Freedom & Fortune

Navigating Airbnb Short-Term Rental Regulations in San Luis Obispo County: A Comprehensive Guide

Welcome to the beautiful San Luis Obispo (SLO) County, known for its charming towns and breathtaking coastal areas, and where the thriving short-term rental market is as varied as its landscapes. 

Whether you’re a property owner looking to enter the rental market or a seasoned host refining your operations, understanding the specific regulations governing short-term rentals (STRs) in your area is crucial. 

Unfortunately, acquiring this knowledge is often much easier said than done. SLO County has distinct rules and requirements depending on the location of your short-term rental. And unless you know exactly where to look, piecing together the correct information on your own can be challenging.

But there’s no need to stress! 

We’ve designed this guide as an essential aid for current vacation rental owners and property managers or those considering entering the short-term rental industry in San Luis Obispo County. It offers a brief but comprehensive review of key city guidelines and considerations so that your role as a SLO County short-term rental operator is a success.

To go directly to the city your property is located in, you can use the links below: 

What to Expect as You Read This Guide

The majority of the content in this guide is broken down by city. In the case of multiple cities that share the same policies regarding short-term rentals, the cities are grouped by zone. 

For each section covering a city or zone, we’ve included the following information: 

  • Government links and official info – This includes any relevant links to government websites and documentation, as well as contact information for city officials. 
  • The definition of a short-term rental – While many cities throughout San Luis Obispo County use similar language, there are often subtle but important differences in what each city considers a short-term rental. 
  • Required permits and licenses for operating a short-term rental – Requirements vary widely from city to city. 
  • How and where to apply for STR permits and licenses – Application processes can be confusing for both new and experienced short-term rental owners, and we’ve done our best to make the steps as easy to understand as possible. 
  • Notable regulations – Some cities also have specific regulations such as proximity restrictions or parking requirements. If this is true for your city, we’ve outlined any regulations you should be aware of under the label “Notable Performance Standards.”

Arroyo Grande Airbnb Rules & Regulations

With its charming Historic Village and proximity to lush vineyards and local surf spots, Arroyo Grande is a natural destination for travelers seeking a relaxing getaway. However, don’t go listing your property on Airbnb just yet. 

Along with a two-step application process, there are quite a few regulations you need to be aware of before making your short-term rental available to the public – the most notable of which is a cap on the total number of approved rentals in the city. 

Arroyo Grande: An Overview of the Basics

Government Links & Official Information

Arroyo Grande has a dedicated Short Term Rentals page on their official city website that outlines their permit application process and performance standards and includes links to all relevant city ordinances as well. 

If you have any questions, you can call their Community Development Department at (805) 473-5420. 

The Definition of Short-Term Rentals in Arroyo Grande: Vacation Rentals vs. Homestays

The City of Arroyo Grande separates short-term rentals into “vacation rentals” and “homestays.”

They define a vacation rental 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” and a homestay as an “owner-occupied dwelling unit where a maximum of two short-term lodging rooms are provided for compensation.”

For the purposes of this guide, we are only focusing on the rules and regulations for Arroyo Grande vacation rentals. 

What Permits are Required to Operate a Vacation Rental?

To operate a vacation rental in Arroyo Grande, you’ll need to obtain both a Minor Use Permit – Plot Plan Review and a business license. 

How to Apply for a Minor Use Permit – Plot Plan Review

Applications can be submitted through the City’s Permit Portal. When you apply, select “Plot Plan Review” from the list of available planning permits. 

On submitting your application, you must include the following items for your application to be considered complete: 

  1. Payment of the required fee (the Citywide Master Fee Schedule lists the 2023-24 fee as $780)
  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
  5. Mailing labels with property owner mailing addresses for all properties within a 300′ radius of the rental property

How to Apply for an Arroyo Grande Business License

To apply for a business license in Arroyo Grande, you must complete and submit a business license application and pay the appropriate application fees at City Hall. 

You can find both the application form and fees on the City’s website here: Starting a Business in Arroyo Grande

Arroyo Grande: Notable Performance Standards

As mentioned, there are a few notable regulations you should be aware of regarding vacation rentals in Arroyo Grande: 

24/7 Contact Person/Entity 

A designated contact person/entity within a fifteen-minute drive must be available around the clock to address complaints. Failure to respond appropriately could lead to revocation proceedings.

Proximity Restrictions

It is prohibited to establish your vacation rental within 500 feet of another short-term rental or school. 

