California Short Term Rental Laws

The State of California has been one of the most profitable vacation rental markets for investors and hosts since the launch of the Airbnb platform. Before starting an Airbnb business, property owners need to check out the California short term rental laws to know what they are allowed to do and what they are not allowed to do in their city and zoning district. 

While California does not have statewide regulations for vacation rentals, most cities in the state have imposed their own regulations. In some cases, they can be very restrictive, and hosts need to comply with rules in order to avoid hefty fines.

For an assessment of a specific address in California, it is recommended to submit your property to one of the best Airbnb management companies that work in the state.

California’s Definition of a Short Term Rental

For legal and tax purposes, the State of California defines short term rentals in Senate Bill No. 60 (SB-60) of 2021. A STR refers to a residential dwelling or a portion of a residential dwelling that is rented to a person or persons for 30 consecutive days or less.

A residential dwelling signifies a private structure that is designed and available for use and occupancy as a residency by one or more individuals.

The California definition of a short term rental excludes commercially operated hotels, motels, bed and breakfast inns, and timeshare properties.

Starting a Short Term Rental Business in California

Getting started with an Airbnb business in the State of California requires going through multiple steps and completing a number of requirements dictated by state-specific rules as well as the specifics of the short term rental industry.

While rules vary in California markets, Airbnb owners should take care of the following:

• Business registration: The majority of California cities expect short term rental operators to submit a business registration. They don’t have to necessarily form an LLC, but they need to have an entity for the purposes of paying taxes.
• Transient occupancy tax (TOT) certificate: All California Airbnb hosts need to pay a state and county/city TOT on the rental income they generate from guests, which requires getting a certificate. In many cases, listing platforms like Airbnb and Vrbo take care of this requirement on behalf of hosts.
• Licensing and permitting: There are no state-level short term rental permits and licenses in California, but most counties and cities require annual registration and renewal to operate legally. Failing to obtain required licenses and permits is heavily fined.
• Fee payments: Applying for a California city short term rental license or permit requires paying an annual fee, which is usually a few hundred dollars.
• Health and safety regulations: In all California markets, Airbnb rentals need to follow specific operational standards that guarantee the wellbeing of guests and local residents. These pertain to safety devices, maximum occupancy, quiet hours, and others. All requirements need to be met before applying for a license or a permit.
• Safety inspections: In many California jurisdictions dwelling units need to undergo inspections to receive a permit or license.
• Zoning regulations: Some cities in the State of California allow vacation rentals only in certain residential or commercial zoning districts, and hosts need to ensure zoning compliance before starting their business.
• Short term rental insurance: Even if it is not a legal requirement, California vacation rental owners need to get Airbnb insurance to cover property damage, general liability, and loss of rental income.
• Required paperwork: Getting a vacation rental permit or license in California may require different documents that generally include property address, proof of ownership, proof of residence (for owner-occupied/hosted short term rentals), contact information of the owner, and others.
• Best practices for starting a California short term rental business: To start a successful vacation rental business in California, investors need to check out local regulations in their location, both at the county and city levels. Short term rental laws are usually available on local government websites. It’s also a smart idea to consult with a local legal expert if you have any doubts. You can also hire a short term rental property manager to do all the work on your behalf.

Before you list your California investment property for short term renting, you need to make sure that it meets all state, county, and city requirements. This is the only way to operate legally and to avoid fines.

Short Term Rental Licensing Requirements in California

The State of California does not issue vacation rental licenses and permits at the state level. However, most California counties and cities require short term rental permits or licenses.

Licensing an Airbnb property involves the submission of various documents and types of information that vary from city to city. The most frequently required documents include paperwork providing information about the property type and address, the owner, the agent, the local contact, the number of rooms and maximum occupancy, and the available parking spaces. Moreover, a fee needs to be paid and a safety inspection by authorities needs to be conducted.

Licenses and permits are typically valid for 1 year throughout California (with some exceptions) and need to be renewed prior to expiration to remain active. Owners usually need to pay an annual renewal fee and an annual safety inspection fee.

Operating an Airbnb business in California without the obligatory licenses and permits is subject to hefty fines.

Required Documents for California Short Term Rentals

The documentation that California vacation rental property owners and agents need to submit for getting and renewing a license varies from one place to another. 

