Quick Take
Santa Cruz County is cracking down on vacation rentals owned by absentee landlords and investors, aiming to curb their proliferation and free up housing supply. A new subcommittee will propose regulations to limit the number of unhosted rentals and rental permits, while the county demands platforms including Airbnb and Vrbo remove listings that don’t have county permits. This move comes amid growing concerns about housing affordability in the area.
Santa Cruz County will send a letter to vacation rental platforms including Airbnb and Vrbo demanding they remove all listings without county permits, and a new subcommittee will tweak the county rules hoping to curb the proliferation of unhosted rentals, following a board of supervisors vote on Tuesday.
This turn toward unhosted vacation rentals — residential properties owned by absent landlords for the sole purpose of renting to short-term stays — comes as part of a broader effort to loosen up housing supply in Santa Cruz County, which has been named the most expensive rental housing market in the U.S.
According to a report from Supervisors Manu Koenig and Justin Cummings, 665 of the 841 vacation rentals available in the county are unhosted, as opposed to rentals in which the owner lives in the residence part- or full-time. The same report found about 70 units in the county marketed on vacation rental platforms without permits. The report said an expanding inventory of vacation rentals only limits the local housing market at a time when the state is mandating local jurisdictions boost housing supply.
“While Airbnb contributes to rising housing costs, its impact could be managed through targeted regulations on absentee landlords while expanding the opportunities for owner-occupiers to share their extra space,” the report reads.
On Tuesday, the board of supervisors resolved to craft those targeted regulations. A new subcommittee, made up of Koenig and Cummings, will look at new regulations including a potential cap on the number of unhosted vacation rentals allowed in the county and a limit on the number of rental permits one person or company can have in the county.
The county already limits the number of unhosted vacation rental permits within three designated zones along the coast: The Davenport/Swanton area allows three unhosted rentals, the Live Oak area limits county permits to 262, and the Seacliff/Aptos/La Selva zone limits them to 241. The latter two zones have a high demand for these kinds of rentals: As of April, the most recent data available, the Live Oak area had a waitlist of 12 rental property applications and Seacliff/Aptos/La Selva had 83 applications on its waitlist.
Outside of those zones, the county doesn’t limit the number of unhosted vacation rental permits. Yet, the county does restrict hosted rental permits — those in which the property owner opens up a room to rent — at 250 (there is no active waiting list). Cummings and Koenig acknowledged that this was backward, and something they want to adjust through their subcommittee.
The proposal seemed to startle some short-term rental owners, who showed up to Tuesday’s meeting urging supervisors to include them in conversations around rule changes.
“I have a fear that there is an intent to ban vacation rentals here or to severely limit them, when they are not the cause of the housing problem here,” said Ian McHenry, a District 2 resident who has a vacation rental in District 1. “If we’re just going to try to build more housing, let’s not focus on [vacation rentals], let’s focus on building more housing, and supporting the people who stay in vacation rentals.”
John Pickart, who owns Beachnest Vacation Rentals in Santa Cruz but said he was representing several local companies, including Bailey Property Management, Surf City Rentals and Cheshire Rio Vacation Rentals, said vacation-rental landlords should be part of the conversation.
“Let’s come together and figure out reasonable legislation, if that’s what you want to do, but I believe it is already in place,” Pickart said.
After years of relatively lax enforcement of vacation rental rules, the county has lately been cracking down on illegal and nuisance rentals through regular listing checks, public hearings to address neighbor complaints and violations, and using the threat of permit revocations.
The California Coastal Commission, a state agency with extensive authority over land use along the coast, would ultimately have to approve any changes to the county’s vacation rental rules. Cummings, who sits on the Coastal Commission, said in a statement that the county “needs to do everything we can to help preserve our precious housing stock for the people who call Santa Cruz home.”
The Koenig/Cummings subcommittee expects to bring back proposed changes “no later than March 2025.”
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