Limit on Approved Vacation Rentals 

As part of City Ordinance No. 718 (established October 22, 2022), the city’s total number of approved vacation rentals is capped at ninety (90). Any applications beyond this limit will be placed on a waiting list processed on a first-come-first-served basis. 

To inquire about the current number of approved vacation rentals, contact the Community Development Department at (805) 473-5420. 

Off-Street Parking Requirement

Two off-street parking spaces must be provided for rental guests and kept available for their use during their stay.

(It’s important to note that these standards only apply to vacation rentals approved after November 11, 2022. If you operate a vacation rental approved before that date, you’ll be subject to the performance standards outlined in City Ordinance No. 663.

SLO Coastal Zone Airbnb Rules & Regulations

Includes the unincorporated communities of Avila Beach, Cambria, and Cayucos.

The SLO Coastal Zone is known for its dramatic beach landscapes, historic piers, and wide selection of gourmet food and wine options. But is the area as friendly to short-term rental operators as it is to travelers? 

The short answer is yes (for example, there is no cap on the number of rentals like in Arroyo Grande). However, you’ll need to provide some pretty extensive documentation before setting up shop.  

SLO Coastal Zone: An Overview of the Basics

Government Links & Official Information

SLO County has created a detailed Short-Term Rental Guide covering the relevant ordinances for its Coastal Zone. Please don’t ignore this resource! It also provides detailed instructions on how to apply for all necessary permits, as well as graphics demonstrating the zoning requirements in each city.  

To ask questions or request more information, you can contact the SLO County Planning & Building Department at (805) 781-5600. 

What is Considered a Short-Term Rental in the SLO Coastal Zone?

Short-term rentals in the SLO Coastal Zone are called vacation rentals and are defined as the “use of an existing residence as a rental for transient use.” Like Arroyo Grande, this does not include the rental of the entire residence for thirty days or longer. 

Required Permits

To operate a Short Term Rental in the SLO Coastal Zone, you’ll need to obtain Zoning Clearance, a business license, and a Transient Occupancy Tax (TOT) Certificate if the property complies with Coastal Zone Land Use Ordinance Section 23.08.165

(This ordinance gives specific location standards for Cambria, Cayucos, and Avila Beach. However, those location standards can be modified through the approval of a Minor Use Permit.)

Application Process

When establishing a new residential vacation rental, you first need to contact the Permit Center in the Department of Planning and Building. A Permit Center Planner will provide the necessary forms to begin the application process and determine if your property qualifies for a Zoning Clearance or requires a Minor Use Permit. 

If a Zoning Clearance can be issued, you must apply for a county business license at the Tax Collector’s Office (the business license application can be found here). 

The Business License Clerk will process your application, and the Planning and Building Department will issue your required Zoning Clearance. Once your Zoning Clearance is issued, your business license will be issued upon payment of the license fee to the Tax Collector. 

What Does an Applicant for a Zoning Clearance Need to Provide?

  • Will Serve Letter – Evidence that the community water and/or sewer supplier(s) for the property have been informed of the use of the property as a vacation rental and have confirmed that there is adequate service capacity to accommodate the use.
  • Site Plan – A site plan showing the number and location of parking spaces available (within a garage, driveway, etc.) and the number of bedrooms in the vacation rental house.
  • Local Property Management – Verification (through contract or agreement, or designation of the owner if the owner lives locally) of who will provide local property management services. Services must be available 24 hours daily to respond to tenant and neighborhood concerns.
  • Proof of Notification – Provide the name, address, and telephone number of the local contact person to the Department of Planning and Building, the main County Sheriff’s Office, the local Fire Agency, and the local Sheriff Substation, as well as all property owners within 200 feet of the vacation rental. 

SLO Non-Coastal Zone Airbnb Rules & Regulations

The SLO Non-Coastal Zone includes the cities of Lake Nacimiento, Nipomo, Oceano, San Miguel, Santa Margarita, and Templeton

Relaxing seaside retreats aren’t the only thing SLO County is known for. From the beautiful Lake Nacimiento, a perfect spot for camping and fishing, to the vineyard-filled towns of San Miguel and Nipomo, the SLO Non-Coastal Zone has plenty to offer travelers. 

But despite its tourist-friendly appeal, the small size and spread-out nature of its towns can make finding the right STR information quite challenging. We’ve done our best to simplify the process for you below. 