The most common documents for California short term rentals include:

• Business registration
• Business tax certificate
• Transient occupancy tax certificate
• Federal EIN
• Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
• County or city short term rental license or permit
• Personal ID
• Proof of property ownership
• Proof of residence
• Site plan
• Parking plan
• Proof of payment of fees

To make sure that they have all necessary paperwork before launching their short term rental business in California, owners need to check local regulations and requirements.

California Short Term Rental Tax

California vacation rentals have to pay a few taxes that include:

• Transient occupancy tax: Both state and local TOT rates apply to short term rentals. The combined rate ranges between 10% and 15% in most locations.
• Business taxes: The State of California requires the payment of different business taxes that might apply to Airbnb properties, depending on their specific operations.
• Tourism Business Investment District (TBID) assessment: This is usually equivalent to 1%.
• Short term rental income tax: Federal and local rates apply.
• Property tax: State and municipal rates apply.

Importantly, since owning a short term rental property is equivalent to running a business, California hosts can qualify for multiple deductibles that include.

California vacation rental hosts can qualify for the following deductibles:

• Real estate property depreciation (it’s recommended to perform a short term rental cost segregation study to maximize benefits)
• Property taxes
• Mortgage interest
• Mortgage insurance premium
• Vacation rental insurance policy
• Furniture and appliances
• Airbnb management fees
• Marketing and advertising costs
• Utility bills
• Cleaning fees
• Property maintenance expenses
• Accounting, legal, and other professional fees
• Home office and business travel expenses

Paying relevant taxes is an important aspect of running a business, but it’s also a major expense that diminishes cash flow. Benefiting from applicable taxable income deductions is an easy way to pocket more money as an Airbnb owner in California.

Statewide Short Term Rental Rules in California

The State of California does not have short term rental regulations that apply at the state level. Instead, the majority of counties and cities have their own rules that govern and regulate vacation rentals at the local level.

Generally speaking, California short term rental operators need to obtain a business registration, get a license or permit from the county or city authorities, and pay business taxes and transient occupancy tax on a regular basis.

Additionally, California Airbnb properties need to comply with health and safety regulations to protect guests and also not cause nuisance and noise to neighbors. They have to follow Good Neighbor policies and adhere to other performance standards.

Short Term Rental Laws by California City

While California does not have statewide vacation rental laws, most cities have introduced their own rules that aim to allow local property owners to profit from the Airbnb industry and local residents to keep their safety and peace. 

California city-level short term rental rules vary from barely mentioning these business activities, through allowing non-owner occupied rentals only, to prohibiting vacation rentals altogether.

Following are the Airbnb laws in some of the most popular tourist destinations in the State of California:

1. San Diego, California Short Term Rental Laws

The City of San Diego regulates vacation rentals via the Short Term Rental Occupancy (STRO) Ordinance, effective as of May 2021, and Section 5 of the Municipal Code. Short term rental occupancy is defined as the residency of a dwelling unit or a part of it for less than 1 month.

An Airbnb business in San Diego requires a STRO license which can belong to one of 4 tiers:

• Tier 1, Part-Time: This is a vacation rental that is rented for an aggregate of no more than 20 days per year. The host does not need to reside on site during renting.
• Tier 2, Home Sharing: This comprises the renting of a room or rooms in a home when the host resides on site. The host can be away from the property during the whole home STRO for up to 90 days per calendar year.
• Tier 3, Whole Home (excluding Mission Beach): This includes rentals of entire homes for more than 20 days per year when the host does not reside on site and the property is located outside Mission Beach. The minimum stay duration is 2 nights. The property needs to be used for STRO for at least 90 days per year to maintain the license. The number of Tier 3 licenses cannot exceed 1% of San Diego’s total housing units outside the Mission Beach Community Planning Area (CPA).
• Tier 4, Mission Beach Whole Home: This refers to renting an entire home within Mission Beach for more than 20 days per year. A minimum guest stay of 2 nights is required. The total number of Tier 4 licenses should be no more than 30% of dwelling units in the Mission Beach CPA.

Currently, applications for Tier 1, Tier 2, and Tier 3 licenses are open, while applications for Tier 4 licenses are closed. A host can hold only a single license at a time for one tier. Moreover, hosts need to apply for licenses personally; they cannot work via an agent. Licenses are non-transferable in case of change of ownership of the property.

