Updated 6/29/24
Why Santa Cruz County, California is a Top Choice for Vacation Rental Investments
If you're considering investing in a vacation rental property, Santa Cruz County, California should be at the top of your list. This endeavor can be a lucrative investment opportunity that also provides a relaxing getaway. The benefits are numerous, but that is an article for another time.
Understanding Short-Term Rentals
Let's start with what a short term rental is. A short-term rental (STR) is lodging on private property defined by a stay that lasts no more than 30 days. When considering becoming a short-term rental host, it is important to know the laws and regulations in your city and/or county, as well as your homeowners association if applicable.
The following article is not exhaustive, but it should give you a good start in understanding important considerations for hosting a short-term rental in the Santa Cruz County area.
Santa Cruz County Geography
Santa Cruz County is broken up into various areas and jurisdictions. In the area there are four incorporated areas (or cities):
- Santa Cruz
- Scotts Valley
- Capitola
- Watsonville
The county jurisdiction (unincorporated Santa Cruz County) is divided into zones:
- Live Oak Designated Area (LODA)
- Seacliff / Aptos / La Selva Beach Designated Area (SALSDA)
- Davenport / Swanton Designated Area (DASDA)
See further below for additional area information
City Jurisdiction
CITY OF SANTA CRUZ
A total of 250 owner-occupied/hosted STR permits are available on a first come, first served basis.
Properties with a single-family home and an Accessory Dwelling Unit (ADU) are not approved to receive an STR permit for either the single-family home or the ADU.
The City is not issuing new Non-Hosted/non-owner occupied STR permits or Accessory Dwelling Unit STR permits.
Visit the City of Santa Cruz website to learn more about:
- Eligibility
- How to Apply
- Required Documents
- Application Process
- Homes with ADUs
- Hosting Platforms
SCOTTS VALLEY
The City of Scotts Valley does not allow for vacation rentals as it is not a permitted nor conditionally permitted use in the City’s Zoning Code.
CAPITOLA
The City of Capitola has established an area (the VRU or Vacation Rental Use overlay district) where vacation rentals may be operated. If your home is located within this area your property may be operated as a vacation rental. This area consists of the Capitola Village, Riverview Avenue as far north as city hall, as far west as Cliff Drive, as far east as Monterey Avenue, and as far south as Capitola Beach, as shown in the image below.
Homes located outside this area may NOT be rented as vacation rentals. Homes outside the VRU may only be operated as “Long-term Rentals”. Long-term Rentals must be rented for 30 nights or more.
Visit the City of Capitola website to learn more about:
- Submittal Requirements
- Process
- Ongoing Documentation
WATSONVILLE
Information coming soon.
Unincorporated Santa Cruz County
In this area there are two types of short-term rentals: vacation rentals and hosted rentals. The short-term rental of an entire home requires a Vacation Rental Permit per County Code Section 13.10.694, most recently updated by Ordinances 5264 and 5265. Short-term rentals of one or two rooms in a home requires a Hosted Rental Permit per County Code Section 13.10.690. Both permits are valid for five years.
Short-term rentals are allowed in all zone districts that allow residential use by itself. Vacation rentals are allowed in single-family homes, duplexes or triplexes. For the later two, it is important to reference the homeowner association rules if applicable.
County jurisdiction is broken down into zones:
- Live Oak Designated Area (LODA) - Waitlisted
- 280 total vacation rental permits; 262 vacation rental permits and 18 hosted rental permits.
- Only 15% of total parcels may have short term rental permits.
- Short term rental permits limited to 20% of residential use parcels per block
- Seacliff / Aptos / La Selva Beach Designated Area (SALSDA) - Waitlisted
- 286 total vacation rental permits; 241 vacation rental permits and 45 hosted rental permits
- Only 15% of total parcels may have short term rental permits.
- Short term rental permits limited to 20% of residential use parcels per block
- Davenport / Swanton Designated Area (DASDA) - Waitlisted
- 7 total vacation rental permits; 3 vacation rental permits and 4 hosted rental permits
- Only 10% of total parcels may have short term rental permits
- Short term rental permits limited to 20% of residential use parcels per block
Non-Designated areas of Santa Cruz County: 183 total hosted vacation rental permits.
- Rio Del Mar - Currently no waitlist and no permit restrictions
- South of Santa Cruz Harbor to Opal Cliffs into Live Oak - Currently no primary residence restriction or waitlist
Visit the Santa Cruz County website to learn more.
As a local realtor, I cannot provide legal advice, but am able to provide guidance and useful resources that may better help you understand relevant laws and regulations in Santa Cruz County.
If you have questions, it is recommended you connect with the relevant City or County planning department.
More questions about real estate in Santa Cruz County?
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Vacation Rental Investments In Santa Cruz County: The Ultimate Guide
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