SLO Non-Coastal Zone: An Overview of the Basics

Government Links & Official Information

Official ordinances and other important STR information for the SLO Non-Coastal Zone are on the County website’s Vacation Rentals Page. The page outlines the entire application process and provides contact information for each city department you’ll be dealing with. 

We recommend contacting the County Planning and Building Department at (805) 781-5600 if you have additional questions.

What is Considered a Short-Term Rental in the SLO Non-Coastal Zone?

Short-term rentals are primarily referred to as vacation rentals within the SLO Non-Costal Zone and are defined as any rental of an entire house for less than 30 days.

Permit Requirements

In the unincorporated areas of San Luis Obispo County (outside of any of the seven incorporated cities), all lodging businesses (including private home vacation rentals) must register for a County Business License and must collect a Transient Occupancy Tax (TOT, also called “bed tax” or “hotel tax”) and Tourism Marketing District (TMD) Assessment from their guests. 

These requirements apply whether your vacation rental property is rented directly by the owner, through a local property manager, or through a listing site such as airbnb.com, vrbo.com, homeway.com, craigslist.org, etc.

As of January 2024, the TOT rate across SLO County is 9%, and the TMD rate is 1.5%.

Application Process

Before a County Business License can be issued, you must receive a Land Use Authorization for your location. This can be obtained by visiting the County Planning and Building Department

Once you have received your Land Use Authorization from County Planning and Building, contact the County Tax Collector to receive your County Business License and Transient Occupancy Tax (TOT) Certificate. The business license requires a fee of $44, with the annual renewal fees being lower in subsequent years. 

You can reach the County Tax Collector by phone at (805) 781-5831 or visit them directly at 1055 Monterey St. Rm D-290, San Luis Obispo, CA (next to the Fremont Theater).

Atascadero Airbnb Rules & Regulations

Located right on Route 101 and just a 20-30 minute drive from the beaches of Morro Bay and Cayucos, it’s no surprise that tourism is alive and well in Atascadero. 

But its convenient placement is just one characteristic that makes this city an attractive destination for tourists and STR operators alike. It’s home to fun local attractions like the Charles Paddock Zoo and has a relatively simple short-term rental application process compared to other cities within SLO County. Keep reading for all the details. 

Atascadero: An Overview of the Basics

Government Links & Official Information

The City of Atascadero has put together a two-page Vacation Rentals Handout that includes general standards and steps to follow for licensing your vacation rental. Inside, you’ll also find a handy example of what a proper site plan should look like (this is part of the necessary documentation for obtaining a Home Occupation Business License).  

To ask questions or schedule an appointment with a planner at City Hall, you can reach the Community Development Department at (805) 461-5035.

What is Considered a Short-Term Rental in the Atascadero?

The City of Atascadero allows legally permitted residences, or rooms within residences, to be listed as vacation rentals (stays less than 30 days). 

Permit Requirements & Application Process

There is a two-step process for using your Atascadero home as a short-term rental: 

1) Register to collect City Transient Occupancy Taxes (TOTs)

For specific instructions on registering for TOTs, contact City Administrative Services by phone at (805) 470-3428 or by email at finance@atascadero.com

2) Obtain a Home Occupation Business License

You can download the license application and applicable fees here (the current fee for vacation rentals is $178). When submitting your application to the Community Development Department, you must include a: 

  • Site plan with property lines, structures, and a label for what structure the property rental is located in
  • Signed Home Occupation Conditions form (you can find this form at the end of the license application)

Once you’ve completed the above steps and your business license has been approved, Hdl (the City’s third-party administrator) will contact you to finalize the process.

Atascadero: Notable Performance Standards

Here are the most important performance standards you should be aware of when opening a vacation rental in Atascadero: 

  • Only one vacation rental per property is allowed
  • Only one party at a time may be accommodated per rental property
  • Following California State law, short-term rentals are NOT allowed in any Accessory Dwelling Unit (ADU) that received final occupancy on or after January 1, 2020
  • Vacation rentals are NOT allowed within unpermitted structures, recreational vehicles (RVs), or outside of a legally permitted residence

Grover Beach Airbnb Rules & Regulations

Due to its driveable seaside dunes, abundance of delicious eateries, and mild climate that offers over 270 days of sunshine per year, Grover Beach’s short-term rental market has exploded in recent years. 