To submit an application for a San Diego short term rental license, hosts need to provide:

• License application
• Transient Occupancy Tax Certificate number for the dwelling unit or proof of an application for one
• Proof of payment of the Rental Unit Business Tax
• Proof that the dwelling unit is the host’s primary residence for Tier 2
• Application fee of $25 for Tier 1 and Tier 2 and $75 for Tier 3 and Tier 4 + license fee of $100 for Tier 1, $225 for Tier 2, and $1,000 for Tier 3 and Tier 4

Licenses are valid for 2 years and need to be renewed biannually by paying a renewal fee.

San Diego Airbnb hosts need to comply with the following STRO operating requirements:

• Maintain the dwelling unit for residential occupancy only
• Be present on the premises during home sharing for Tier 2
• Use the license for at least 90 days per year and submit quarterly reports for Tier 3 and Tier 4
• Not allow guests to create public nuisance
• Provide a Good Neighbor Policy notice to guests
• Ensure that the dwelling unit complies with the California Fire Code Regulations
• Ensure that the premises do not have signs promoting a business
• Designate a local contact
• Post a notice on the exterior of the dwelling unit including the Transient Occupancy Tax Certificate number, license number, and contact information of the host or designated local contact
• Include the Transient Occupancy Tax Certificate number and license number in all ads
• Post guidance in the dwelling unit for guests to report human trafficking
• Comply with relevant chapters of the Municipal Code

San Diego short term rental owners need to pay Transient Occupancy Tax (TOT) of 10.50% as well as Business Tax/Rental Unit Business Tax. The annual fee for the Business Tax Certificate is $34 for a business with up to 12 employees and $125 + $5/employee for a business with 13+ employees

In sum, while San Diego Airbnb laws are very specific and detailed, operating a non-owner occupied short term rental is feasible and can be very profitable due to the high number of tourists.

2. Los Angeles, California Short Term Rental Laws

The City of Los Angeles controls vacation rentals with the Home-Sharing Ordinance, or Ordinance No. 185931.

In Los Angeles, a short term rental is defined as a rental unit that is rented in whole or in part to any person for transient use of 30 consecutive days or less. Meanwhile, home-sharing is an accessory use of a host’s primary residence for a maximum of 120 days per calendar year for the purpose of providing a short term rental. 

The number of days for which the residence can be rented without the host being present overnight is limited to 90 days per calendar year. Vacation rentals are allowed in all zones where residential use is permitted.

Los Angeles short term rentals need to be registered with the City authorities. 

There are 2 types of home-sharing in Los Angeles:

• Standard home-sharing registration: This allows hosts to rent all or part of their primary residence for up to 120 days per calendar year.
• Extended home-sharing registration: This allows hosts to rent their home for more than 120 days per year. However, it is harder to obtain.

Submitting an application for a Los Angeles home-sharing registration requires:

• Photo ID
• 2 documents proving primary residence
• Signed and notarized affidavit showing the landlord’s approval if the host is a renter or a lessee
• TOT registration
• $89 registration or renewal fee or $850 fee for extended home-sharing registration

To qualify for extended home-sharing registration, a Los Angeles short term rental host has to:

• Have maintained a valid home-sharing registration for at least 6 months or have hosted for at least 60 days
• Provide proof of mailing of a notification of the extended home-sharing application to neighboring owners and renters
• Have not had their home-sharing registration suspended or revoked over the last 2 years
• Not have had more than 1 citation issued over the prior 3 years

Licenses are valid for 1 year and need to be renewed on an annual basis.

Los Angeles Airbnb hosting requirements demand that hosts:

• Only post listings on the hosting platforms specified in the home-sharing application, which is basically limited to Airbnb
• Cannot book more than one set of guests at a time
• Cannot engage in commercial uses for purposes of a party or an event
• Must ensure the provision of basic health and safety features including fire extinguishers, smoke detectors, and carbon monoxide detectors
• Prohibit late-night outdoor parties
• Adhere to maximum occupancy limits set up at 2 adult persons per habitable room
• Provide a Code of Conduct to guests
• Pay a $3.10/night fee for each night of home-sharing

The TOT rate in Los Angeles is 12.00%.

To conclude, Los Angeles has prohibitive short term rental regulations that limit these business activities to primary residences only. Out-of-state investors cannot buy a property to rent out on Airbnb.

3. Lake Tahoe, California Short Term Rental Laws

Short term rental regulations around Lake Tahoe vary by specific city.

