Overview

Yes, short-term rentals (STRs) are allowed in Los Osos, California, but under strict regulations and limitations. Los Osos has implemented specific standards to manage vacation rentals while balancing community concerns about neighborhood impacts and housing stock preservation. The County approved an ordinance that includes a cap on the total number of vacation rentals (55 within the Los Osos Urban Reserve Line), density restrictions, and other performance standards.

As of July 2022, the Los Osos VR ordinance is in effect after certification by the California Coastal Commission. The ordinance aims to avoid over-concentration of vacation rentals in residential neighborhoods and includes specific water conservation requirements for new rentals.

How to Start a Short-Term Rental Business in Los Osos

Starting a short-term rental business in Los Osos requires navigating a structured application process that includes community input, regulatory compliance, and inspections. Here's a step-by-step guide to get started:

1. Verify Eligibility

Before applying, confirm that your property meets the basic eligibility requirements:

• Your property must be an existing single-family dwelling (multi-family structures and mobilehomes are prohibited)
• Your property must be located within the Los Osos Urban Reserve Line
• You must be able to comply with all density, separation, and other standards
• You must have adequate water and sewer service (evidenced by a "will-serve" letter)

2. Submit Application and Obtain Permits

• Apply for a Minor Use Permit through the County Planning & Building Department
• Submit a complete application that includes all required documents
• Be prepared to go through a hearing process as this is not an over-the-counter permit
• Complete required inspections by County code enforcement to ensure compliance with safety codes

3. Fulfill Community Notification Requirements

• Notify neighbors when you first submit your application
• Use the County standard notification letter template
• Mail notification to property owners within the required radius (see specific regulations below)
• Provide copies of the letters sent to all property owners as part of your application

4. Complete Final Steps

• Pay all required fees (application fees and annual business license fees)
• Obtain your County business license from the Tax Collector
• Register for Transient Occupancy Tax (TOT) collection

Required Documents, Permits, Licenses, and Guidelines

Permits

1. Minor Use Permit

   • Required for all new vacation rentals in Los Osos
   • Not an over-the-counter permit; requires hearing process
   • Application available through the County Planning & Building Department

2. County Business License

   • Required to operate any vacation rental in SLO County
   • Obtain through the Tax Collector after receiving land use authorization
   • Annual renewal required

3. Transient Occupancy Tax (TOT) Certificate

   • Required to collect and remit the 9% TOT
   • Obtained through the County Tax Collector after business license approval

Required Documents

1. Will-Serve Letter

   • Evidence that your water and/or sewer supplier has been informed of the vacation rental use
   • Confirmation that there is adequate service capacity for the use

2. Site Plan

   • Showing property lines and structures
   • Number and location of parking spaces
   • Number of bedrooms in the vacation rental

3. Floor Plan

   • Showing the uses of each room
   • Especially highlighting bedroom count

4. Neighbor Notification Proof

   • Copies of notification letters sent to property owners
   • Must use County standard template
   • Notify within required radius (9 lots or 500', whichever is greater)

5. Water Conservation Notices

   • Minimum of one water conservation sign per restroom and kitchen
   • Required for new residential vacation rentals per Coastal Commission modification

6. Local Contact Information

   • Name, address, and phone number of local contact person
   • Must be available 24 hours daily to respond to tenant and neighborhood concerns
   • Submit to County Planning & Building and other local agencies

7. Evidence of Local Property Management

   • Verification (through contract or agreement) of local property management services
   • If owner lives locally, can serve as their own manager

Fees

• Application fee for Minor Use Permit (amount varies)
• County business license fee ($44 annually, with lower renewal fees in subsequent years)
• Administrative fees to help fund enforcement of vacation rental regulations

Specific Regulations for Short-Term Rentals in Los Osos

Permitting Standards

1. Sunset Clause

   • VR permits expire automatically with the sale of the property
   • Prevents permits from becoming commodities detached from property ownership

2. Neighborhood Notification

   • Mandatory notification when permit application is first made
   • Minimum notification radius is the greater of: a) 9 lots on either side of the proposed VR property (including other side of street and to rear), or b) 500-foot radius

3. Code Enforcement Inspections

   • County code enforcement inspects premises upon application submission
   • Ensures compliance with permit conditions and health/fire/life safety code requirements

Density and Zoning Restrictions

1. Density Control

   • Minimum of 9 lots between VR properties (including other side of street and rear)
   • OR minimum 500-foot radius between properties, whichever is greater

2. Total Cap

   • Maximum of 1 VR per 100 single-family residences per neighborhood
   • Total cap of 55 VRs within the Los Osos Urban Reserve Line