However, more competition often leads to more complexity, and this is certainly the case regarding STRs in Grover Beach. It not only has some of the heaviest documentation requirements in SLO County, there’s also an active waitlist for acquiring a Non-Owner Occupied STR permit.

There’s no need to fret, though! We’ve broken down everything you need to know to cut through the complexity and open your Grover Beach short-term rental. 

Grover Beach: An Overview of the Basics

Government Links & Official Information

You can find official information regarding Grover Beach STRs on the Short Term Rentals page of the city website. It includes available permits and waitlist numbers, an outline of their application process, information on the Transient Occupancy and Tourism Marketing District taxes, and an extensive FAQ section. 

To ask questions, you can email the city directly at str@groverbeach.org or call them at (805) 473-4520.

What is Considered a Short-Term Rental in Grover Beach?

According to City Short-Term Rental Ordinance Section 4.10.185.B, short-term rental/vacation rental units can be located in a single-family dwelling or mobile home, multi-family dwellings, and dwellings within a mixed-use project. 

The City differentiates between Owner Occupied Short-Term Rentals and Non-Owner Occupied Short-Term Rentals. If you are staying overnight with your guests, your STR is considered “owner-occupied.” If you reside elsewhere during the stay, or your property is a 2nd home, your STR is considered “non-owner occupied.” 

There are distinct permits for both types of STR, and we’ve outlined the full requirements for each type below. 

How to Apply for an STR Permit in Grover Beach

All applications for STR permits must be submitted online through the City’s short-term rental permit registration and tax collection system. Click the option “Register for a short-term rental permit,” and you will be guided through the process. 

These are the fees for new short-term rental permits as of July 1, 2021:

  • Owner-Occupied: $210
  • Non-Owner Occupied: $322

General Requirements for both “Owner-Occupied” and “Non-Owner Occupied” STR Permits

The following information is required as part of the Grover Beach STR Permit application process, regardless of short-term rental type:

  • Applicant (Property Owner or Property Manager) information (name, mailing address, email address, and phone number)
  • A current title report will be required if the property has been purchased within one year of the application date.
  • Site address, including unit number/letter, if applicable. No P.O. Boxes will be accepted.
  • Site Plan, including locations of on-site parking spaces, electrical panels, water shut-off valves, and gas shut-off valves. 
  • If the site has more than one unit, indicate the location of the STR unit. You can find a sample site plan here
  • Floor Plan, including the uses of each room (i.e., living room, bedroom, bathroom, etc.). A floor plan example is available here
  • Number of bedrooms to be rented.
  • Copy of Conditions, Covenants, and Restrictions (CC&Rs), if applicable.
  • A checking account or credit card to pay permit fees and remit Transient Occupancy Taxes (TOT).
  • A good neighbor brochure should be linked to your rental listing.  

Additional Specific Requirements for “Owner-Occupied” STRs

There are two additional requirements if you’re applying for an Owner-Occupied STR permit: 

Additional Specific Requirements for “Non-Owner Occupied” STRs

If you’re applying for a Non-Owner Occupied STR permit, the following is required as well: 

  • Local Contract Information (name, mailing address, email address, and phone number).
  • After submitting the application materials, City staff will contact you to schedule an inspection of the proposed STR unit.
  • You are encouraged to review the inspection checklist and address any deficiencies before scheduling your inspection. 

Los Osos Airbnb Rules & Regulations

Largely a bedroom community for Sun Luis Obispo, the quiet seaside town of Los Osos has a somewhat complicated relationship with short-term rentals. While many residents have voiced concerns over the increasing number of rentals (with some even requesting an outright ban on all rental activity), the community has also recognized that STRs provide a valuable source of visitor accommodations.  

What does this mean for you as a potential STR operator? In short, you’ll have to comply with a healthy set of guidelines that aim to minimize any potential negative impacts STRs might have on residents. 

Los Osos: An Overview of the Basics

Government Links & Official Information

After months of public input and several meetings between the Los Osos Community Advisory Council and Land Use Committee, the community of Los Osos has developed a detailed list of short-term rental guidelines that can be found here: Vacation Rental Guidelines for Los Osos

If you have further questions, you can reach the Community Advisory Council by email at locacinfo@gmail.com or contact the SLO County Planning & Building Department at (805) 781-5600.

The Definition of an STR in Los Osos

The community of Los Osos defines a short-term rental (also referred to as a “vacation rental” or “VR”) as the use of a residential structure as a rental for transient use for a period under 30 days. 

