The Santa Cruz County Board of Supervisors on Tuesday advanced new restrictions on short-term rentals to maintain housing stock and address complaints about disrespectful vacationers.
“We’re stopping the unchecked growth of vacation rentals,” said Supervisor Manu Koenig, adding that he wanted to help first-time home buyers who found themselves outcompeted by investors.
“Nothing’s more frustrating than bidding on a house and then losing the bid, and then three months later you see a vacation rental sign go up,” he said.
Koenig and Supervisor Justin Cummings took the lead on developing the proposed rules, which include a new cap on short-term rental permits. These changes would apply to unincorporated areas of the county, not the cities of Santa Cruz, Scotts Valley, Capitola and Watsonville, which have their own rules for short-term rentals.
The measure was approved 4-0, with Supervisor Felipe Hernandez absent, and is scheduled for final adoption on Aug. 19. It would then require California Coastal Commission approval.
Cummings said short-term rentals can exacerbate affordable housing and homelessness problems by reducing available housing. What started out as a way for homeowners to make a little extra money has since turned into the “commercialization of residential property,” he said.
“While I personally would like to see us go further, this is a starting point,” Cummings said. “I think that this is a good first step.”
He said Santa Cruz County has one of the most unaffordable housing markets in the United States. Research from the National Low Income Housing Coalition suggests that a worker would need to earn about $70 to $95 per hour to rent a market-rate, two-bedroom apartment in the county, making it the most expensive county in the state.
Vacation rental rule changes
County rules already restrict the number of vacation rentals in three zones: Live Oak, Aptos/Seacliff/La Selva Beach and Davenport/Swanton.
County rules also already restrict the number of “hosted” vacation rentals, where the landlord lives onsite, to 250.
The new rules would keep limits for most of the three zones and for “hosted” vacation rentals and set a new cap of 270 permits for “non-hosted” vacation rentals in areas outside those zones. That’s the same number that already have permits or have pending applications.
“We’re not actually removing anyone’s permits,” Koenig said. “We recognize that people have made substantial investments in turning these homes into vacation rentals.”
The new rules also call for:
- Rejecting “non-hosted” permit applications if the home neighbors other “non-hosted” vacation rentals.
- A vacation rental hotline to handle noise and other complaints from neighbors. All short-term rental properties would be required to display a sign with the hotline’s number. The hotline, expected to cost around $13,000 per year, would be paid for by increasing short-term rental application fees.
- Requiring vacation rental platforms, such as Airbnb and Vrbo, to remove all non-permitted listings from their sites and enhancing enforcement mechanisms to make sure they comply. County staff estimated that over 70 unpermitted vacation rentals are currently operating in unincorporated areas of the county.
- Limiting vacation rental permits to one per person or entity.
- Mandating that anyone who converts a unit into a short-term rental must pay six months of rent to any tenants they evict.
- A phased reduction in “non-hosted” permits in the three designated zones if the cap is not hit.
- Allowing onsite inspections for all new short-term rental properties.
- Certain streets in popular tourist areas of Aptos, Seacliff and La Selva Beach would have no limit on vacation rentals.
- Increasing the number of bedrooms to three from two that can be rented in a “hosted” property.
Marcella Hall, a Live Oak resident, spoke at the meeting in favor of the measure. “This would eliminate the problems we’ve experienced living next to a virtual hotel,” she said.
Though she voted for the measure, Supervisor Kim De Serpa expressed some concern that it would reduce the $9.3 million in transient occupancy tax revenue that the county took in last fiscal year from short-term rentals.
“Our general revenue is not great,” she said. “To do anything, especially now, that would limit any income coming into the county, to me is a difficult thing to swallow down.”
Koenig responded that he didn’t anticipate much of a fiscal impact.
The supervisors agreed to take up two issues at a later date: whether “hosted” short-term rentals should be uncapped, which De Serpa advocated for, and whether short-term rental permits should be renewable indefinitely, which could preclude new people from entering the market.
Santa Cruz County first adopted short-term rental regulations in 2011 and last updated them in 2020.
-Jesse Greenspan, Santa Cruz Local August 6, 2025
