Short‑Term Rentals: Monterey City vs County Rules, Explained

Thinking about buying a home or small inn to use as a short‑term rental in the Monterey area? You are not alone. With steady visitor demand and a range of property types, the opportunity is real, but so are the rules. In Monterey, what you can do depends first on whether your property sits inside the City of Monterey or in unincorporated Monterey County.

This guide explains the difference between city and county rules for stays under 30 days, shows you what to verify, and gives you a simple checklist to follow before you write an offer. You will see the common permit elements, typical pitfalls, and the agencies to call for the latest requirements. Let’s dive in.

City vs county: what changes

Jurisdiction decides the rules

Your first step is to confirm whether the property is inside City of Monterey limits or in unincorporated Monterey County. Incorporated parcels follow the city municipal code and city departments. Unincorporated parcels follow county rules set by the Board of Supervisors and managed by county departments. If the address is near a boundary, double check, since mailing addresses can be misleading.

Coastal and overlays add layers

Many coastal parcels fall under a Local Coastal Program and may involve the California Coastal Commission. Coastal policies can require extra permits or add conditions to protect coastal resources. You should also check for special overlays such as historic districts, downtown areas, or wildfire zones that can affect your permit path. These layers sit on top of basic zoning and can change timelines and requirements.

City of Monterey: what to verify

Zoning and permit type

Confirm how the city classifies short‑term rentals for your use case. Cities often separate owner‑occupied homestays, accessory units, whole‑home non‑owner‑occupied rentals, and bed and breakfast inns. Each use can fall under a different permit type such as registration, a business license plus a specific STR permit, or a conditional use permit. Ask Planning whether your zoning district allows STRs, allows them with a permit, or prohibits them.

Owner‑occupied vs whole‑home

Many cities create a lighter path for owner‑occupied homestays where the owner lives on site. Whole‑home, non‑owner‑occupied rentals usually face tighter limits. Ask if there are night caps, minimum stay rules, or annual limits. Get clarity on whether an accessory dwelling unit can be used for short‑term stays or only for long‑term tenants.

Business license and TOT

Plan on a city business license and registering for Transient Occupancy Tax. Ask the City Treasurer or Finance office about the current TOT rate, how to file returns, and whether platforms collect and remit on your behalf. Some jurisdictions require a local registration number on all listings, so check formatting rules before you publish.

Safety, parking, and neighbors

Expect requirements for smoke and carbon monoxide detectors, fire extinguishers, safe egress, and possibly a fire inspection. Parking plans are common, and you may need to show off‑street spaces or set guest parking limits. Most programs require a 24‑7 local contact who can respond quickly to complaints. Know the city’s quiet hours and amplified noise rules before you open your calendar.

Enforcement and inspections

Cities use inspections, complaint follow up, and administrative fines to enforce rules. Repeat violations can lead to permit suspension or revocation. Ask Planning and Code Enforcement about their typical response times, common neighborhood concerns, and what will trigger a hearing.

Unincorporated County: key checkpoints

Zoning and permit structure

In unincorporated areas, Monterey County Planning and Building will confirm whether your zone allows STRs, allows them with a conditional use permit, or prohibits them. The county may distinguish owner‑occupied homestays from whole‑home rentals. Your path could be a simple registration or a public hearing for a conditional use permit. Make sure you know which track applies to your parcel.

Coastal zone and LCP

If the property sits in the coastal zone, the county’s Local Coastal Program and the California Coastal Commission can add permits and conditions. Coastal communities often have tighter rules or additional scrutiny. This can affect your timeline, especially in places like Big Sur or other sensitive coastal areas. Plan for extra review if you are near the shoreline or scenic corridors.

Caps, moratoria, timelines

Counties may set caps on permits, pause new applications, or limit STRs by neighborhood. Ask if there is a current quota, a moratorium, or a waiting list. Clarify expected timelines, especially if public hearings or coastal permits are involved. Build these steps into your offer and due diligence periods.

Taxes, safety, enforcement

Register for county Transient Occupancy Tax and confirm reporting cycles. Expect safety standards similar to the city, though rural and wildfire‑prone areas may require additional clearance or emergency access measures. County enforcement also relies on fines, hearings, and potential permit revocation for repeat violations.

Step‑by‑step buyer checklist

1. Confirm legal jurisdiction

• Use county assessor or GIS tools to see if the parcel is inside City of Monterey, another city, or unincorporated Monterey County. If near a city boundary, confirm with both city and county staff.

2. Check zoning and land‑use designation

• Verify your zoning district. Ask about overlay zones, including coastal, historic, downtown, floodplain, or wildfire. Make sure STRs are allowed or conditionally allowed for your use type.

3. Determine the STR program and permit type

• Identify the exact path for your scenario: simple registration, an STR‑specific permit, a bed and breakfast license, or a conditional use permit. Confirm if owner‑occupied homestays have a different path than non‑owner‑occupied rentals.

