Under the City of Morro Bay’s Short Term Rental Ordinance, a sign like this one on Beachcomber Drive is required to be posted outside all licensed vacation rentals in town. Photo by Neil Farrell
The City of Morro Bay is well into an effort to check on and crackdown on unpermitted vacation rentals, enforcing an ordinance the City Council passed 4-years ago.
According to a notice from the City, “On Nov. 1, 2024, the City of Morro Bay will begin sending enforcement letters to owners and operators of non-compliant and partially compliant short-term rentals in the city limits.”
The enforcement comes as the question has arisen just how many VRs are operating in the City, versus how many are actually permitted to operate. It stems from a law that was passed to regulate them and limit how many rental homes in town can go the high-return, short-term rental path.
“The City of Morro Bay,” reads the notice, “adopted a Short-Term Rental Ordinance that allows property owners to operate STRs in the City Limits, provided they comply with permit requirements and standards to minimize neighborhood impacts. The STR Ordinance requires property owners to obtain an STR permit, business license, and Transient Occupancy Tax (TOT) account prior to operating an STR. These permits are subject to annual renewal and inspections every four years.”
The law also includes a buffer between VRs of 175 feet, and a 175-cap on VR permits for so-called “full home” rentals, meaning that the properties don’t have owners on site, such as one might find in an Air BnB rental, where a homeowner takes in short-term tenants, sharing their homes.
But some people who own second homes in Morro Bay or investment homes, don’t always follow the rules, especially if they can’t get a permit because they are all taken up, which is what happened quickly after the first iteration of this law set the limit at 250.
In its final vote, the City Council set the limit at 175, as a small concession to a community that finds itself with a serious lack of available, long-term (monthly) rental housing. As it stands now, the City is not issuing any more VR permits “for full-home short-term vacation rentals in a residential zone,” “until the number of active permits drop below 175.”
About 2-years ago, the City hired a consultant, HdL, which used special software that identifies all VRs actively advertising and renting on online platforms (AirBnB, VRBO, etc.), to locate listings in Morro Bay.
The planning department has taken that information and compared it to its own records. They’ve now sent notices to these extra VRs about their non-compliance and the significant penalties that come with skirting the law.
“Illegally operating STRs,” the City warned, “will be required to immediately cease operation; are liable for the last three years of unpaid TOT; and may face fines of up to $500 per day of non-compliance.
“At the same time, the City will identify active STRs that are partially compliant, meaning they are operating with expired business licenses or TOT accounts. The City may authorize a partially compliant STR to continue operation once they renew their permits and pay applicable back taxes.”
Going forward, the City said it would more closely enforce the ordinance, starting Jan. 1. These letters went out last Nov. 4.
“In a parallel effort,” the notice said, “the City will require all STR permit holders to renew their permits, as required by the STR Ordinance. This will involve completion of a renewal application and City inspection to verify compliance with applicable standards, including, but not limited to, parking and signage requirements.”
This is not the first time the City has made special efforts to enforce certain laws. In the past, more than once actually, the City has tried to crack down on its sign ordinance, in particular the sandwich board signs that can be seen all over town on sidewalks outside businesses.
Technically, those are not allowed by the city’s sign ordinance, along with the large “feather” signs and the inflatable Tube Man signs normally signifying some sort of special deal at the store.
But after the signs are removed, citing public safety as the reason, they disappear for a time but seem to creep their way back out on the sidewalk.
If readers would like to know more about the City’s Short Term Rental Ordinance, see the webpage on the City’s website at: www.morrobayca.gov/1085/Short-Term-Vacation-Rentals.