Short Term Rentals

The City Council adopted rules and regulations regarding the permitting of Vacation Rentals and Homestays. This page is intended to be a helpful location for members of the public to access the City’s most recent regulations regarding Short Term Rentals. If you have any questions about Short Term Rentals, please contact the Community Development Department at (805) 473-5420.

A vacation rental is defined as a “structure being rented for less than thirty (30) days without concurrently being occupied by the owner/operator where the short-term lodging is provided for compensation, whereas a homestay is defined as an owner-occupied dwelling unit where a maximum of two short-term lodging rooms are provided for compensation.”

On October 11^th, 2022, the City Council adopted Ordinance No. 718, amending short term rental regulations within the City. Included in the revised ordinance is a cap on the total number of vacation rentals within the City of 90 total vacation rentals. At this time, the City has exceeded the cap and will not be granting any additional approvals at this time. City staff is planning to review the existing cap during the spring or summer of 2023.   

Complaint Process

If there are issues with the operation of a vacation rental, please start by notifying the listed emergency contact person for the vacation rental. If you are unable to reach a resolution to the issues with the emergency contact person, please contact the Police Department at 805-473-5100. We also request that you notify Community Development staff by calling 805-473-5420. If an approved Vacation Rental continually causes disturbances in their neighborhood, revocation of their permit is a possibility. 

A list of the emergency contacts for each approved Vacation Rental can be found here.

A list of all approved Homestays can be found here. 

Application Process

Both homestays and vacation rentals are permitted with the approval of a Minor Use Permit – Plot Plan Review. Application for Short Term Rentals can be submitted through the City’s Permit Portal. To apply, please select “Apply for a Permit” underneath “Planning Permits.” You will then select “Plot Plan Review” from the list of available permit types. The application fee for Plot Plan Reviews can be found on the City’s Master Fee Schedule.

Vacation Rentals 

At the time of submittal, the following items are required to be submitted for the application to be deemed complete: 

1. Payment of the required fee; 
2. A site plan of the property;
3. A floor plan of the structure(s); 
4. An emergency contact person residing within a 15-minute drive of the rental property; and
5. Mailing labels with property owner mailing addresses for all properties within a 300’ radius of the rental property.

Operators of Vacation Rentals are required to comply with the following Performance Standards:

Performance Standards and Conditions for Vacation Rentals.

1. Operators of vacation rentals are required to obtain a minor use permit-plot plan review (Section 16.16.080) and a business license.

2 .Any proposed vacation rental shall be compatible with the neighborhood in which it is located in terms of landscaping, scale and architectural character. The use shall be harmonious and compatible with the existing uses with the neighborhood

3. All Building Code and Fire Code requirements for the level of occupancy of the vacation rental shall be met.

4. All environmental health regulations shall be met.

5. The operator of the vacation rental shall, at all times while the property is being used as a vacation rental, maintain a contact person/entity within a fifteen-minute drive of the property. The contact person or entity must be available via telephone twenty-four (24) hours a day, seven days a week, to respond to complaints regarding the use of the vacation rental. The contact person or entity shall respond, either in person or by return telephone call, with a proposed resolution to the complaint within three hours between seven a.m. and nine p.m., and within thirty (30) minutes between nine p.m. and seven a.m. Vacation rental applicants shall be required to pay the city's fee at the time of application to generate mailing labels for all property owners within three hundred (300) feet. An emergency contact shall be deemed unresponsive if no response is provided to a call for assistance. Three instances of unresponsiveness within a twelve-month period shall be grounds to initiate revocation proceedings.

6. The operator of the vacation rental shall annually, at the time of renewal of the business license, notify the community development department of the name, address and telephone number of the contact person required in subsection 16.52.230.C.5.

7. A written notice shall be conspicuously posted inside each vacation rental unit setting forth the name, address and telephone number of the contact person required in subsection 16.52.230.C.5. The notice shall also set forth the address of the vacation rental, the maximum number of occupants permitted to stay overnight in the unit, the maximum number of vehicles allowed to be parked on-site, and the day(s) established for garbage collection. The notice shall also provide the non-emergency number of the Arroyo Grande Police Department.

8. On-site advertising of the vacation rental is prohibited.

9. The number of overnight occupants shall be limited to two persons per bedroom and two additional persons. A bedroom shall meet the minimum size requirements as defined in the Building Code.

10. All refuse shall be stored in appropriate containers and timely placed at the curb for collection every week.

11. The operator of the vacation rental shall pay Transient Occupancy Tax ("TOT") as required by Arroyo Grande Municipal Code Section 3.24.030.