The City of South Lake Tahoe distinguishes between 2 types of vacation rentals:

• Qualified Vacation Home Rentals: In this case, the entire dwelling is rented out for a period of less than 30 consecutive days, and the host is not present on site during this time. The City of South Lake Tahoe qualified vacation home rentals are regulated by Measure T, which allows them in residential zones as long as the owner is a permanent resident of the City and the dwelling unit is rented for up to 30 days per calendar year. These short term rentals require a permit.
• Hosted Rentals: A hosted rental is defined as the owner’s or the tenant’s hosting of visitors in the homeowner’s or tenant’s home for compensation for 30 or fewer consecutive days, while the homeowner or the tenant lives on site throughout the stay. These short term rentals are not allowed in multi-family dwellings, ADUs, and timeshares. A permit is required, and there is a limit of 200 active permits in the City of South Lake Tahoe at any time.

Getting a Qualified Vacation Home Rental Permit in the City of South Lake Tahoe requires:

• Application form
• Inspection from the Building Department
• Proof of primary residence property tax exemption
• Application fee

Meanwhile, a Hosted Rental Permit application needs:

• Applicant’s name, address, phone number, and email
• Address and assessor’s parcel number of the dwelling
• Copy of property tax statement showing homeowners tax exemption or notarized affidavit of principal place of residence for homeowner applicants
• Copy of rental/lease agreement and notarized affidavit of principal place of residence for long term tenant applicants
• Total number of bedrooms and number of bedrooms to be rented
• Number of off-street paved parking spaces
• Names of advertising platforms to be used
• Agreement to comply with the performance standards
• $274 application fee

Permits need to be renewed prior to expiration.

Hosted rentals need to meet certain performance standards including:

• The homeowner or tenant needs to respond to complaints within 60 minutes.
• There can only be a hosted rental contract with 1 party at a time.
• The  hosted rental permit number has to be included in all advertisements.
• The maximum number of guests is capped at 2 persons per bedroom, for no more than 6 persons in total.
• Rentals to unaccompanied minors under 18 years of age are prohibited.
• The number of vehicles depends on the number of off-street paved parking spaces and should not exceed 2.
• Outdoor amplified sound is not allowed.
• Outdoor spas and hot tubs cannot be used between 10 P.M. and 8 A.M.
• Events like weddings and receptions are not allowed.
• The homeowner or tenant needs to keep records of every night for which the rental is rented.
• The homeowner or tenant needs to go over the performance standards with guests prior or during stays.
• The performance standards need to be included in the hosted rental agreement.
• TOT payments have to be made on time.

The City of South Lake Tahoe imposes a 12% TOT rate.

Placer County, where North Lake Tahoe is located, has its own short term rental regulations. There, short term rentals are defined as any unit or portion of it that is permitted for residential use and rented for occupancy, dwelling, lodging, or sleeping purposes for a period between 1 night and 30 days. This definition excludes hotels, motels, and condo-hotels. They are regulated by the STR Ordinance of the Placer County Code and are generally allowed in all zone districts that allow residential use.

Placer County requires vacation rentals to have a short term rental unit permit, and the total number of permits is limited to 3,900 at any given time. Owner-occupied properties in good standing are not included in this cap.

A short term rental unit permit application requires the following information and documentation:

• Property owner or agent name and contact information
• Local contact person name and phone number
• Address and assessor's parcel number
• Rental unit type and number of units
• Number of bedrooms
• Number of on-site parking spaces and description of their locations
• Proof of total number and type of trash receptacles
• Application for TOT certificate
• Number and location of fire extinguishers and smoke and carbon monoxide alarms
• Fire-life safety inspection
• Acknowledgement that the property owner or agent has read and understood the operational standards, prohibitions, and restrictions
• Photo proof of interior posting of Good Neighbor Flyer
• Permit fee

Permits need to be renewed before expiring.

Placer County imposes operational standards for Lake Tahoe short term rentals pertaining to:

• Local contact person
• Parking
• Noise
• Trash and refuse
• Posting requirements
• Advertising requirements
• Visible address
• Fire and life safety
• Active building permits
• Maximum occupancy
• Snow removal
• Pets

In Placer County and North Lake Tahoe, the transient occupancy tax rate is 10%.

To sum, Lake Tahoe short term rental laws allow Airbnb activities in certain areas, but they are generally subject to permit number caps.