Permit Requirements 

You must meet the following requirements to qualify for a vacation rental permit within Los Osos: 

  • Sunset Clause: VR permits shall expire automatically with the sale of a property.
  • Neighbor Notification: Neighbors must be notified when a permit application is first made. The notification range is a minimum of 9 lots on either side of the proposed VR property, including the other side of the street and to the rear of the proposed VR, or a minimum of a 500′ radius – whichever is least. 

(Applicants must use the County standard Notification Letter template and provide copies of the letters sent to property owners.)

  • Code Enforcement Inspections: Upon submitting a VR permit application, County code enforcement shall inspect the premises to ensure compliance with permit conditions as well as health and fire life safety code requirements.
  • Minor Use Permit: A minor use permit will continue to be required for proposed Vacation Rentals in Los Osos

Application Process

At this time, Los Osos has not provided any information regarding their vacation rental permit application process. 

Los Osos: Notable Performance Standards

To ensure that vacation rental activity respects community and neighborhood character, preserves housing stock, and mitigates negative impacts, the Los Osos Community Advisory Council has implemented the following guidelines: 

  • Density Control – There shall be a minimum of 9 lots between VR properties, including the other side of the street and to the rear of the proposed VR, or a minimum of a 500′ radius between properties (whichever is greater)
  • Cap on Total Number of VRs: Maximum of 1 VR per 100 single-family residences per neighborhood
  • Ownership Requirement: Limit of 1 VR per owner, and the owner can not be a corporation or partnership
  • Zoning Requirements: VRs are not allowed in Multi-Family Dwellings or Mobile Home Parks

Morro Bay Airbnb Rules & Regulations

Situated on a natural harbor, Morro Bay is home to some of California’s most scenic ocean views – not to mention the ancient Morro Rock and a vibrant ecosystem filled with marine wildlife! When you factor in its prime location off Highway 1, this seaside city looks like a dream spot for opening a short-term rental.

Here’s what you need to know to make that dream a reality…

Morro Bay: An Overview of the Basics

Government Links & Official Information

A copy of the current city ordinance on Morro Bay vacation rentals can be found here. The document outlines an amended set of regulations established in September 2019 and includes general and specific guidelines for all short-term vacation rentals within the city. 

For more information on STR guidelines, contact City Customer Support at (805) 339-2649. 

The Definition of an STR in Morro Bay

The City of Morro Bay refers to STRs as short-term vacation rentals and defines them as any “single-family dwelling, multi-family unit, bedroom of a primary residence, accessory dwelling unit, or junior accessory dwelling unit, which is rented to a guest for compensation for the purpose of lodging for a period of 30 or fewer consecutive days.”

Permit Requirements

Morro Bay requires all organizations operating within the City limits to have a current business tax certificate (commonly referred to as a business license).

All short-term vacation rental operators must also comply with the city’s Transient Occupancy Tax (TOT). According to City Ordinance No. 640, short-term vacation rentals must contribute a minimum of five hundred dollars of TOT annually to maintain a valid permit.

Obtaining a Morro Bay Business License

Applications for new business licenses and renewals of current business licenses can be processed online, by email, or by U.S. mail.

  • Online: Visit morrobay.hdlgov.com to complete and submit an electronic application, request a license renewal, and pay the fee
  • OR, scan and email your completed form to MorroBay@HdLGov.com
  • OR, mail the completed form to: City of Morro Bay, Business Support Center, 8839 N. Cedar Ave #212, Fresno, CA 93720

It takes approximately three weeks to process an application. Once your license is ready to be issued, the Business License Technician will notify you so you can pay the applicable fee

Short-Term Vacation Rental Permit Application Process

There is a two-step process for obtaining your permit: 

  1. Submit a completed application to the finance director on a form provided by the city. 
  2. Undergo an initial inspection and attach a completed inspection report to your application (once this initial inspection is complete, inspections will take place every four years thereafter)

Upon submission, the City will review your application and give you a response within 45 days. 

Morro Bay: Notable Performance Standards

You should be aware that Morro Bay has limited the maximum allowable number of full-home STRs in residential zones to 175. This limit does not apply to homeshare vacation rentals.

Paso Robles Airbnb Rules & Regulations

Known as a community of cowboys and innovators, the city of Paso Robles is the perfect escape for travelers looking to indulge in delicious wine, world-class eateries, or a relaxing dip in a therapeutic hot spring. 

