rentals will be completely prohibited. This strong measure is in response to the significant impact these rentals can have on the “wild, rural, and unspoiled nature” of Big Sur and the “unique resource limitations” found in the Carmel Highlands. For these iconic locations, the focus is on preserving their distinct character and natural beauty. Differentiating Between Rental Types It’s important to understand that the ordinance makes a clear distinction between different kinds of short-term rentals. Commercial STRs vs. Hosted Stays As mentioned, “Commercial STRs” are those that are unhosted and rented frequently. On the other hand, “homestays” and “limited vacation rentals” (LVRs) are treated differently. In these cases, the owner is present during the guest’s stay, or the property is rented out infrequently (three times a year or less). These types of rentals are not subject to the same stringent caps as commercial STRs. So, if you’re thinking about renting out a room in your home while you’re there, or only renting your property a few times a year, those activities are still permitted. Impact on Property Owners and Visitors These new regulations are set to have a noticeable effect on property owners who currently operate vacation rentals. Those in Big Sur and the Carmel Highlands, in particular, may need to cease their commercial rental operations. Some hosts have voiced concerns that these changes could lead them to sell their properties or convert them to long-term rentals, fearing that they won’t be able to find affordable options for themselves. What Visitors Can Expect For visitors, the intention behind this ordinance is to foster a more balanced approach to tourism. The goal is to ensure that the enjoyment of Monterey County’s stunning coast doesn’t come at the expense of the local communities and their residents. Enforcement and What Lies Ahead The ordinance is slated to go into effect after its final adoption by the Board of Supervisors. For the coastal zone, the regulations will become effective thirty days after formal adoption, provided the Coastal Commission’s certification is complete. In the meantime, any unpermitted vacation rentals operating in the coastal zone can continue to do so temporarily until the new ordinance is officially certified. Penalties for Non-Compliance Monterey County has also outlined penalties for those who violate the new rules. Fines can reach up to $5,000 per day, and there’s also the possibility of an operator’s permit being revoked. A Flexible Framework It’s worth noting that the county has indicated that future modifications to the ordinance are possible. This suggests a commitment to adapting the regulations based on ongoing evaluation and feedback from the community, aiming for long-term effectiveness and fairness. A Look Back: Previous Challenges in Regulation The history of trying to regulate vacation rentals in Monterey County is a testament to the persistent efforts to find a workable solution. As we’ve seen, the county’s journey began long ago, with attempts in 1997 to establish ordinances for both inland and coastal areas. However, the coastal version faced rejection from the Coastal Commission. The inland ordinance, while implemented, proved to be quite burdensome and difficult to navigate. The permit process was lengthy and costly, resulting in very few permits actually being issued. This lack of clear regulations and inconsistent enforcement unfortunately led to a significant increase in unpermitted vacation rentals, creating more tension within the community. The county has openly acknowledged the need for a system that is both more practical and accessible for property owners. Public Input and the Coastal Commission’s Role The development of this current ordinance was a collaborative effort, involving extensive public input from community members, stakeholders, and various advocacy groups. The Coastal Commission’s vote, which was 6-2 in favor of the regulations, reflects a careful consideration of these diverse viewpoints. Commissioners recognized the substantial effort Monterey County invested in researching and drafting these important regulations. Balancing Economic and Social Factors The conversation around vacation rentals often touches on complex economic and social issues. On one hand, proponents argue that short-term rentals are vital for visitors, supporting tourism and local economies. They also believe these rentals can increase coastal access for people across different income levels. On the other hand, opponents highlight concerns about housing availability and affordability, as well as the strain on local infrastructure and the overall character of neighborhoods. The county’s approach aims to strike a balance, allowing for tourism while simultaneously safeguarding residential areas and the well-being of the community. The Coastal Commission’s Mandate The California Coastal Commission plays a critical role in ensuring that land use decisions within the coastal zone align with the Coastal Act. This act is fundamental in protecting coastal resources and promoting public access. The commission’s approval of Monterey County’s ordinance signifies its agreement that the proposed regulations adequately address these mandates, even while acknowledging the need to balance various interests. The Future of Vacation Rentals in Monterey County While the Coastal Commission’s approval is a major milestone, the ordinance still needs to go through the final adoption process by the Monterey County Board of Supervisors. As mentioned, the county has indicated that future adjustments to the ordinance are possible. This adaptive approach is designed to ensure that the regulations remain effective and fair in the long run, taking into account ongoing evaluations and community feedback. Key Takeaways for Property Owners and Visitors: * Commercial STRs are Limited: Unhosted rentals rented more than three times a year are capped at 4% of single-family homes in most coastal areas. * Big Sur & Carmel Highlands Bans: Commercial vacation rentals are completely prohibited in these sensitive areas. * Hosted Stays Continue: Renting a room while you’re home (“homestays”) or renting infrequently (“limited vacation rentals”) are still permitted and not subject to the same caps. * Permitting is Key: Property owners will need to ensure they have the correct permits and comply with county regulations. * Stay Informed: Keep an eye on updates from the Monterey County Board of Supervisors regarding the final adoption and implementation timeline. The new vacation rental ordinance represents a significant step forward in managing short-term stays along Monterey County’s breathtaking coastline. It’s a complex issue with many different perspectives, but this new framework aims to create a more sustainable and balanced future for both residents and visitors. What are your thoughts on these new regulations? Share your experiences or concerns in the comments below!