4. Palm Springs, California Short Term Rental Laws

The City of Palm Springs regulates Airbnbs with Ordinance No. 1918 and differentiates between vacation rentals and homeshares:

• Vacation Rental: This is a single family dwelling or portion of it that is used for occupancy for dwelling, lodging, or sleeping purposes without the owner being present for a period of 28 consecutive days or less.
• Homeshare: This is similar to a vacation rental, but the owner is present on site during each entire guest stay.

Both types of short term rentals need to obtain a vacation rental certificate which is non-transferable. They are allowed only as ancillary or secondary uses of residential properties and are limited to single family dwelling units, while they are prohibited in apartments. Moreover, vacation rentals are capped at 20% of the total number of residential dwelling units in a neighborhood.

While Palm Springs short term rental laws do not impose a limit on the maximum number of days to rent per calendar year, no more than 26 contracts, equivalent to number of stays, are allowed per year. This means that Palm Spring Airbnb hosts can welcome guests up to 26 times each year. Hosts can also apply for a junior vacation rental certificate which costs less and can be used up to 6 times per year.

To obtain a license, owners need to submit a Vacation Rental Application Request Form which requires some basic information about the property and the owner. Upon reviewing the form, the City staff will respond with an account code and an activation code so that the owner can access the Vacation Rental Registration Certificate Application. 

Agencies and property managers can manage short term rentals in Palm Springs, but they need to be added to the owner’s vacation rental account. Moreover, owners need to submit a Transient Occupancy Tax (TOT) Permit. Processing takes up to 90 days due to the high volume of applications.

To apply for a license, owners need to submit the following information:

• Owner’s name, address, and phone number
• Exclusive listing agent’s name, address, and phone number, if available
• Local contact person’s name, address, and 24/7 phone number
• Property’s address
• Number of bedrooms and applicable daytime and overnight occupancy limits
• Evidence of valid business license
• Evidence of valid transient occupancy registration certificate
• Acknowledgement of receipt and inspection of a copy of all regulations pertaining to vacation rental operations
• Executed indemnification and hold harmless agreement agreeing to indemnify, save, protect, hold harmless, and defend the City of Palm Springs and its relevant authorities from any claims, damages, penalties, or losses arising from the vacation rental
• Evidence of insurance coverage
• Written acknowledgement that there are no covenants or other deed restrictions on the property limiting or prohibiting its use as a vacation rental

Vacation rental certificates are valid for 1 year, after which they need to be renewed. Importantly, a single owner can hold only 1 certificate at a time.

Palm Springs Airbnb properties are subject to multiple hefty fees including:

• New or annual vacation rental registration fee of $1,072 if renting for 6-26 times
• New or annual junior vacation rental registration fee of 642 if renting for up to 6 times
• New or annual homeshare registration fee of $268 if present on site
• Land Use Permit (LUP) fee for estate homes (5+ bedrooms) of $453
• Administrative Appeals Board fee of $911
• Transfer fee of $175 if transferring to an agency or a property manager
• New TOT permit fee of $25

Vacation rental hosts need to stick to a number of requirements including:

• Carry a short term rental insurance policy or personal liability policy with a minimum limit of $500,000
• Undergo annual safety inspections by the DSPC
• Have a certification by a licensed electrician regarding the operability of the GFI and the safety of pools and spas
• Provide the Good Neighbor Brochure and Statement of Rules and Regulations to guests and obtain their signatures
• Limit maximum occupancy to 2 overnight occupants per bedroom
• Limit cars to 1 per bedroom and provide adequate parking
• Provide a local contact who is available 24/7
• Submit a contract summary to the DSPC before each guest arrives
• Include the City ID number on all advertising
• Have a letter from the HOA Board of Directors or the Property Management Company that operating a short term rental business does not violate the HOA rules, if applicable

In Palm Springs, vacation rental hosts need to pay an 11.50% TOT and 1% Tourism Business Investment District (TBID) assessment.

To sum up, Palm Springs vacation rental regulations significantly limit potential occupancy, which might have a sizable negative impact on Airbnb income and profits. Nevertheless, non-owned occupied short term rentals are legal as long as they are not located in a neighborhood with 20%+ density.

5. Big Bear, California Short Term Rental Laws

The City of Big Bear Lake regulates vacation rentals within zip code 92315 with Ordinance No. 2023-518.