12. Establishment of a vacation rental within five hundred (500) feet of an existing short term rental or school shall not be permitted.

13. Violations - violation of these requirements shall constitute grounds for revocation of the minor use permit pursuant to Section 16.16.220.

14. Vacation rentals shall not be approved within planned unit developments (PUDs).

15. The total number of approved vacation rentals within the city shall not exceed ninety (90). Once the cap is reached, complete applications will be added to a waiting list that will be processed on a first-come-first-served basis if new approvals become available.

16. Vacation rentals must remit a minimum amount of TOT to the city at least once every six months, the amount shall be established by resolution of the city council and shall be equivalent to half of the average annual TOT remitted by all vacation rentals that have remitted TOT the previous fiscal year, otherwise revocation proceedings shall be initiated.

17. The listed emergency contact for a vacation rental shall not be un-responsive to neighborhood complaints three times within a twelve-month period, otherwise revocation proceedings shall be initiated. An emergency contact shall be deemed unresponsive if no response is provided to a call for assistance.

18. Revocation proceedings shall be initiated if two citations are issued by a city official or two arrests are made within a twelve-month period due to rental guest behavior.

19. Vacation rentals shall be required to provide two off-street parking spaces for use by rental guests. These spaces shall be kept free and clear and the rental guest shall be made aware of their location for preferred use during the duration of the stay.

• Please note that the above performance standards only apply to Vacation Rentals approved after November 11, 2022. Vacation Rentals approved prior to November 11, 2022 are subject to the performance standards in Ordinance 663. 

Homestays

At the time of submittal, the following items are required to be submitted for the application to be deemed complete:

1. Payment of the required fee;
2. A site plan of the property; and
3. A floor plan of the structure(s); 

Operators of Homestays are required to comply with the following Performance Standards:

Performance Standards and Conditions for Homestays.

1. Operators of homestays are required to obtain a minor use permit-plot plan review (Section 16.16.080) and a business license.

2. Any proposed homestay shall be compatible with the neighborhood in which it is located in terms of landscaping, scale and architectural character. The use shall be harmonious and compatible with the existing uses with the neighborhood.

3. All Building Code and Fire Code requirements for the level of occupancy of the homestay shall be met.

4. All environmental health regulations shall be met.

5. The operator shall reside on the premises during the entire duration of the rental stay.

6. Individual guest stays shall be limited to fourteen (14) days, with a seven-day period between stays.

7. On-site advertising of the homestay is prohibited.

8. A bedroom shall meet the minimum size requirements as defined in the Building Code.

9. The operator of the homestay shall pay Transient Occupancy Tax ("TOT") as required by Arroyo Grande Municipal Code Section 3.24.030.

10. Establishment of a homestay within five-hundred (500) feet of an existing short term rental or school shall not be permitted.

11. Violations. Violation of these requirements shall constitute grounds for revocation of the minor use permit pursuant to Section 16.16.220.

12. Homestays must remit a minimum amount of TOT to the city at least once every six months, the amount shall be established by resolution of the city council and shall be equivalent to half of the average annual TOT remitted by all homestays that have remitted TOT the previous fiscal year, otherwise revocation proceedings shall be initiated.

13. Revocation proceedings shall be initiated if two citations are issued by a city official or two arrests are made within a twelve-month period due to rental guest behavior.

• Please note that the above performance standards only apply to Homestays approved after November 11, 2022. Homestays approved prior to November 11, 2022 are subject to the performance standards in Ordinance 663. 

Permit Approval

The Community Development Director is authorized to approve Minor Use Permit applications for both vacation rentals and homestays. Approvals may be granted when an application demonstrates compliance with the performance standards and special conditions applicable to short term rentals. Upon the approval of a permit for vacation rentals, Community Development staff will mail postcards to property owners within 300 feet of the subject property notifying them of the approval. The postcard includes basic information about the project and contact information for the emergency contact identified by the applicant to address disturbances at the property when it is being rented. Information about the appeal process is also included.

Appeal Process

The appeal period for Short Term Rentals is based upon the date of approval of the permit. From the date of approval, an appeal must be filed within ten (10) calendar days of the approval date or by 5:00 pm on the day following the Planning Commission meeting on which the approval is reported on the Planning Commission agenda, whichever is longer.

The form to appeal a decision made by the Community Development Director can be found here. This form lists the applicable appeal fee as well as the requirement to provide mailing labels at the time the appeal is submitted.