Party house putdown: County’s revised vacation rental rules — with new caps, more teeth — near finish line

The proposed rules would change how many vacation rentals are allowed in three designated Santa Cruz County beach neighborhoods. They also would allow for ways to hold bad actors accountable, officials say.

Santa Cruz County is moving closer to enacting more stringent requirements on coastal vacation rentals — an initiative that began more than a year ago due to complaints of loud parties, parking concerns and lack of responsiveness by some property owners.

Also at issue is the available long-term housing supply, which could continue to be eaten away at by the additional conversion of homes into short-term rentals, county supervisors says.

“There is an unequivocal relationship” between the short-term rentals and a long-term housing shortage in the community, Second District Supervisor Zach Friend said at a county board meeting Tuesday.

The zones affected by the county’s vacation rental ordinance are Seacliff/Aptos/La Selva, Davenport/Swanton and Live Oak, which spans Twin Lakes Beach through Pleasure Point.

County supervisors unanimously voted to accept the tweaks — suggested by the California Coastal Commission — ping-ponging the amendments back to the commission for final approval. The 12-member Coastal Commission is an independent, quasi-judicial state agency that also regulates land use along the Pacific coast.

In June, longtime supervisor John Leopold, who oversaw the Live Oak/Pleasure Point area, spelled out the concerns of 1st District constituents at the board of supervisors meeting. He has since been replaced by Manu Koenig, who is following suit in supporting the changes.

“We should err on the side of the residents rather than erring on the side of the business within the residential neighborhood,” Leopold said in June. “In the 11 years we’ve had this, we haven’t revoked one permit — not one. So the message we’re sending is that you can get away with a lot, and the impacts on neighborhoods will be great. I’d like us to have a system that helps the people who actually live here, rather than the people who don’t live here but rent their properties.”

The new ordinance would freeze the number of permits issued in those areas and provide more enforceability, county staff said.

“We’ve laid out a process where two significant violations will require a public hearing for potential revocation and also will be grounds for denial of a renewal of an application,” Jocelyn Drake, a principal planner for the county told supervisors.

Friend said that under the current rules, county officials are hamstrung when it comes to trying to revoke permits of “problematic actors.” He called the changes “by far the strongest additional regulations that have been proposed since the creation of the ordinance nine years ago.”

“It creates a very strong set of guidelines for revocation and expectation of behavior of those that own these properties,” he said, adding that a switch to a firm cap on rentals rather than the current percentage would prevent that number from growing by at least 100 between the Aptos and Live Oak areas.

In the Live Oak area, for instance, instead of allowing up to 15% of all parcels that have residential uses to be short-term rentals, it would only allow the current 262 vacation rental permits. Additionally, no more than 18 hosted rental permits — where a property owner rents one or two bedrooms in a home for fewer than 30 days while staying on site — can be issued in the area.

Although supervisors had intended to set the cap even lower for the Live Oak area, coastal commissioners asked for the limit there to be in line with the number of permits currently issued, and supervisors agreed to do so Tuesday.

“This is like many of the issues we work on,” Third District Supervisor Ryan Coonerty said. “It’s a balance of competing interests. And then it’s also a balance of competing regulatory bodies. There’s us and the Coastal Commission, who have different mandates and different roles and responsibilities, and, you know, somewhere in there tends to be the compromise.”

For the Aptos zone, instead of allowing up to 15%, the number of vacation rentals would be capped at 241. There, no more than 45 hosted rental permits would be issued, for a total of 286 short-term rental permits.

A map shows the three designated beachside neighborhoods where most of Santa Cruz County's short-term rentals are located.
(Santa Cruz County)

In the Davenport zone, instead of a 10% cap, no more than three vacation rental permits would be issued, and the maximum number for hosted rentals would be four.

Pending final Coastal Commission approval, the updated ordinance is expected to go into effect in late February at which time a countywide moratorium on vacation rental permits will be lifted. The moratorium was issued last summer to pause new permits while the county drafts its updated ordinance.

Live Oak resident Joe Hall thanked supervisors for approving the original vacation rental ordinance nine years ago, saying it has made a “big change in our neighborhood.” He asked supervisors to consider bringing the cap for vacation rentals down even further in the future and instead up the number of hosted vacation rentals allowed for each property.

“This allows the Coastal Commission access but helps neighborhoods have less party houses,” Hall said.

Victor Gomez, government affairs director, for the Santa Cruz County Association of Realtors, said in an email to Lookout that his group, in general, was not surprised that the Coastal Commission pushed back some on the proposed ordinance amendment.

“We believe that it’s a fair balance between the needs of vacation rental owners, visitors and the neighborhoods that are impacted,” he wrote. “We believe in being a good neighbor, so we support the process of hearings for problematic permit holders, but in general, most have been good permit holders.”