As you’ll see below, it’s also one of the most well-organized cities in SLO County when it comes to helping you navigate the short-term rental market.  

Paso Robles: An Overview of the Basics

Government Links & Official Information

You can find all relevant STR information on the City’s Short-Term Rentals page, one of the most easy-to-navigate city resources we’ve encountered. It includes links to their permit application packet and city ordinances, and an updated table showing the current number of permits available within Paso Robles.  

For more information or to ask questions, you can contact the Community Development/Planning Department at (805) 237-3970 or str@prcity.com

What is Considered a Short-Term Rental in Paso Robles?

Similar to other cities in SLO County, Paso Robles often refers to short-term rentals as vacation rentals, and defines them as the “rental of a residential unit for a period of less than 30 days.”

Permit Requirements

To operate a short-term rental in Paso Robles  – whether it’s a homeshare or non-hosted accommodation – you will need both a short-term rental permit and a business license tax certificate.

Application Process

Note: Non-hosted short-term rental permits are now at capacity. New applications for non-hosted short-term rental permits received by the City will be placed on a waiting list until a permit becomes available. However, there is no limit to the number of permits for homeshares, where an owner lives on the property and rents a portion as a short-term rental.

To apply for a short-term rental permit, you’ll need to email a completed application to str@prcity.com. A copy of the City’s application packet is available here, along with a full list of required documentation when submitting your application. 

When applying, you will have to pay a non-refundable application fee (3-year term) of: 

  • $300 for a one-bedroom homeshare 
  • $550 for a two or more-bedroom homeshare
  • $550 for a non-hosted accommodation

You can apply for a business license online or download the license application and submit it directly to the Administrative Services office located at 821 Pine Street, Suite A. 

Paso Robles: Notable Performance Standards

A full list of STR performance standards can be found in City Ordinance No. 1120 N.S. However, there are two important standards you should be aware of upfront: 

Non-Hosted Accommodation Separation Requirement – For properties located in the R-1 Single-family residential zone, there must be 100 feet between units in properties. 

Short-Term Rental Parking and Occupancy Limits – The City has implemented both minimum parking requirements and limits on the maximum number of occupants depending on the number of bedrooms in the property.

Pismo Beach Airbnb Rules & Regulations

Ask anyone visiting SLO County, and there’s a good chance Pismo Beach is on their itinerary. Unfortunately for aspiring STR owners, this classic beach town’s popularity with travelers has led to a recent moratorium on new short-term rentals within the city. 

Unless you have a valid short-term rental license issued before December 5, 2023, you won’t be able to enter the Pismo Beach STR market just yet. This restriction likely won’t last forever, though, and we’ve outlined everything you need to know if and when the City starts issuing new licenses again. 

Pismo Beach: An Overview of the Basics

Government Links & Official Information

The City of Pismo Beach website has a detailed short-term rentals page that provides their permit requirements and application process, a current list of approved STRs, links to relevant resources, and plenty of helpful FAQs.

To ask any additional questions, you can reach the Planning Division of the Community Development Department at (805) 773-4658. 

What is Considered an STR in Pismo Beach?

Pismo Beach defines short-term rentals (STRs) as the rental of a detached single-family residence or accessory dwelling unit for less than 30 consecutive days where the primary residence is not being concurrently occupied by the owner. 

Application Process

On November 7, 2023, the Pismo Beach City Council adopted an Ordinance (O-2023-006) precluding the issuance of new short-term rental licenses in the City. Only those licenses issued by December 5, 2023 (the ordinance’s effective date) are considered valid licenses. 

While new licenses are not available at the moment, here is a brief overview of the steps you need to take should this policy change: 

  1. Apply for an STR permit – Submit a completed application, a $445 application fee, and a $207 mailing service fee to the Community Development department. Your application should include the following attachments:
    1. Site Plan with dimensions
    2. Floor Plan with dimensions
    3. Primary Residence documentation (see application for options)
  2. STR Inspection – The City will conduct an inspection to confirm bedroom count, on-site parking, and safety standards. Refer to the Inspector’s Checklist to ensure you are up to code. 
  3. Public Courtesy Notice – You must notify property owners within 300 feet of the property about your intent to operate an STR. The notice should include the property owner’s and responsible party’s contact information. 
  4. Apply for a Business License – Applications can submitted online. Once approved, you will need to pay a business license fee. For fee information, contact the Finance Department at (805) 773-4655.
  5. Obtain a TOT Certificate of Authority – Finance will issue the certificate and provide the necessary information for submitting TOT/LBID/TMD
  6. Annual Monitoring Information – You will need to submit proof of primary residency on an annual basis. 