Big Bear defines a vacation rental as a residential dwelling unit or portion of it that is leased for a term of 28 consecutive days or less. Home-sharing is a type of a vacation rental property where no more than 2 bedrooms of a detached single family dwelling unit are rented for compensation for no more than 28 consecutive days while the owner lives on site during rentals.

Short term rentals need to follow certain zoning rules:

• R-L and R-1 Zones: Only 1 attached or detached single family unit is eligible. A single family unit and a detached guest house with no kitchen have to be rented as a single rental. A single family unit and ADU are not allowed.
• R-3 Zone: A single family unit is allowed. A single family unit with a detached guest house without a kitchen can be rented as a single rental. A single family unit and ADU cannot be used as a vacation rental. In the case of 1+ detached single family units, only 1 can be rented. In property improvements of 2-4 attached single family homes, all can be used. 4+ attached single family units under single ownership (apartments) are not eligible, while 4+ attached single family units under multiple ownership (condominiums) are eligible.
• Commercial Zones including Village Commercial: A single family unit can be used as a vacation rental if it is located in Village Commercial. Mixed-use buildings are not eligible.

Big Bear vacation rental licenses are valid for no more than 1 year and need to be renewed afterwards. They are non-transferable. Operating without a license is fined with $1,500 for first offense, and the fine size goes up for further violations.

Big Bear Lake hosts and agents need to comply with the following operational requirements:

• Adhere to all applicable codes related to fire, building, safety, zoning, lighting, and others including the availability of smoke detectors, fire extinguishers, and carbon monoxide detectors 
• Check in guests in person or receive a confirmation of arrival through virtual registration
• Have guests sign a copy of the Good Neighbor Policy before or during check-in
• Not exceed the maximum occupancy of 2 adult persons per bedroom plus 2 additional adult persons per property, for a total of no more than 16 adult persons per rental
• Prevent parties, weddings, and other gatherings exceeding the maximum occupancy limit
• Provide off-street parking spaces
• Respond in person within 30 minutes of dispatch of notice by the City to correct any violation
• Not operate radio receivers, musical instruments, phonographs, loud speakers, sound amplifiers, or other machines producing or reproducing sound unless within an enclosed structure and not audible at the property line
• Prohibit activities that disturb the peace between 10 P.M. and 7 A.M.
• Prohibit the use of the space between 10 P.M. and 7 A.M.
• Equip vacation rentals with a single sign including the City’s code compliance hotline, agent’s 24/7 contact information, maximum number of occupants, and maximum number of vehicles
• Not store trash and refuse within public view except in proper containers for collection purposes
• Prevent incessant barking of dogs
• Include a written notice of relevant requirements to guests
• Post a copy of the current license and requirements within the property
• Not enter into a vacation rental contract with a person under 18 years of age
• Pass an annual home inspection
• Pass an annual certification exam
• Have liability insurance coverage
• Remit TOT on a monthly basis

Failure to adhere to any of these requirements is fined with $500 the first time and more for further offenses.

Big Bear Airbnb owners need to pay a 9% TOT and a 3% Big Bear Lake Tourism Business Improvement District (BBLTBID) assessment.

All in all, Big Bear has some of the most lenient short term rental laws in California allowing the unlimited use of vacation rentals in most neighborhoods as long as they meet reasonable property type and occupancy standards.

6. San Jose, California Short Term Rental Laws

The City of San Jose regulates short term rentals in the Transient Occupancy as an Incidental Use to a Residence part of the City Municipal Code. Incidental transient occupancy refers to the use or possession or the right to the use or possession of any rooms, rooms, or part of them for dwelling, sleeping, or lodging purposes by a transient user, i.e., someone entitled to occupancy for less than 30 consecutive days.

San Jose allows incidental transient occupancy in the following types of dwellings:

• One-family dwellings
• Two-family dwellings
• Multiple family dwellings
• Mobiles
• Live-work units
• Guest houses

Vacation rentals cannot be operated out of accessory dwelling units.

The maximum occupancy permitted in San Jose depends on the property type and whether the host is present.

When the host is present, the maximum incidental transient occupancy is limited to:

• 3 persons in one-family dwellings and mobile homes
• 2 transient users per dwelling unit in two-family dwellings and multiple family dwellings

When the host is not present, the occupancy is capped at:

• 2 people in a studio unit
• 3 users in a one-bedroom unit
• 2 persons per bedroom in multiple-bedroom units for a maximum of 10 persons

In case the host is present, San Jose short term rental use is unlimited, but they are limited to 180 days per calendar year if the host is not present.