4. Check caps, quotas, moratoria, pending rules

• Ask if the city or county has a cap, a neighborhood quota, or a temporary pause on new permits. If so, learn how the waiting list works.

5. Confirm operating limits

• Clarify owner‑occupancy requirements, minimum or maximum stay lengths, guest counts, parking rules, noise limits, and whether platforms can list unpermitted rentals. Note any requirement for a 24‑7 local contact or an on‑site manager.

6. Calculate taxes and business obligations

• Register for Transient Occupancy Tax and learn the current rate. Ask about business licensing and whether your listing must show a registration number.

7. Confirm safety, inspections, and insurance

• List required safety devices and inspections. In rural or wildfire zones, ask about fire clearance. Call your insurer to confirm coverage for STR use or get a specialty policy.

8. Check private restrictions

• Review CC&Rs and HOA rules. Many HOAs prohibit or restrict STRs. For condos, check association policies and any short‑term rental clauses in leases.

9. Review finance and underwriting

• Some lenders restrict STR use. Confirm mortgage terms, insurance, and whether you can count STR income. Model revenue after taxes, fees, insurance, and occupancy limits.

10. Assess enforcement risk and neighbor relations

• Ask about common complaints in the area and what response times are required for contacts or managers. Plan guest rules that reduce noise, parking conflicts, and trash issues.

Who to call first

• City of Monterey Planning Division or Community Development for zoning and permit steps inside city limits.
• City of Monterey Treasurer or Finance for business license and TOT setup inside city limits.
• City Code Enforcement or Police non‑emergency for complaint thresholds and enforcement process.
• Monterey County Planning and Building for zoning, permit path, and Local Coastal Program in unincorporated areas.
• Monterey County Treasurer–Tax Collector for county TOT registration and reporting.
• Monterey County Fire Department or Fire Marshal for fire safety, defensible space, and inspection questions.
• California Coastal Commission for coastal zone permits when applicable.

Questions to ask the seller

• Has this property ever operated as a short‑term rental, and if so, which permits were issued and when?
• Are there any open code cases, past citations, or neighbor complaints related to rental activity?
• Can you provide business license, TOT registration records, and STR permit documentation if applicable?
• What do the CC&Rs and HOA rules say about short‑term rentals or minimum lease terms?
• Are there site plans or documentation for parking, fire safety upgrades, and prior inspections?

Planning for risk and timelines

Short‑term rentals are sensitive in a destination market like Monterey. Neighborhood impacts like noise, parking, and traffic often shape policy and enforcement. That means rules can shift, and permit quotas or moratoria can appear with little notice. Build time into your due diligence for staff consultations, hearings, and inspections.

Rural and coastal parcels often add complexity. Fire safety, emergency access, and coastal resource protections can add conditions that affect guest capacity or operating dates. If your model depends on peak season revenue, stress test your numbers for possible caps, shoulder season demand, and inspection or permit delays.

Alternatives to consider

• Long‑term rental at 30 days or more often follows a simpler path and is usually outside STR rules.
• Owner‑occupied bed and breakfast or homestay may have a different licensing route and could face fewer limits than a non‑owner‑occupied rental.
• Accessory dwelling units rented long term can provide steady income and are often encouraged by state housing policy.

Ready to evaluate a property?

If you are weighing a home, a village inn, or a mixed‑use property for short‑term lodging, you deserve local guidance that blends residential, rural, and hospitality insight. Our team works across Carmel Valley, Monterey, and the Peninsula, and we understand how zoning, coastal policy, and neighborhood context shape value. Let’s map your options, estimate timelines and costs, and position your offer to succeed.

If you are ready to explore the market or want to confirm what is possible on a specific parcel, connect with our team at Unknown Company and Request a Home Valuation. We will help you build a clear plan that fits your goals and the rules on the ground.

FAQs

Do Monterey City and County STR tax rates differ?

• Yes, Transient Occupancy Tax is administered locally, so city and county rates and reporting can differ. Confirm the current rate and filing steps with the correct treasurer or tax office.

Can an HOA ban short‑term rentals if the city or county allows them?

• Yes, private CC&Rs and HOA rules can prohibit or restrict STRs regardless of local government allowances, and they are enforced independently.

Are owner‑occupied homestays treated differently than whole‑home rentals?

• Often yes. Many programs provide a different, sometimes simpler path for owner‑occupied homestays. Confirm the definitions, limits, and permit type before you buy.

Do Airbnb or VRBO enforce local registration rules in Monterey?

• Some platforms require a local registration or tax number and may block unregistered listings, but policies vary. You remain responsible for compliance and tax remittance.

What extra rules apply in the coastal zone around Monterey County?

• Coastal zone parcels may require permits under the Local Coastal Program and can face added conditions or restrictions. Contact county planning and the Coastal Commission early.

What happens if I operate without the right STR permit?

• Expect escalating enforcement such as fines, hearings, and possible permit suspension or revocation for repeat violations. Serious or repeated cases can lead to stronger penalties.