Pismo Beach: Notable Performance Standards

The City requires that all occupants of STRs adhere to the Good Neighbor Policy – a list of 10 guidelines intended to minimize the impacts of STRs on residential neighborhoods. A copy of the Good Neighbor Policy is available in Section D. of the Short Term Renal License Application

San Luis Obispo Airbnb Rules & Regulations

Our last stop in this guide is the vibrant San Luis Obispo. Characterized by a mix of historic charm and youthful college energy, SLO County’s most populated city has a notable ban on non-owner occupied vacation rentals. 

But this ban hasn’t stopped the local STR market from seeing rapid growth in recent years. And if you’re looking to rent out a room or two in your primary residence, it’s not too late to take advantage of the growing demand for STRs in the city. 

San Luis Obispo: An Overview of the Basics

Government Links & Official Information

For official information on operating short-term rentals within San Luis Obispo, you can refer to the City’s Rental Permits page. It gives a brief overview of their permit application process and Transient Occupancy Tax (TOT) policy. The City has also put together a one-page “Homestay How-To Guide,” which you can find here

For more questions, you can contact the Community Development Department at (805) 781-7170. 

The Definition of an STR in San Luis Obispo: Homestays vs. Vacation Rentals

The city of San Luis Obispo refers to STRs as “homestays” and defines them as owner-occupied dwelling units where bedrooms are provided for compensation for fewer than thirty consecutive days with a maximum of four adult overnight guests. 

In contrast to most areas in SLO county, “vacation rentals” (the rental of a non-owner occupied dwelling) are not allowed within San Luis Obispo City. 

Permit Requirements

All operators of homestay within the city must have a homestay permit. To obtain one, you’ll need to meet the following requirements:  

  • A valid business license – This can be obtained during the permit application process. 
  • Payment of Transient Occupancy Tax (TOT)
  • Owner occupancy – Verify that the homestay is occurring at the property owner’s primary residence.
  • Maximum number of guests – Overnight guests are limited to no more than four adults. 
  • Designating a responsible party – A responsible party must be designated in case the property owner is unavailable during a rental. 
  • Limitation of use of accessory structures – Homestays are not permitted within recreational vehicles or within accessory dwelling units.

Homestay Permit Application Process

You can pick up an application packet in the Community Development Department office at 919 Palm Street. Submit your completed application to the same office, remembering to bring: 

  • A copy of your tax bill indicating the homeowner’s exemption at the property of other documentation
  • Site plan
  • Application fee payment (fee varies)
  • Business license payment (fee varies)

You should receive an approval letter for your Homestay rental after 3-4 weeks, with your business license following separately. Once you start hosting, you will be required to report Transient Occupancy Tax to the city’s Finance Department.

Now It’s Time to Start Hosting!

We know how easy it is to get overwhelmed by the complexities of short-term rental regulations, and we hope this guide has helped simplify the process of navigating SLO County’s diverse STR market.

To wrap things up, here are a few quick tips to empower your Airbnb hosting efforts: 

1. Stay Informed

As you’ve seen in this guide, city governments constantly reevaluate their policies around short-term rentals. We’ve done our best to give you the most up-to-date information available, but it’s important to “keep your finger on the pulse” and stay informed about any changes in your city’s regulations.

2. Take Advantage of City/County Resources

Use all the city website pages, handouts, and resources we’ve linked to in this guide. While not always perfect, most SLO County cities have tried to make the information you need as accessible as possible. 

And when in doubt…

3. Don’t Be Afraid to Ask for Professional Help

Whether you’re short on time, have questions about your STR’s compliance with local regulations, or want someone to walk you through the permit application process, there’s no shame in asking for help. 

That’s the whole reason Freedom & Fortune exists – to help property owners like you get their short-term rentals off the ground with as little stress as possible. It’s also why we offer such a wide range of services, including assistance with legal/regulatory compliance, help with property acquisition, and 24/7 guest support.

So please don’t hesitate to send us a question or schedule a free consultation with our team. All you have to do is fill out a form and we’ll get back to you shortly. 

Thanks for reading, and we look forward to hearing from you!

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