Overview: Is STR Operation Allowed in Oceano?

Yes, short-term rentals (STRs) are legally permitted in Oceano, California. Oceano is an unincorporated community within San Luis Obispo County, and STRs are governed by county-wide regulations rather than city-specific ordinances. The San Luis Obispo County Planning & Building Department oversees land use authorization for STRs, while the Tax Collector handles business licensing and transient occupancy tax collection. This guide details the process for investors operating STRs in this market.

How to Start a Short-Term Rental Business in Oceano

The process for establishing a new STR in Oceano involves two primary steps: obtaining land use authorization and securing a business license with tax registration. Below is a breakdown:

1. Verify Zoning Eligibility: Confirm the property is located in the unincorporated (non-coastal) area of San Luis Obispo County and is a legally permitted residential structure. Oceano is outside the Coastal Zone, so it follows the "Inland Vacation Rental Zoning Clearance" process, not the coastal-specific rules.
2. Contact the Permit Center: Engage with the San Luis Obispo County Planning & Building Department (Permit Center) to initiate the land use authorization. Their website provides a tool to verify zoning eligibility at a specific address.
3. Apply for Land Use Authorization: Submit the required documentation to the Planning & Building Department for review. Upon approval, this authorization is a prerequisite for the business license.
4. Apply for Business License & Tax Registration: After receiving land use authorization, apply for a County Business License with the Tax Collector. Simultaneously, register to collect Transient Occupancy Tax (TOT) and the Tourism Marketing District (TMD) Assessment from guests.
5. Compliance: Ensure ongoing compliance with county regulations, including noise, parking, and occupancy standards.

Required Documents, Permits, Licenses, and Guidelines

Investors must provide specific documentation to both county departments. The required items are standard for unincorporated San Luis Obispo County STRs.

Permits and Licenses

1. Land Use Authorization (Zoning Clearance): Issued by the San Luis Obispo County Planning & Building Department.
2. County Business License: Issued by the San Luis Obispo County Tax Collector upon approval of the zoning clearance.
3. Transient Occupancy Tax (TOT) Registration: Mandatory registration with the Tax Collector to collect the TOT (9% as of 2024) and TMD Assessment (1.5% as of 2024) from guests.
4. Transient Occupancy Tax Certificate: A certificate of authority to collect and remit the taxes, obtained from the Tax Collector after business license approval.

Required Documentation (for Land Use Authorization)

The following documents must be submitted to the Planning & Building Department:

• Grant Deed: Proof of property ownership. If the applicant is not the owner, a completed "Land Use Consent of Property Owner" form is required.
• Site Plan: A hand-drawn or scaled plan of the property showing the structure proposed for the STR and parking locations.
• Floor Plan: A hand-drawn or scaled plan of the STR structure showing all rooms and floors.
• Will Serve Letter: A letter from the community water and/or sewer supplier confirming adequate capacity for the STR use.
• Certification Form: A completed form verifying the local property manager (who must be available 24/7) and confirming notifications to local agencies.
• Notification Letter: A sample letter must be mailed to all property owners within a 200-foot radius of the STR, as well as to the County Sheriff's Office, the local fire agency, and the local sheriff substation.
• Mailing List: A copy of the list used to generate the 200-foot radius notification letters.

Specific Regulations for Short-Term Rentals in San Luis Obispo County (Applicable to Oceano)

The following regulations apply to STRs in unincorporated San Luis Obispo County, including Oceano:

• Definition: A vacation rental is the use of an existing residence as a rental for transient use (less than 30 days). It does not include rentals for 30 days or longer.
• Prohibited Locations: STRs are not allowed in Accessory Dwelling Units (ADUs), Guesthouses, or Agricultural Worker Housing.
• Occupancy Limit: The maximum number of occupants is the number that can be accommodated consistent with on-site parking requirements and shall not exceed two persons per bedroom plus two additional persons.
• On-Site Parking: All parking must be entirely on-site (garage, driveway). On-street parking is prohibited for guests.
• Noise Standards: STRs must comply with County noise standards. Loud or unreasonable noise is defined as noise audible from 50 feet from the property lines.
• Local Contact: A local property manager must be designated and available 24/7 to respond to tenant and neighborhood concerns. Their contact information must be posted inside the STR and provided to all relevant agencies and neighbors.
• Advertising: The availability of the STR cannot be advertised on-site (e.g., no signs).
• Business License Renewal: A business license becomes inactive after 12 months if not renewed. A new zoning clearance is required for inactive licenses.

Contact Information for Local Authority

• San Luis Obispo County Planning & Building Department (Permit Center):

  • Phone: (805) 781-5600
  • Address: 976 Osos Street, Room 200, San Luis Obispo, CA 93408
  • Email: planning@co.slo.ca.us
  • Website: San Luis Obispo County Planning & Building

• San Luis Obispo County Tax Collector:

  • Phone: (805) 781-5831
  • Address: 1055 Monterey Street, Suite D290, San Luis Obispo, CA 93408

Important Considerations for Oceano Investors

• Proposed Moratorium: While not enacted, there was a proposed ordinance in Oceano to prevent new vacation rentals in non-coastal areas to address housing shortages. Investors should monitor local government meetings for any updates to this policy. Currently, no such ban is in effect, and STRs remain permitted under the county regulations outlined above.
• 2024 Tax Rates: As of January 2024, the TOT rate in SLO County is 9%, and the TMD Assessment rate is 1.5%. These are subject to change.

Source Links

The information in this guide is compiled from the following official sources:

1. San Luis Obispo County - Coastal Vacation Rental Clearance
2. San Luis Obispo County - Short-Term Rental Guide (2015)
3. KSBY - Proposed Ordinance for Oceano
4. Freedom & Fortune - SLO County STR Rules Guide