In addition, San Jose Airbnb rentals need to follow these requirements:

• Have a required number of parking spaces
• Collect and pay TOT to the City
• Comply with the requirements of the housing code
• Retain records documenting compliance with the performance criteria for a period of 3 years

The combined transient occupancy tax rate in San Jose is 10%.

All in all, the San Jose short term rental laws allow non-owner occupied Airbnbs, but the maximum occupancy is limited to half a year only.

7. Oakland, California Short Term Rental Laws

The City of Oakland is currently working on new regulations to govern the rental of residential dwelling units for less than 30 days at a time. These regulations are expected to be finalized and imposed by the end of 2024. 

Meanwhile, at the moment, short term rentals fall into a few different categories including Permanent Residential Activities, Semi-Transient Residential Activities, Bed and Breakfast Residential Activities, and Transient Habitation Commercial Activities.

Renting a single family home, duplex, apartment, condo, live-work unit, or room for less than 30 days is defined as Transient Habitation, equivalent to a hotel, and is not allowed in most residential and commercial zones. Such vacation rental operators are only permitted in designated zones in downtown, along the waterfront, near the airport, along I-880 freeway, and in Specific Plan areas. Meanwhile, short term rental activities are strictly prohibited in secondary units such as accessory dwelling units and in-law units.

In zones where Transient Habitation is allowed, operators need to obtain a Conditional Use Permit (CUP), which is rather difficult to get.

Oakland short term rentals can qualify as Bed and Breakfast Residential Activities if:

• The property is a single family dwelling or a two-family dwelling.
• The dwelling contains no more than 6 guest units and hosts no more than 12 paying guests at a time.
• The facility is owner-occupied.
• The property has an existing or contingency historic rating of “A”, “B”, “C”, or “D” or is a Landmark according to the City of Oakland Office of Historic Preservation.
• The facility includes incidental eating and drinking services for lodgers only provided from a single kitchen.

Oakland does not allow Bed and Breakfast Residential Activities in all zoning districts and imposes CUPs.

The TOT rate in Oakland is one of the highest in the State of California, at 14%.

In other words, non-owner occupied short term rentals are very restricted in Oakland. This reality might soon change if the City adopts the newly proposed regulations, but it’s not clear whether rules will be more conducive or more prohibitive than existing stipulations. Airbnb investors interested in Oakland should keep an eye on new legal developments.

8. Santa Ana, California Short Term Rental Laws

The City of Santa Ana banned short term residential rentals in April 2014 in order to preserve the character of neighborhoods, address the negative effects of unpermitted business operations, and provide much-needed housing supply. There are reports that the City authorities lifted the ban in October 2015.

Presently, Santa Ana does not have vacation rental regulations.

The TOT rate is 11% in Santa Ana.

To conclude, Santa Ana has not introduced any short term rental rules yet, which makes it a potentially good place for investing in Airbnb. However, investors should keep in mind that local authorities might decide to ban vacation rental activities again since they already have a history of imposing such restrictions once.

9. Temecula, California Short Term Rental Laws

The City of Temecula Municipal Code (TMC) prohibits short term rentals altogether. They are defined as a dwelling unit which is shared in whole or in part for temporary occupancy for a period of less than 30 consecutive days.

This prohibition refers to all types of vacation rentals and all zoning districts. That’s always been the case in Temecula, and it is not new legislation. The fine for operating a Temecula Airbnb business is $1,000 per day.

It’s safe to say that Temecula has some of the worst California short term rental regulations as no Airbnb properties are possible.

10. Irvine, California Short Term Rental Laws

The City of Irvine prohibits short term rentals in all residential zones and all other zoning districts in Section 3-25-1 of the Zoning Ordinance. Posting, publishing, and maintaining advertisements of short term rentals is also strictly prohibited. Short term rental refers to a rental or other occupancy of a dwelling unit or part of it to visitors where lodging is furnished for a period of less than 30 consecutive days.

Running an Airbnb business in Irvine may result in a fine of $1,500, while operators might also be found guilty of a misdemeanor.

Together with Temecula, Irvine has imposed the most restrictive vacation rentals regulations across the State of California.