3. Zoning Requirements

   • VRs only allowed in existing single-family dwellings
   • NOT allowed in multi-family dwelling structures
   • NOT allowed in mobilehomes

4. Ownership Limitations

   • Limit of 1 VR per owner
   • Owner cannot be a corporation or partnership

5. Separation Requirements

   • No residential vacation rental shall be located within 500 feet of another parcel with a residential vacation rental and/or other visitor-serving accommodation
   • Distances measured from closest property line to closest property line

Operational Standards

1. Water Conservation

   • Water conservation signs required in each restroom and kitchen of new VRs
   • Encourage occupants to reduce water usage

2. Local Contact Requirement

   • 24/7 local contact person/entity within 15-minute drive
   • Available to respond to tenant and neighborhood concerns
   • Failure to respond appropriately could lead to permit revocation

3. Noise Restrictions

   • Quiet hours between 10 PM and 7 AM (county-wide regulation)

4. Occupancy Limits

   • Maximum of 2 persons per bedroom plus 2 additional persons per property (county-wide)

5. Parking Requirements

   • Must provide adequate on-site parking
   • Consider the potential for increased vehicle traffic in residential neighborhoods

Enforcement Issues

• Enforcement of regulations is inconsistent due to insufficient staffing and resources
• Code enforcement and sheriff's department often unable to respond in a timely manner
• Administrative fees help fund enforcement activities

Contact Information

Los Osos Community Advisory Council (LOCAC)

• Email: locacinfo@gmail.com

SLO County Planning & Building Department

• Phone: (805) 781-5600
• Address: County Government Center, 1055 Monterey St., San Luis Obispo, CA

County Planning Contact (Planners)

• Cory Hahn (Senior Planner): chanh@co.slo.ca.us

SLO County Tax Collector

• Phone: (805) 781-5831
• Address: 1055 Monterey St. Rm D-290, San Luis Obispo, CA (next to the Fremont Theater)

For General STR Information in SLO County

• Vacation Rentals Page: https://www.slocounty.ca.gov/departments/auditor-controller-treasurer-tax-collector/public-/tax-collector/services/licensing-vacation-rentals.aspx

Links to Source Pages

1. Los Osos Vacation Rental Guidelines (LOCAC): https://www.slocounty.ca.gov/departments/planning-building/forms-documents/plans-and-elements/community-plans/los-osos-community-plan-update-files-513413e6e2b932dffc1fb3953e4a2d6c/residential-vacation-rentals-ordinance/los-osos-vr-guidelines-final-062818.pdf

2. County of San Luis Obispo Proposed Amendments to Title 23: https://www.slocounty.ca.gov/departments/planning-building/forms-documents/plans-and-elements/community-plans/los-osos-community-plan-update-files-513413e6e2b932dffc1fb3953e4a2d6c/residential-vacation-rentals-ordinance/lrp2020-00005-residential-vacation-rentals-ordinan.pdf

3. "Sups. Approve Los Osos VR Ordinance" Estero Bay News: https://esterobaynews.com/featured-stories/sups-approve-los-osos-vr-ordinance/

4. "Navigating Airbnb Short-Term Rental Regulations in San Luis Obispo County": https://freedomandfortune.co/short-term-rental-rules-san-luis-obispo-county/

5. "Los Osos, California Airbnb Management Overview": https://www.gosummer.com/vacation-rental-management/los-osos-california

Important Considerations for STR Investors

As an STR investor in Los Osos, it's important to understand that this market operates under strict regulations compared to many other coastal areas in California. The combination of community-driven guidelines, the Coastal Commission oversight, and the unique water situation in Los Osos creates a regulatory environment that is both complex and protective of community character.

Key considerations include:

1. Housing Stock Impact: Los Osos has a limited housing supply due to building moratoriums tied to water resource constraints. This makes the community particularly sensitive to conversions of long-term rentals to vacation rentals.

2. Community Character: The ordinance aims to preserve Los Osos' residential character, which is why density restrictions, ownership limitations, and zoning requirements are so strict.

3. Enforcement Challenges: While regulations exist, enforcement can be inconsistent due to resource limitations. Investors should be prepared to self-regulate and maintain good relationships with neighbors.

4. Permit Limitations: With a cap of 55 total VRs within the Los Osos Urban Reserve Line, and the requirement that permits expire with property sale, wait lists may develop as the market matures.

5. Water Conservation: As part of California ongoing drought concerns, Los Osos VRs must include visible water conservation messaging and comply with water-saving requirements.

For current information on permit availability and application requirements, investors should contact the SLO County Planning & Building Department directly.

Remember that regulations for STRs in California are constantly evolving. Stay informed about changes to local, state, and federal regulations that may affect your investment.