11. Long Beach, California Short Term Rental Laws

The City of Long Beach short term rental regulations aim to allow residents to generate income and visitors to experience the local community while maintaining the long term rental housing stock, preserving the character of residential neighborhoods, and safeguarding residents. STRs are defined as a home or a portion of it that is rented to paying guests for 30 consecutive days or less.

Long Beach vacation rentals need to obtain a short term rental registration of 2 types:

• Primary Residence STR Registration: The STR unit resides on the same parcel of land as the applicant’s primary residence, which is the person’s permanent residence or usual place of return for a minimum of 275 days per calendar year. Un-hosted short term rentals of this type are capped at a maximum of 90 days per registration, while hosted rentals are unlimited.
• Non-Primary Residence STR Registration: The STR unit is not the primary residence of the owner. Both un-hosted and hosted short term rentals of this type are unlimited.

The 2 types of rental activities are defined as follows:

• Un-hosted: The registrant remains on site and resides in a qualified dwelling unit or portion of it throughout guest stays. The registrant needs to be the owner or an authorized long term tenant.
• Hosted: The registration holder is not present on site during guest stays.

To be eligible for registration, a STR needs to be a qualified dwelling unit which refers to a structure that’s been legally permitted by the City of Long Beach as a habitable space. 

A qualified dwelling unit in Long Beach, California includes the following:

• Single family dwellings
• Individual units on multi family properties
• Maid quarters
• Guest houses
• Apartments

The following types of properties cannot be turned into Long Beach short term rentals:

• Rumpus rooms
• Garages
• Storage rooms
• Pool houses
• Casitas
• ADUs
• JADUs
• Live-work units and spaces

Moreover, only a certain number of units within a multi unit qualified dwelling can be used as short term rentals. For properties or developments with 1-10 qualified dwelling units, only 1 unit is allowed for short term rental use.

Applying for a primary residence STR registration requires these documents:

• 2 documents of primary residence
• Primary residence certification and indemnification form
• Assessor identification number
• Property owner consent if a renter or lessee

It’s important to note that the maximum number of non-primary residence short term rentals that can operate in Long Beach at any point is limited to 800. 

To apply for the relevant registration requires:

• Driver’s license
• Notarized agreement form declaring that the individual may lawfully act on behalf of the entity for property owner registrants who are a business entity
• Proof that the business entity is registered and in good standing with the California Secretary of State for property owner registrants who are a business entity and for non-property owner registrants applying under an individual business
• Signed and notarized property owner authorization for renters or lessee registrants
• Signed and notarized property owner authorization with reference to the name of the individual’s business as the STR operator for non-property owner registrants applying under an individual business
• Notarized agreement declaring that the individual may lawfully act on behalf of the entity for non-property owner registrants applying under an individual business

Long Beach short term rental registrations are valid for 1 year and need to be renewed 45 days before expiry.

Long Beach Airbnb properties need to comply with strict operating requirements including:

• Collect, report, and pay TOT on a monthly basis
• Pay an annual application/registration fee of $260
• Have a local contact person who is available 24/7
• Limit maximum occupancy to 2 persons per bedroom plus 2 additional persons for a maximum of 10 persons per property
• Not cause nuisance
• Have advertising that clearly shows the City-issued STR registration number
• Have a notice posted within the unit with the maximum permitted number of occupants, parking rules, trash and recycling information, local contact name and phone number, emergency contact information, and evacuation plan
• Prohibit the use of outdoor pools, spas, and hot tubs between 10 P.M. and 7 A.M.
• Not post signs on the exterior advertising the STR unit

Long Beach Airbnb hosts need to pay a transient occupancy tax equivalent to 13% of gross receipts of rented stays.

To conclude, while non-owner occupied vacation rentals are generally allowed in Long Beach, they are limited to 800 at any point in time, which means that applicants will be put on a waiting list as soon as this quota is filled.

Bottom Line

Like the majority of US states, California does not have statewide short term rental laws and regulations. Having said that, however, investors looking to start an Airbnb business in California should keep in mind that counties and cities have introduced their own rules, which can be very restrictive as well as altogether prohibitive. 

This comes as no surprise taking into consideration the influx of tourists that the State of California welcomes every year and the impact they have on local housing markets and the life of local residents. Before purchasing an investment property to operate as a vacation rental in California, you need to check out the laws pertaining to your selected market to ensure that non-owned occupied short term rentals are allowed and relatively unrestricted.